Yet another credit-card fraud has rocked the banks and other financial institutions related to them.
U.S department of justice has charged 18 men that are involved in this white collar crime.
The worst part is that, out of 18 there are 5 men who belong to India. This has certainly given a bad name to our country.
Not long back ago, in a high profile case, Rajat Gupta of Indian origin was convicted for fraud and conspiracy. Yet again another credit-card fraud has come to light with some India connection.
Let us see, apart from Indian connection how this particular fraud is different from the rest.
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Largest Credit-Card Fraud in U.S History
This is not the first credit-card fraud in the U.S history, then why this particular fraud is different.
Well! The answer is very simple. This is the largest credit-card fraud in U.S history.
The amount of money involved in this fraud is over $200 million. Moreover, the footprint of this white collar crime is global.
According to U.S department of justice, over 18 men of different nationalities were involved.
They wired money to countries like Pakistan, India, Japan, China, Canada, UAE, Romania etc. Thus, you can understand, this is indeed a global white collar crime.
The amount of money and men involved in this is first of its kind.
How this Fraud was Committed?
Now let us see how these men were successful in duping financial firms and other businesses. What was their modus operandi?
Firstly, they created thousands of fake identities to dupe businesses. These men fabricated identities to obtain credit cards.
They also doctored credit reports to pump-up the spending and borrowing power.
Based upon their fraudulently obtained credit history they would borrow or spend money as much as they can without repaying debts.
That’s how they duped many businesses and financial firms.
At least, $200 million in loss is confirmed by investigating agencies.
You could imagine how these men were able to create thousands of fake identities.
Where was the Loophole?
Again the question that comes to our mind is how they were successful to dupe large financial institutions and businesses.
Acting special agent in charge David Velazquez said
“The criminal activity highlights an extensive, sophisticated, organized scheme, executed against US financial institutions, which, in turn, affects every US citizen,”
He further added
“This elaborate network utilized thousands of false identities, fraudulent bank accounts, fake companies and collusive merchants to defraud financial institutions of hundreds of millions of dollars in order to facilitate extravagant lifestyles they could otherwise not afford.”
You could get an idea how these 18 men were smart enough and well trained to execute this fraud. Many of them even had criminal background in white collar crimes.
Who all are Involved in this Fraud?
As I said earlier there are 18 men involved with different nationalities. 5 of them are Indians.
Among those who are charged are
- Babar Quereshi (59),
- Ijaz Butt (53),
- Raghbir Singh (57),
- Mohammad Khan (48),
- Sat Verma (60),
- Vijay Verma (45),
- Tarsem Lal (74) and
- Vinod Dadlani (49)
FBI officials arrested 13 men from different locations in New Jersey, New York, Connecticut etc. Each one of them would face 30 years of prison and one million dollar fine if convicted.
We are here more concerned about those 5 Indian men. Because of their involvement the image of our country would be badly damaged.
Who is the Ultimate Victim?
Well! The ultimate victim is the trust. Trust is always the first causality whenever a large fraud is exposed.
The trust of financial firms and banks on the people at large would be affected. People who want credit cards for good purpose would face further difficulties and other unnecessary scrutiny by the bank.
Even the banks are also affected by these frauds. They have to incur huge financial losses. In this case the amount was about $250 million.
So both parties financial institutions who lends money and the people who needs that money are the ultimate victim of this fraud.
What is the lesson Drawn from this?
There could be serious consequence of this global fraud. There could be four entities that will be bear direct fallout of this mega scam. They are banks and financial institutions itself, people, the law enforcement agencies and criminal justice system.
But what all of them can learn from this white collar crime?
1. Banks and Financial Institutions
Banks have to be careful while they issue credit cards to their customers. If someone gives application for so many accounts then there is something fishy. Like in this case they created more than 7,000 false identities and obtained thousands of credit cards.
With more full proof system such issuing of credit cards could be scrutinized.
2. People or Layman
People who use credit cards from different banks must be careful that no one else is using their name or fake identity to obtain credit cards.
In other words, they should be more vigilant.
3. Law Enforcement Agencies
Law enforcement agencies and crime branch could also learn how these white collar criminals are successful in deceiving banks and financial institutions.
4. Criminal Justice System
Criminal justice system should ensure that these criminals do not get bail and getaway but sentenced to full extent according to law. All the loopholes must be plugged.