Fraudsters fake diversity hires to win contracts and more

Fraudsters fake diversity hires to win contracts

The Manhattan district attorney indicted eight people and six construction companies in May for fraud and corruption after they lied about hiring minority- and women-owned businesses (MWBE) to win lucrative government contracts.

According to prosecutors, Lawrence Wecker, owner of drywall and carpentry company JM3 Construction, project manager Michael Speier and other co-conspirators falsified business records to obtain government-subsidized affordable housing contracts by listing minority- and women-owned contractors in their records. In reality, they used non-MWBE contractors and put actual MWBE companies at a disadvantage.

Wecker and his company also allegedly stole money from subcontractors and fixed bids for construction projects so that they’d be awarded projects with inflated costs, scamming the New York State Insurance Fund out of more than $2 million. (See “Construction fraud scheme faked ties to minority, women-owned businesses: Manhattan DA,” by Aaron Katersky and Teddy Grant, ABC News, May 2, 2023.)

Drug cartel diversifies with timeshare scam

The U.S. Treasury Department sanctioned Jalisco drug cartel members and 19 Mexican companies in April for allegedly scamming elderly U.S. citizens trying to sell their timeshares in Puerto Vallarta, Mexico. The scammers reportedly emailed fake contracts to sellers and claimed they had buyers but needed the sellers to pay taxes or other fees first. The fraudsters then vanished once they received the money.

The FBI reported in 2022 that millions of dollars stolen from victims of timeshare fraud were a revenue stream supporting the notorious gang’s criminal enterprise. The Jalisco cartel is considered one of the most dangerous transnational criminal organizations in the world, according to the U.S. Department of Justice. (See “U.S. accuses notorious Mexican cartel of targeting Americans in timeshare fraud,” CBS News, April 28, 2023.)

U.K. fights fraud with new investigative team

The U.K. government has launched a newly formed 400-person anti-fraud investigative team as it seeks to tackle what has become an increasingly problematic and costly crime for the country.

As part of this effort, the government is banning cold calls that promote financial products, including cryptocurrencies. It will also work with Britain’s communications regulator to prevent callers from disguising their identity through “number spoofing” and criminals from using mass texting services.

“It is vital we adopt a new approach to this threat,” said U.K. Home Secretary Suella Braverman. “The fraud strategy outlines how we will use all levers available to us — through government, law enforcement, industry and international partners — to track down these criminals, intercept their scams and bring them to justice.”

The new anti-fraud measures come as fraud has skyrocketed in Britain, affecting one in 15 people at a cost of $8.72 billion a year, according to Reuters. Seventy percent of the fraud in the U.K. either starts overseas or has links from abroad, says the government, which plans to host the country’s first international fraud summit to encourage greater global cooperation.

(See “UK government sets out anti-fraud strategy to tackle scammers,” by Muvija M, Reuters, May 2, 2023 and “New blueprint to protect public from scammers,” gov.uk, May 3, 2023.)