Good morning, ladies and gentlemen. I am very pleased and honoured to open this conference on International Fraud Prevention, and I thank the organisers for inviting me to be here today. You are all most welcome, and I know that your valuable contributions will help to inform and shape the output of this conference.
I welcome colleagues from other jurisdictions, including Dermot Shea, NYPD Chief of Detectives. Chief Shea oversees the biggest detective bureau in the United States and no doubt has considerable experiences to share of combatting fraud in its many forms. And yes, fraud does come in many forms, including money laundering, corruption and cyber-enabled scams that can, and do, impact on individuals, business and the State.
Tackling and preventing fraud is of crucial importance to the State and to the wider international community. I strongly support the emphasis that this conference places on the need for collaboration and cooperation between agencies and organisations as a means of combatting fraud.
If Ireland is to maintain its open economy and status as a favourable destination for Foreign Direct Investment, we must all of us, in Government and in wider society, work together to combat fraud and economic crime generally. We must work together to provide reassurance for both the business community and the wider community of citizens, so that everyone can feel secure conducting their business and living their lives in Ireland. But the impact of this type of crime goes deeper.
The truth is, we all pay the price for fraud. Fraudulent acts and practices are a drain on the exchequer, drive up costs for businesses and, ultimately, for all those who live and work in this country.
As part of the Government’s package of measures to combat White Collar Crime, a group has been established to review Ireland’s Anti-Fraud and Anti-Corruption Structures, with a focus on collaboration and cooperation between key State Departments and bodies. The group is chaired by the highly respected former Director of Public Prosecutions and anti-corruption expert James Hamilton. This working group includes representatives from all of the key State agencies and bodies involved in combating fraud and corruption in Ireland, such as the Garda National Economic Crime Bureau, the Office of the Director for Corporate Enforcement and the Central Bank among other important agencies and bodies. The group is working to develop and enhance the Government’s response to Fraud and Corruption across the legislative, policy and regulatory fields. The group will report later this year, and I look forward to receiving its recommendations.
Other key Government initiatives being pursued through my Department include legislative and policy changes to tackle and prevent Money Laundering and Corruption, both of which are crimes that often have an international dimension. Ireland recently undertook a complete overhaul of its anti-corruption legislation. The Criminal Justice (Corruption Offences) Act 2018 repealed anti-corruption laws dating back to 1889, replacing them with a modern, accessible statute. This new Act reflects the global nature of corruption and has a particular focus on both domestic and foreign public officials, acting in the course of their duties.
One of the most significant provisions of the Act is the offence relating to bodies corporate. It places strict criminal liability on a body corporate where a corruption offence is committed by one of their employees, agents or other officers. This is aimed at deterrence as much as it is at punishment. It is a sign of Ireland’s commitment to ensuring that companies act responsibly and take steps to prevent corruption in their organisations.
In the broader area of corruption policy and legislation, Ireland has recently been the subject of a United Nations peer review process, with regard to the implementation of the UN Convention Against Corruption. Ireland was commended on a number of measures that have been put in place. Good practices identified include the provisions in the Protected Disclosures legislation, the setting up of a Tender Advisory Service, the freedom of information disclosure log and the Anti-Money-Laundering Steering Committee. The review also highlighted the Criminal Assets Bureau as a good example of how to deal with asset recovery.
But we can always do better, and my Department, together with other relevant Departments and Agencies, has already begun progressing the recommendations of the UN review and we will continue to work to strengthen Ireland’s anti-corruption and prevention framework.
Also important in the fight against fraud is Anti-Money Laundering policy and legislation. Ireland’s legislative regime for tackling money laundering was strengthened last year by our transposition of the 4th EU Anti-Money Laundering Directive. Central to the Directive is the concept of risk management, with businesses expected to analyse their risk of exposure to possible money laundering and demonstrate that they have measures in place to mitigate those risks. This takes time and effort, both for businesses and for the competent authorities who support and inspect their efforts. We will continue to ensure that resources are in place to make this happen.
Work is also well under way in my Department to transpose the 5th EU Anti-Money Laundering Directive by the deadline early next year. This will further enhance a robust system of anti-money laundering checks and balances, particularly in the area of new technologies. My Department and the whole of Government are committed to further strengthening our systems, and the bodies that interact with them, to prevent the abuse of the financial system.
