From the very moment that people started using money, perhaps, some have uncovered ways of stealing it. And so, as sure as there will still be money after 25 years — or in some other form — corporate fraudsters will still be plying their trade. But innovative technologies could produce an environment where, as one retired law-enforcement official warns, “There will be no boundaries in relation to what fraud can be perpetrated.”
Crime investigators state that the crimes per se do not completely change. From our common frauds and Ponzi schemes to intricate security breaches, tax avoidance and money laundering, there are still various ways a criminal can make a dirty buck. When CNBC began in 1989, junk bond king Michael Milken was being accused of securities fraud charges in a sensational investigation. After 25 years, a new Wall Street insider-trading investigation — this time centering on hedge funds — has victimized 79 people, perhaps, more.
Imagine a world where an inside-trader can obtain his information not from an insider who works in a firm but from a hacker working outside and stealing data from the organization’s data systems in the cloud. He shares the data to others through a bunch of intricately encrypted, untraceable instant messages. The unlawful act is done in nanoseconds. The money is disbursed through virtual currency. And the criminals thrive happily plying their trade and stealing from other victims any new day.
And imagine a Ponzi schemer — a future-generation Bernie Madoff – except that he is not human at all but a poser for a rogue nation with the ability to rob you, spend your money and stash it away in a split second.
Enter the world of white-collar crime, 2039.
“Simply use your imagination as to the form of fraud you wish to perpetrate,” said Thomas G.A. Brown, who assisted in launching cyber investigations in the U.S. Attorney’s Complex Frauds Unit in Manhattan.
Brown, presently a senior managing director at FTI Consulting, said the future white-collar criminal will be quicker and more highly invisible than before — allowing the possibility for “nearly the perfect crime.”
In truth, cybercriminals can already perform some of those heists today.
“Crime in cyberspace is not merely the coming trend of the future; it is here with us now,” said E. Danya Perry, also a former senior deputy in the Manhattan U.S. Attorney’s office, now practicing privately. “I believe we will be seeing more of how this chameleon will evolve into a raging dragon.”
Cyberspace crimes already cost the U.S. economy about $120 billion yearly and the entire globe about $1 trillion, as revealed by a study published in 2013 by McAfee and the Center for Strategic and International Studies. And all that in a crime onslaught that is comparatively only new.
Prosecutors obtained a view of what the future will look like from last year’s taking down of Silk Road — a clandestine website which officials authorities claimed was “the most advanced and widespread illegal marketplace online.”
Although Silk Road specialized on the lucrative prohibited drug trafficking, Brown of FTI Consulting reported that agents uncovered methods that could “skyrocket financial crime’s spread.”
The primary technique among several promising tools is the new virtual currency called bitcoin, which is already changing the face of the global payment structure.
“Bitcoin is so hard to manage,” Brown said.
In the Silk Road case, which Brown built with others, the federal government has captured an amount of over $33 million bitcoin money from the computers of the site’s accused founder, Ross William Ulbricht. However, that amount is a small part the $1.2 billion in sales the system allegedly generated within less than three years of operation. And detecting where the rest of the money is located is almost impossible.
“Imagine every bitcoin as being a gold bar,” Brown said. No one knows where that gold bar originated, and anyone can readily sell it for cash. “Anyone can steal it and run away with it.”
Even if agents can locate bitcoin in a certain account, that clue will not mean the owner can be traced. “No one is required to register a bitcoin account in a genuine name,” Brown said.
There exist other virtual currencies aside from Bitcoin. Back in 2013 as well, a federal grand jury in New York charged Liberty Reserve for trafficking in the currency referred to as LR. Officials captured five Internet domains and charged 35 currency-trading websites in what was billed by Manhattan U.S. Attorney Preet Bharara as one of the biggest global money-laundering cases in legal history.
The implications of the virtual money revolution on white-collar crime are vast. At the bottom, Brown said, the virtual cash could make tax avoidance become easier than before.
“I can enter into any kind of deal I want to derive income without paying taxes since no one is aware of what I’m doing,” Brown said.
“The financial rewards are going to be very compelling for any person to want to trespass the law ,” Perry said.
Exactly how regulators and law enforcers will clamp down on those tempting baits — and what government agencies will head the move — remains unresolved.
In March, the Internal Revenue Service released its first advisory on virtual currencies such as LR and bitcoin.
“Virtual money is considered as property for U.S. federal tax purposes,” the IRS stated in a March 25 announcement. “A disbursement with virtual cash is covered by information reporting within the same limitations imposed upon any other disbursement made in property,” the announcement stated.
