FIB Assistant Director Jon Merrett stated: “FIB was able to provide expert advice to police forces working on numerous cases of alleged Financial Instrument Frauds. In general, these frauds involve the use of worthless documents supporting attempts to raise lines of credit, offers of high yield investment programmes (HYIP), or sell loans at exceptionally attractive rates.”
In one specific example, FIB evidence helped secure the conviction of former fraud investigator Detective Sergeant William McKelvie and a colleague, who have now been jailed for two and one years respectively for their involvement in a $500 million US money laundering scam.
McKelvie, a former member of the UK’s National Criminal Intelligence Service (NCIS), and his former police colleague Robert Miles were drawn into a scam run by English organised criminals.
Both men aided and abetted attempts to raise money using fake bonds. Allegedly from the Ford Motor Company, the bonds were said to have a face value of $500 million US. The fraudsters added credibility to the documents by housing them with a lawyer, and then obtaining Safe Keeping Receipts for them from a major bank. Using this information, the fraudsters tried to use the bonds, backed by their supporting documentation, to obtain a line of credit and sell them below face value.
A third man, Robert Philip Moore Junior, admitted to originally issuing the fake bonds after becoming frustrated by a long-standing dispute with the company over the lease of one of its cars. He was jailed for 30 months by a US court.
FIB analysis of the financial documentation and expertise was key to securing convictions of all three men.
In another recent case, FIB provided a witness statement, resulting in the conviction of three men accused of possessing false financial instruments. In this instance, the criminal activity involved numerous counterfeit cheques with a face value of over $100 million Canadian. Using a forged Letter of Introduction claiming to be from the Chairman of a bank and other false documents, the fraudster attempted to open bank accounts and clear the cheques.
In its statement, the FIB pointed out that no legitimate bank would issue such a non-specific statement without first seeing the cheques and taking steps to confirm their validity. It also highlighted the use of various ‘red flag’ terms in many of the documents, proven indicators that it is false. Many of these are explained in detail in the FIB’s special report: Preventing Financial Instrument Fraud.
On a third occasion, in which the FIB provided witness testimony and a statement, one man was found guilty of false accounting and another of conspiracy to defraud. They were sentenced to 30 months and 42 months in jail respectively.
This case involved a project that proposed to develop and manage a large number of hotels in China. The project was supposedly backed by a number of well-known global organisations. As is common in such ventures, a great deal of forecast account information allegedly provided by leading firms of accountants supported the proposal. The FIB found numerous irregularities in the documentation and noted that the proposed returns of 70% per week were so unrealistic as to be clearly false.
Mr Merrett added, “These cases help to illustrate that financial instrument fraud in all its forms is still an area of serious concern. Generally, these kinds of prosecutions are only successful if the FIB can demystify the complex financial documents to the satisfaction of a jury. To this end, our expert witness service is now being increasingly taken up by police forces and prosecutors seeking a conviction. We are anxious to help them understand the implications included in the mass of documents that invariably accompany such frauds.”