Students are required to conduct research and prepare a five-page scholarly paper (excluding the title and reference pages) following APA format (6th edition). By the conclusion of Module 3, each student will post a proposed topic to the Research Topic discussion board. The topic must be directly related to the field of a criminal investigation. The assignment will be graded for grammar, syntax, spelling, detailed information pertaining to the topic, and APA compliance.
Criminal Investigations on the Latest Fraud-Related Crimes
Corporate Fraud
A business fraud or rather a corporate fraud is that5 which involves illegal and dishonest activities perpetrated by people or companies to provide a financial outcome advantageous to those individuals or establishments. The schemes usually appear under the guise of legitimate business practices. Some of the frauds that fall under business fraud include charity fraud, where people think they are making donations for the right reasons. The second one is internet auction fraud, where payment for goods is done, but the goods are not delivered (Self, Fudge, Sullivan & Harrington, 2016). The third is a re-shipping scheme where a person is recruited to receive items then reships them abroad for selfish interests. There is also non-delivery of merchandise, non-payment of funds, and an overpayment scheme.
Case study 1
An example of a business fraud under investigation was when a hacker gained access to more than one million Capital One customers’ accounts and credit card applications in 2019. Thirty-three-year-old Paige Thompson was accused of breaking into the systems of Capital One and gained access to one hundred and forty thousand Social Security numbers, eighty thousand bank account numbers, one million Canadian Social insurance numbers, and an undisclosed amount of peoples’ credit scores, names., addresses, credit limits, their balances, and other information according to the U.S. Department of Justice and the bank. A criminal complaint explained that Thompson also tried sharing the information with other online users. She was a former worker at Amazon Web Services that Capital One was using as their cloud hosting company.
Capital One, therefore, closed all vulnerabilities as soon as possible. According to sources well connected to the knowledge of the breach investigation, the hacking issue stemmed partly from an open-source web application firewall that was misconfigured, used by Capital One as part of its operations hosted by Amazon Web Services in the cloud. A misconfiguration made it possible for Thompson to trick the firewall into relaying requests to hey backend resources on the platform (Novaes Neto, Madnick, de Paula & Malara Borges, 2020). Thompson was charged with wire fraud and computer fraud and abuse for the intrusion into Capital One data, including other thirty or more entities. There is not much explained about how the investigations went down, but I will try explaining it my way.
The business world has been transformed greatly by technology, and therefore, customers, professionals, and clients can connect globally. That means that the business is vulnerable to risks, and the only way out is having a strong business fraud investigations resource. The penalties for such a fraud vary from state to state. Fraud could either be a felony or a misdemeanor offense (Malik, 2018). A person could be incarcerated, given probation, given a fine or restitution. Restitution is where the criminal is asked to pay money to the victims. A felony conviction can be fined up to ten thousand dollars and probation that lasts less than twelve months. Incarceration can go all the way to ten years or more in federal prison.
Thompson was ordered to stay in federal custody as her trials proceeded. She was then arrested and regarded as a risk of flight and danger to society. She was also considered as a physical danger to herself and the economic and financial threat. Prosecutors suggested that she needed to remain detained as a flight risk because of her mental health issues, lack of stable housing and employment, a history of drug abuse, and a lack of local family connections. In the most recent hearings, Thompson denied to have shared or sold the data, and Capital One said that it was not likely that the information was used for dissemination or fraud. She is currently being held at the SeaTac Federal Detention Center in the male swing since she is transgender.
Case study 2
An example of a fraud-related crime that was put under criminal investigations was a case of a man who attempted to orchestrate a fifty-one million dollars’ fraud scheme. The man was a forty-seven-year-old from Houston whose name is Sarpy. He repeatedly tried stealing multimillion-dollar loans with the use of documents that were falsified. The special agent that was in charge of the FBI by the name Perrye K. Turner was afraid that Sarpy at some point would successfully get funded with a multimillion-dollar payday all based on fraud. However, his fruits of perseverance never seemed to bear any fruits. Turner and the other agents were very determined to see that the fraud didn’t happen and to stop Sarpy in his tracks.