Yet, in our world where financial crimes are perpetrated by faceless people, where do we point an accusing finger?
“Locating people in an environment of uncertain identities is a difficult task,” said Perry. “When you have a place where you can make deals incognito, this sort of problem will keep going.”
In the Silk Road investigation, officials say numerous drug dealers and over 100,000 of their customers covered their identities by utilizing what are called tumblers, which jumbled their personal identity information to produce anonymous transactions.
Cybercriminals now also often use a technology called Tor — formerly the acronym for The Onion Router, for its multi-layered complexity — to hide their online tracks.
Tor software, which is free online, lets the user to hide his PC’s IP address — its virtual fingerprint — as well as every server’s IP address to which the PC connects.
“Imagine a gigantic pinball machine,” Brown said, where your PC is the silver ball bouncing around. Each time the ball touches a bumper, its identity — or IP address — changes and so with the bumper, making it “functionally impossible” to trace the traffic.
Aside from making illegal deals and underground websites invisible, Tor provides criminals —whether the financial kind or otherwise — a means to interact and pass on data more easily than before.
“Traditionally, you have to identify ‘Harry from Bensonhurst’ or ‘Johnny from the block’ to round up a robbery group,” Brown said.
Today, with their virtual masks covering their faces using all the new technology, white-collar criminals, hackers and identity robbers can assemble and exchange information without fear in so-called carding venues. For such bandits, chat rooms are not merely for socializing. They are sources of stolen identities, software code and even cash beyond the scope of authorities.
“A savvy crook utilizing effective functional security is almost impossible to locate,” said Brown.
Falling prey to the schemes of tomorrow’s crook, he said, are firms that are already forced to share more and more of their valuable information in the web and in the cloud so their workers and clients can readily get that information — a signal for hackers to prowl for victims.
“Many firms concentrate on merely the collecting and using of the information instead of securing that information,” Brown clarified.
The future white-collar cybercriminal may not be a single person. It could actually be a whole country. Brown is apprehensive of the coming “nation-state” in financial crime. “Much of this is not talked about extensively, if at all, due to its confidential nature,” he said.
The Wall Street Journal’s editorial staff (WSJ) disparages the Dodd-Frank Act and the leaders of the financial regulatory bureaus. I agree with many of those criticisms; but I distance myself from them on their horrified stance against the Act, saying that: “The regulation micromanages bank decisions down to the type and nature of loan.” The Dodd-Frank Act prohibits a “type” of loan according to the innately deceptive “nature of [the] loan.” The Act disallows liar’s loans. The WSJ believes this ban so atrocious, so evidently an infringement of the divine right of banks, that it calls it “micromanage[ment]” and presumes that the word establishes the irrationality of prohibiting liar’s loans.
As I have been discussing for more than twenty years, no truthful lender would make liar’s loans. Here is George Akerlof and Paul Romer’s clarification of the analytics in their well-known 1993 article in which they specifically alluded to my explanation. Notice the creepy manner in which they explain the explicit underwriting failures that characterized liar’s loans ten years later.
“[An officer] who is betting that his frugality might in reality create a profit would never operate the way many thrifts did, with total disregard for even the most essential tenets of lending: keeping sensible records about loans, safeguarding against external fraud and abuse, counter-checking data on loan documentations, even striving to have applicants fill out loan forms for applications. 5
5. Black (1993b) vigorously makes this point” (1993: 4 & n. 5).
When a lender fails to observe “even the most elementary guidelines of lending” it will incur grave losses. The controlling officers, however, will be made rich by making sloppy loans. Indeed, Akerlof and Romer emphasized that accounting control fraud is a “sure thing” (1993: 5).
Here are the five most notable warnings of the mortgage industry’s anti-scam unit (MARI) that the Mortgage Bankers Association sent to practically all significant mortgage lenders as early as the start of 2006:
Even Ben Bernanke, the Nation’s chief anti-regulator, used the Fed’s distinctive statutory power under the Home Ownership and Equity Protection Act (HOEPA) of 1994 to proscribe liar’s loans in mid-2008. Bernanke deferred the effective date of the rule by 15 months because one would not want to give a deceitful lender a hard time.
Alan Greenspan disregarded Fed Member Gramlich’s popular warnings about non-prime loans and also rejected his plea that Greenspan send the Fed’s analysts into the bank holding company affiliates to uncover the real story. The Fed’s supervisors were subjugated to the menial role of asking the systemically dangerous institutions (SDIs) what kind of loans they were making (a procedure that would definitely lead to significant understatement by the SDIs).
