Following a recent online attack that resulted in the diversion of tax refunds and the theft of thousands of taxpayers' personal data, the I.R.S. is making moves to implement new safeguards. Preventing fraud and identity theft has long been a key issue for the Internal Revenue Service. The government agency announced that it will be collaborating with state officials and tax preparation firms to implement stricter authentication processes and study fraud patterns.
The holiday season is nearing meaning the busiest time of the year for retail businesses is arriving. This is the time of the year in which spending increases but also the times of the year when businesses are more susceptible to transactional fraud in the form of counterfeit currency, counterfeit credit cards and identity theft. It is important that your business is prepared to handle the influx of transactions that will come at this time of year and the possible fraudulent vulnerabilities that business are susceptible to during this season.
Simply put, multi-layered fraud prevention means that you must seek to understand the vulnerabilities or degree of fraud exposure of your operation. It also means that you should try to target appropriate fraud prevention methods to each vulnerability according to the level of potential loss, or the degree to which potential compliance violations might expose the organizations to fines and penalties.
Most loss prevention and asset management personnel make the mistake of thinking that shrinkage only comes from outside shoplifters. However, organized retail theft is growing, resulting in estimated losses of anywhere from $15 billion to $30 billion per year for supermarkets, chain drug stores, independent pharmacies, mass merchandisers, convenience stores, and other retailers. In fact, around 90 percent of retailers have been victims of these theft rings! This isn't the work of average, petty shoplifters; on the contrary, this is the work of professional theft rings that travel across state lines to pilfer large amounts of merchandise and resell it. Even worse, these theft rings utilize employees on the inside to help steal goods right out from your nose.
To prevent organized retail theft, there are a few things you can do that all require arming yourself with knowledge - about your employees, your customers, and theft rings themselves.
One of the biggest concerns of any financial institution – that is, any institution that routes payments between individuals / organizations, or which accepts payments over time – is money laundering. Profits obtained from some nefarious activity need to be 'washed' through the system to remove any trace of their origin; and individuals have found no shortage of ways to wash them – creating shell companies, giving out loans to themselves, buying and selling casino chips, or simply paying for everything in cash. Indeed, as our previous article about the depth and breadth of the practice showed, laundering comes in a variety of creative shapes and sizes, with some more apparent than others.
The last several weeks have seen a number of noteworthy arrests for money laundering. A fugitive American, who pled guilty to money laundering charges eight years ago but disappeared while out on bail, was finally returned to the U.S. after being apprehended in Mexico last year. And a Jamaican national was sentenced to 30 years in prison in the U.S. for money laundering, and ordered to pay $55 million in restitution to his victims – after he finishes out his 6 ½ year term for a prior conviction in Jamaica.