With his consent, Sarpy would submit fraudulent documents in an attempt to get multimillion-dollar loans from several lending institutions (Local man who attempted to orchestrate fifty-one-million-dollar fraud scheme sent to prison, 2020). At that time, Sarpy knew how to avoid being caught to incorporate different companies to perpetuate the fraud that included Legacy International Production & Exploration Corporation and Sarpy Investment Corporation. Some of these false documents he used to submit were financial audit opinions for Sarpy Investment Corporation. These documents purported to be from auditing firms like BDO, KPMG, and PricewaterhouseCoopers.
After the investigation, it was revealed that Sarpy was not a client of any of the companies, and there were forged ad fictions financials that he kept submitting in support of all the loans. There were four different occasions in 2018 that Sarpy kept submitting false audit reports, which included some forged signatures and financials. These were submitted to four different institutions and all the four times kept frustrating him since he did not secure the fifty-one million dollars he was hoping to get in loans. He was then arrested and released on bond but violated his conditions or release after cutting off the GPS monitor.
He then fled to the Northern District of Texas, where the law enforcement later found him and took him into custody. He remains pending transfer to the United States Bureau of Prisons facility to be determined soon. Recently, the U.S. District Judge Vanessa D. Gilmore ordered a jail sentence of one hundred and thirty-five months, which would be immediately followed by three years of supervised release. He was also asked for a fine of five thousand dollars. According to the court ruling, Sarpy was found to have attempted to commit fraud while out on bond and tried to obstruct justice by cutting off his GPS ankle monitor before the sentence. In handing down the sentence, it was noted by Judge Gilmore the criminal history of committing fraud and the sophisticated nature of such an offense.
This case involves wire fraud, which is a type of fraud involving the use of the internet or other forms of telecommunication. Such crimes can be perpetrated using all forms of electronic media like emails, social media, telephone, fax machines, or text messaging. Generally, wire fraud is a criminal act committed with the help of electronic communication, and it is covered in the U.S. Code, Title 18. Title 18 of the United States Code refers to the criminal code of the United States’ federal government, and it deals with the criminal procedure and federal crimes.
Wire fraud and mail fraud are both federal crimes, with the Justice Department claiming jurisdiction either on the basis that the fraudulent activity crossed the lines of the state effectively with the use of interstate wire communications, or that the services of the U.S. postal service are in use during the crime perpetration. A person who commits wire fraud can also violate local laws or state laws, and in some, it could be both local and state laws. They are therefore subject to arrest and prosecution in state criminal courts. Penalties of wire fraud are up to thirty years in prison and a fine of up to one million dollars. There is a possibility of the fraudster being prosecuted and convicted regardless of whether the fraud scheme was successful or not.
In conclusion, the two case studies are examples of business frauds classified into computer and internet fraud and wire fraud or loan fraud. If a business fraud is suspected, it is important to start a business fraud investigation immediately. To avoid business fraud, a person needs to purchase anything from dealers and establishments that are reputable. There is also a need to obtain a physical address and ensure that the email address is active and purchases directly from dealers that hold copyright, trademark, or patent. Not all types of fraud are criminal; therefore, a suspected fraudster should seek a criminal defense attorney to avoid being charged with a wide number of crimes.
References
Self, S., Fudge, T., Sullivan, G., & Harrington, T. (2016). BUSINESS ACQUISITION: A CASE STUDY WITH VARIOUS ACCOUNTING FRAUDS. International Journal of Business, Accounting, & Finance, 10(2).
Malik, A. A. M. A. A. (2018). Bank Frauds Using Digital Devices and the Role of Business Ethics. IJECI, 2(4), 7-7.
Novaes Neto, N., Madnick, S., de Paula, M. G., & Malara Borges, N. (2020). A Case Study of the Capital One Data Breach (Revised).
A local man who attempted to orchestrate a $51 million fraud scheme was sent to prison. (2020, November 30). U.S. Department of Justice. https://www.justice.gov/usao-sdtx/pr/local- man-who-attempted-orchestrate-51-million-fraud-scheme-sent-prison
