Module 9: Fraud including VAT Carousel Fraud (MTIC) Flashcards
Explain fraud in private car sales (trough online advertisement) with false draft
[scheme] + suspect will frequently change personal details. They are caught based on their advertisement: copy and pasted (only the credentials have changed)
Explain Bank guarantee scam
Used to scam high net worth individuals. By unwitting acquaintance invited to join investment in bank guarantee notes. Notes can be traded. On each trade, value increases 1% and you can trade 50 times a day. Red flag: extremely high returns: 20-100% promised. Sign NDA or instantly removed. Term = year (and a day). Contract with “expert” phrases to overwhelm the victim. Ask to transfer money to bank account to release the note. Legit website with login for victim, their fake bank accounts; gets updated. Impersonated bank managers
Explain conveyancing fraud (= transfer of house by solicitor or lawyer on behalf of client) with BEC.
Criminal target solicitor’s email service/account. Looks for emails associated with purchase of house. Create similar email account and introduce a problem/pressure and time limit. Provide bank account details and ask for deposit to be paid immediately
Explain CEO/Invoice redirection fraud + BEC.
Intercept/impersonate email from CEO of company and instruct junior employee to make payment to specific account. Called invoice redirection fraud = call/email from large creditor in account department. Usually on Friday. Tell that supplier changed bank accounts, provide new details. End of the month, payment to criminal account
Explain how criminals can obtain information about a credit card
Hotels can check balance on creditcard account, incl limit. Insider in hotel can test stack of cards. This does not settle, but only tests. It won’t appear on the bank statement. CCTV and bank account card records can lead to insider
Where does MTIC stand for?
Missing Trader Intra-Community, also known as Missing Trader Fraud or VAT carousel fraud
Give an example of a simple VAT fraud
Company gets VAT registration number in another EU member state. Purchases good free from VAT and sells the good VAT-inclusive in its own country. Then goes missing without paying the VAT
What are characteristics of VAT carousel fraud?
- Can all be performed through documents.
- Generally low bulk, high value commodities.
- No reality to trading patterns.
- Unrealistic prices and sales
- Fake documentation.
- Transactions are all internal in ring of criminal companies
- Profit nets the amount of VAT reclaimed –> shows that no activity occurred
How does VAT Carousel fraud work and explain the participants
[scheme] +
1. Missing trader (aka the missed): imports the goods VAT free, sells on VAT included. Will never pay the VAT to the government. Goes missing as soon as the revenue investigation starts and drains the company. Will have a front man
2. Buffer traders: trading companies added to provide distance between the broker and the misser. Can always pretend to not be aware of missing trader not paying VAT
3. Broker: key actor in the chain, at the end of the cycle exporting the good and reclaiming VAT. Can provide services to multiple carousel schemes. Can always pretend to not be aware of missing trader not paying VAT
4. 3rd party payers: pay on behalf of the misser. This is to avoid missing traders funds to be seized.
5. Intra-trader: Buys in one country and sells quickly/immediately in another country
Notes for investigators
- Follow the money
- Company has huge turnovers
- Payment come from third parties offshore
- Operators have little knowledge of business
- Invoices are paid immediately
- Large cash withdrawals
- Only trade between traders, no retailers
- Unexplainable price drop in the chain
- Net profit equals VAT
