Economic Offence & Financial Crimes

Transcription

1 Economic Offence & Financial Crimes

2 CHARACTERISTICS An Economic Offence is an act where crime related to property is committed without use of force As per SC Economic offence are biggest threat to financial health of the country, the economy of the country is at stake The motive behind an Economic Offence is to acquire material advantage or to avoid a material loss by the perpetrator of the offence or his associate. Alternatively the motive is to inflict a material loss on a third party with full knowledge of likelihood of such loss.

3 SPECIALIZED AGENCIES Sr No. Economic Crimes Acts of Legislation Enforcement Authorities 1 Tax Evasion Income Tax Act Central Board of Direct taxes 2 Illicit Trafficking in Customs Act 1962 Collector of Customs Contraband Goods (Smuggling) COFEPOSA Evasion of Excise Duty Central Excise & Salt Act 1944 Police / CBI 4 Central Object Theft Antiquity & Art Treasures Act Police / CBI Money Laundering Foreign Exchange Regulations Act Directorate of Enforcement Foreign Contribution Foreign Contribution Police / CBI Manipulations (Regulation Act 1976) 7 Land Hijacking / Real IPC Police / CBI Estate / Fraud 8 Trade in Human Parts Transplantation of Human Organs Police / CBI 9 Illicit Drug Trafficking Narcotics Drugs & Psychotropic Substances Act & NDPS Act 1988 NCB 2 Police / CBI

4 SPECIALIZED AGENCIES Sr No. Economic Crimes Acts of Legislation Enforcement Authorities 10 Fraudulent Banking Regulation Act 1949 CBI Bankruptcy 11 Corruption & Bribery Of Public Servants Prevention of Corruption Act 1988 State / Anti Corruption Bureaux / Vigilance Bureaux/CBI 12 Bank Fraud IPC Police / CBI 13 Insurance Fraud IPC Police / CBI 14 Racketeering in IPC Police / CBI Employment 15 Illegal Foreign Trade Import & Export (Control) Act Directorate General of Foreign Trade / CBI 16 Racketing in False Documents Passport Act 1920 /IPC Police / CBI

5 TYPES OF FRAUDS Banking frauds Housing frauds General Cheating Stamps frauds and Counterfeit currency Cyber crime MLM Investment related crime

6 BANKING ECONOMIC OFFENCES - TYPES Frauds in Loans & Advances, Letter of Credit, Bill discounting, Cheque Discounting, Cash Credit, Bank Guarantee Misappropriation of cash in remittance, withdrawal of cash from Deposit Accounts through forged instruments Fraudulent encashment of negotiable instruments Multiple housing loans from different Banks or financial institutions on the same property, etc. Credit & Debit Card Frauds, e- commerce frauds

7 HOUSING ECONOMIC OFFENCES - TYPES Giving less carpet area, not complying with provisions of all amenities as agreed upon by Builders and other such violations of Maharashtra Ownership of Flats Act Illegally constructing and selling of buildings by Builders Not complying with the formalities related to the Conveyance of the land on which building is constructed by Builders Frauds related to MHADA property, SRA Frauds Frauds in Transferable Development Rights (TDR) In addition to this all frauds related to transactions in landed/ immovable properties

8 ECONOMIC OFFENCES - TYPES GENERAL CHEATING Frauds in Import & Export, DEPB (Duty Exemption Pass Book) License, Will, Power of Attorney, etc. Obtaining delivery of goods and fraudulent non payment of the same, Investment frauds; inviting investments by offering higher rates of interest and then defrauding, Sale of Motor vehicles obtained on rent. Frauds in respect of Non Banking Govt. Financial Institutes

9 ECONOMIC OFFENCES - TYPES STAMPS FRAUDS & COUNTERFEIT CURRENCY Counterfeiting of stamps, Stamp Papers and Franking Counterfeit Currency notes. Frauds by Govt. License Stamp Vendors and other violations of Bombay Stamps Act, etc.

10 ECONOMIC OFFENCES - TYPES INVESTMENT / DEPOSIT FRAUDS Offering people to invest in various schemes against which money earning returns are declared and then dupe investors in repayment of principal as well as interest. Introducing multilevel marketing schemes, which initially work but, after some period, become non- viable and investors are duped Introduction of non workable multilevel marketing schemes Frauds under money circulation schemes, chit funds, etc.

11 Online Economic Offences Nigerian Scam ( 419 scam ) ATM card Frauds Internet Lottery scam Phishing Vishing- SMS s, Phone Calls. E-shopping scam Matrimonial scam Online Ponzy Schemes Speak Asia Ltd. Q-net

12 Ponzi Scheme A Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The high returns that a Ponzi scheme advertises (and pays) require an ever-increasing flow of money from investors in order to keep the scheme going. The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. The scheme is named after Charles Ponzi, who became notorious for using the technique after emigrating from Italy to the United States in 1903.

13 Pyramid scheme A pyramid scheme Non-sustainable business model exchange of money primarily for enrolling other people into the scheme. take advantage of confusion between genuine businesses and complicated but convincing moneymaking scams. The individual makes only one payment, but promised to somehow receive exponential benefits from other people as a reward. A common example might be an offer that, for a fee, allows the victim to sell the same offer to other people. Each sale includes a fee to the original seller. The flaw is that there is no end benefit; the money simply travels up the chain, and only the original member earn.

14 Role of Finance Professionals

15 Discussion

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