Fraud in the News

FIFA red carded in federal indictment

According to The New York Times article, FIFA Inquiry Yields Indictments; U.S. Officials Vow to Pursue More, by Matt Apuzzo, Stephanie Clifford and Will K. Rashbaum on May 27, U.S. law enforcement officials declared in forceful terms that their broad investigation of FIFA had only begun and pledged to rid the international soccer organization of systemic corruption.

According to the article, the Justice Department, FBI and IRS said that top officials treated FIFA business decisions as chits to be traded for personal wealth. The article states that Attorney General Loretta E. Lynch said that one soccer official took in more than $10 million in bribes.

Swiss authorities, according to the article, working in conjunction with U.S. officials, conducted an extraordinary early-morning operation in Zurich on May 27 to arrest several top soccer officials and extradite them to the U.S. on federal corruption charges.

The charges, backed by an FBI investigation, allege widespread corruption in FIFA over the past two decades, involving bids for World Cups as well as marketing and broadcast deals.

According to the ESPN FC article, Sepp Blatter resigns as FIFA president: What you need to know, by ESPN Staff, three days after winning a fifth term as FIFA president, Sepp Blatter announced his resignation on June 2 in a hastily arranged news conference in Zurich. U.S. prosecutors and the FBI are now investigating Blatter for possible involvement in the widening criminal scandal.

New sentencing guidelines for white-collar criminals

On April 9, a federal judicial panel adopted new guidelines for sentencing white-collar criminals in fraud cases, according to a Reuters article, U.S. judicial panel changes fraud sentencing guidelines, by Jonathan Stempel. The panel changed the guidelines to try to make punishments more fairly reflect the harm suffered by victims and the intent of offenders to cause harm.

According to the article, the changes follow years of criticism from defense lawyers and some judges who say federal sentencing guidelines have led to overly severe punishments — potentially reaching life in prison — because they emphasize financial losses.

The article states that the changes approved by the U.S. Sentencing Commission will take effect on Nov. 1 unless Congress objects. Judges need not follow the guidelines, but they must consider them.

Hackers target American credit cards

According to the May 27 Quartz article, Americans are, by far, hackers' favorite credit-card fraud targets, by Shelly Banjo, nearly half of all the credit card fraud around the world occurs in the U.S., even though America accounts for only about a quarter of the global card volume, according to a new report from Barclays.

According to the article, the increasing instances of credit-card fraud are mostly because the U.S. still relies on old, faulty technology that the rest of the world moved on from years ago. (Though credit card companies are slowly issuing new-technology cards with embedded electronic chips.)

In the U.S., credit cards still transmit financial information through a magnetic stripe that's easy to replicate if stolen. Hackers also can remotely install malicious software onto checkout terminals at retail stores to capture credit-card numbers. The data gets transmitted to the cybercriminals, who then sell the information to the highest bidder.

To learn more about credit card security, visit the ACFE Insights blog post, For Credit Card Security, U.S. Banks Need to Rethink PINs, by James D. Ratley, CFE, ACFE President and CEO.