I welcome the particular emphasis of today’s conference, focussing, as it does, on preventing fraud through collaboration and technology.
As with so many forms of crime, developments in modern technology that have brought so many benefits to our society have also created new opportunities for those who seek to engage in fraud. In this regard, it is worth noting the important work of the Garda National Cybercrime Bureau in tackling such cyber-enabled crimes in collaboration with other Garda units such as the Garda National Economic Crime Bureau, and the ongoing efforts of An Garda Síochána to enhance capacity in this area by establishing regional cybercrime units are very welcome. My Department will continue to work with An Garda Síochána and all other relevant bodies to enhance Ireland’s response to cyber enabled Fraud and economic crime.
Combating and preventing fraud falls under the remit of several different Departments and Agencies, and my Department continues to cooperate closely with colleagues across the whole of Government on this issue. As I’ve said, I look forward to receiving the report of the Review Group on Ireland’s Anti-Fraud and Anti-Corruption Structures, where all of these Departments and Agencies are represented, and are all actively contributing to the work of the group. I anticipate that the group will make robust and far-reaching recommendations, which will help to inform the further strengthening of Ireland’s legislative and policy response to fraud, corruption and economic crime generally.
Before I finish, I would like to stress the importance of companies and individuals reporting incidents of fraud to An Garda Síochána. Too often, we hear of a reluctance to report for fear of professional reputational damage or personal embarrassment, but this is something that these fraudsters rely on when targeting their victims. There is no shame and no embarrassment in being the victim of fraud. This type of criminality employs technological tools and other techniques to expose potential vulnerabilities, which can be exploited to the detriment of their targets.
And we are all at risk.
I again want to emphasise how reporting incidents of fraud to law enforcement ensures that those who are best placed to respond can do so quickly.
It is in the interests of the State, the business community and society generally to prevent and combat fraud and related crimes. This conference represents an important and collaborative step in this process, and I know that it will produce valuable insights and ideas.
Thank you for your time.
Bobby was joined by James Tracey the managing director of StubbsGazette. StubbsGazette is one of the oldest ever publications that was started in 1828. James Tracey bought this business in 2008. StubbsGazette claim to be the oldest fraud prevention and credit bureau in the world. Bobby met with James to discuss the companies success.
Financial crime, is that fraud? This was a question I was asked after I said my day job is a financial crime investigator. "Yes," I said with conviction and then added, "Well yes and no."
If only it was that simple.
More than 20 years ago, I joined a big accountancy firm. I was young, ambitious and full of wonder for what was to come. Memories from my initial years as a forensic accountant include the investigations that involved counting things: petty cash, pigs, designer handbags, scrap platinum, bags of animal feed and my favourite, gold bars. I can't remember the last time an investigation I worked on actually involved a stock take.
That is because fraud has, without doubt, evolved beyond the traditional theft and misappropriation. What has now emerged is the murky world of financial crime spreading and morphing at great speed, fuelled by technological advances and the ambition and creativity of unscrupulous - and often cruel - perpetrators.
You could be forgiven for thinking financial crime is just a "buzz word" or a "concept" and not representative of an actual crime taking place. You'd be wrong. Financial crime underpins organised crime which drives human trafficking, drug trafficking, kidnapping and terrorism to name a few.
There is no single definition of financial crime in Irish law. Money laundering, bribery and corruption, cybercrime, handling the proceeds of crime, financial markets abuse, and accounting and tax fraud are all considered financial crimes. The list is endless and constantly changing.
At one level, financial crime is simple. If you take money laundering as an example, the criminal is driven by the need to access a financial system to launder the proceeds of crime.
They will take the easiest route to do so, often using technology to improve the speed at which the transaction takes place or to increase the volume of illicit proceeds being laundered.
Every evolution in the financial economy presents new opportunities and techniques for them to exploit.
Rapid development of enabling technology, the internet, online banking and shopping, mobile and flexible payment channels and more recently, cryptocurrencies, have created potential new vehicles for criminals to abuse.