“Sabeth Siddique, [queried] large banks in 2005 …how many of which types of loans they were originating. Siddique discovered the data he obtained “very alarming,” [N]ontraditional loans comprised 59 percent of originations at Countrywide, 58 percent at Wells Fargo, 51 at National City, 31% at Washington Mutual, 28.3% at Bank of America, and 26.5% at CitiFinancial.
There is one more painful than the ability to get a loan it is having bad credits. As a consequence the ability to get a good job and ultimately, the ability to rent a decent apartment is affected.
Here are ways how, so don’t give up just yet.
Month to Month- this style permits the landlord and the tenant much more leniency, which is why many apartment owners have gone to this month to month style. As compared to those who signed for a year lease month to month as landlords are not so concerned with poor credits. And to tenants with bad credit, they find apartments to rent with month to month leases great.
Clear Debts- Pay off debts that might be a hindrance, work on clearing your debts before apartment hunting. Even up to seven years some things stay on a credit report. But even so it is always better and looks better to have a past due debt that has been paid than to have a bad debt that is not paid or there has been no effort to pay it. Most landlords will look at paid off late debts as an attempt to be responsible. And may be you key to get your new apartment.
References- References are very significant and can be sufficient to convince a landlord to make you rent his apartment even with bad credit that is why landlords always ask for them. The landlord might be willing to move forward with a lease if someone with a good reputation is willing to give a good reference to the landlord.
Avoid Real Estate Agents- it may be hard for a landlord to let a person with bad credits rent the apartment but there is a good chance that he still will but a real estate agent rarely will though. Shun eyeing at apartments a real estate agent is managing. Real estate agents strictly verify backgrounds and credit reports. There is slim hope of finding a good apartment through a real estate agent if you have bad credits.
Bad credit does not prevent people from renting an apartment and if you want, the greatest chance of a decent apartment on bad credit is a month to month lease. This makes both the landlord and tenant feel more comfortable in the situation plus it is an easier payment terms.
A structured settlement is defined as an agreement by which an insurance company makes payments to an injured person as the result of a bodily injury claim settlement. The money then will be awarded to their surviving family if in the case that the injured individual is deceased.
For about 30 years, structured settlements have been around aiding injured person. For the insurance companies, rather than paying all at once, it is easier to pay over a period of time that is why structured settlements were established. Payouts must follow a certain structure that is why it was named structured settlements.
A financial institution is the only authorized body who can distribute structured settlements. In many cases, these institutions will specialize in structured settlements.
For a certain period of time or even over a lifetime the payments are made in installments. Some settlements accommodate immediate payment to comprehend a specific damage that occurred.
The defendant usually buys an annuity for you in the amount of the settlement. There are many different ways you can set the money such as when you are sick and entail medical care; you can save funds for your medical treatment.
Over a certain amount of time, a structured settlement annuity offers tax-free payments. In some cases, the payments can be made over the lifetime of the individual. In the event that the payee dies, then the payments can be made to their beneficiary.
The settlement cannot be changed once established. Hence, you need to be certain that it is arranged the way you want it. It will be helpful to have an attorney in determining the terms of the structured settlement.
Structured settlements are sometimes bought by many companies so that you can receive a lump sum. There are investors that are always seeking for people who want to cash out their structured settlement. If you really want to cash it out you may sell it by parts, or sell just a part of it.
You may exchange it with some companies who are willing to trade it with you if you think that selling your settlement is not a good idea.
Some states do not allow structured settlements so better think about it many time before deciding. Make some research about its pros and cons and weigh if they are right for you. Who knows it might be a good way for you to get the money that is meant for you.
No, it doesn’t factor into the credit score. Paying your utility bills such as electric company, the gas company, and your television and phone service, it also includes cellular phone providers, on time would not reflect and it doesn’t make it to your credit score.
Your utility companies has nothing to gain if they report you timely payments that is why most utility companies don’t go to the effort and expense of reporting your timely payments to the credit bureaus.
But the thing is some utilities will make a report if you are late on your payments. Therefore, it will likely go on your credit report if the account goes to a collections agency. This will not happen unless you make an arrangement for payment with the
But you would rather not do so because this doesn’t mean that you have an excuse of not paying your bills on time. The utilities are charging interest on late accounts, and therefore they can send the account to a collection agency.