While there has been an acknowledgement in the past that financial crime primarily impacted financial services, today all organisations, no matter the industry, are exposed. Tightening regulation, growing customer demands for integrity, transparency and increasing criminal sophistication are creating the perfect storm.
So, what action is needed?
There is a strong call from customers, regulators, shareholders and society at large for business leaders and boards to seek out effective strategies to protect their organisations from from monetary and reputational loss.
The vast organisational complexity of global corporations increases the threat of financial crime simply by virtue of their size. The real issue is not that management is undertaking and hiding illicit activity, but that companies are not well equipped to collect, share, monitor, and analyse the data which provides the warning signs.
New technologies can help, yet investigation professionals may not know how to use, or may resist new technology. Expertise is also an issue. An organisation that hires data scientists to conduct fraud analysis may discover they can crunch numbers but lack critical knowledge to interpret the output.
Nevertheless, ongoing scrutiny and awareness is what is needed. Right now, our focus should be on using technology to reduce manual and duplicative processes, shifting valuable resources from repetitive review processes to areas requiring the judgment and decision-making capabilities unique to humans.
At Deloitte, we continue to fight the good fight for our clients. We are a team of accounting, compliance and tech specialists who ultimately have an innate sense of right and wrong. This drives our need to find a solution, even if the goal posts keep moving.
finally, a smile appeared on my face recently when I saw the results of a study by the Association of Certified Fraud Examiners on fraud.
Traditional fraud still exists globally. In fact 89pc of the traditional frauds surveyed related to theft of assets. My stocktaking experience may come in handy yet. Bring on the gold bars.
A leading New York detective is coming to Dublin to take part in a fraud conference next month.
Dermot Shea, Chief of Detectives with the NYPD, will speak at the International Fraud Prevention Conference at the RDS on May 17.
Chief Shea, whose parents are Irish, is in charge of the NYPD's 6,000-strong Detective Bureau which investigates all major crimes in the city, including Wall Street investigations. His officers are also in charge of the sexual assault investigation into former movie producer Harvey Weinstein.
Conference organiser James Treacy said: "Dermot Shea is one of the most high-profile police officers on the globe. He will give his insights into investigating money laundering, corruption and fraud."
The conference, being opened by Justice Minister Charlie Flanagan, will focus on money laundering, insurance fraud and cyber crime.
Chief Shea will be joined by a list of expert speakers including former High Court President Nicholas Kearns, Barry Galvin, founder of the CAB, and international money laundering expert Deirdre Carwood, of Deloitte.
Interpol estimates the value of fraud for the year up to May 2018 was €3.7 trillion. Globally, the banks are losing $100bn a year as a result of fraud and fines for not adhering to anti-fraud and money laundering legislation.
Separately, $2 trillion is laundered each year by terrorist and criminal organisations with the estimate that just 1pc of this is intercepted by law enforcement.
So-called Romance fraud, where people using dating sites are hacked is, according to a recent CNN report, costing at least $143m a year.
The lack of preparedness among Irish firms for GDPR changes and the European Commission's anti-money laundering directives has led to widespread fines, James Treacy, managing director of Stubbs Gazette, has warned.
High-ranking officials from banks, insurance companies, and government agencies alike will converge on the RDS for the company's fraud and cyber crime conference on May 17.
Treacy said that the topic had become particularly relevant in recent times.
"With the introduction of GDPR and the new EU anti-money laundering directives it makes it a lot easier for organisations such as banks and government agencies to share information as long as they have a legitimate purpose," he said.
"However, almost all of the major banks in Ireland have been slapped with fines, not because they're aiding money laundering but rather that they haven't got their documentation in place and they're not seen to do their screening and their ID verification checks."
Treacy described fraud as the "last great unreduced business cost" and said that it was costing around €3.8 trillion annually.
He said that he expects around 500 people, predominantly chief executives and chief technology officers, to attend. "The theme is collaboration and it's not just focusing on one aspect of fraud. At the moment there seems to be a big emphasis on cyber crime but that's only one aspect of the whole fraud scenario," Treacy said.
Mary Aiken, a cyberpsychologist and adviser to Europol, former High Court president Nicholas Kearns and Ibec CEO Danny McCoy are among the speakers, while the Sunday Independent is a media partner.