Your Best Chance For Finding Bank Internal Fraud – An Overlooked Red Flag

Background: Year after year, decade after decade, a high percentage of bank “employee fraudsters” move their embezzled and misdirected funds into deposit accounts owned by, related to or controlled by themselves.  To see the popularity of this conversion method take a look on the Internet at recent bank frauds.  Four examples are shown below.  FraudVision Headquarter’s research shows that approximately 30% – 40% of all internal bank frauds involve entirely or partially converting the stolen funds into accounts owned by, related to or controlled by the “employee fraudster”.

Problem: Banks are unaware of the movement of funds between unrelated accounts because their core banking systems cannot identify it and most anti-fraud software on the market is not able to detect this.

Anti-Fraud Practices: Improve your fraud detection efforts measurably by using data analytics software for detecting movement of funds into deposit accounts owned, related or controlled by employees from unrelated sources.

Anti-Fraud Software: We are aware of only one software company who has a solution in place to address the movement of funds between unrelated accounts: Focus Technology Group, Danvers, MA.


Bank Official Charged with Embezzling Funds, False Entry in Bank Records
U.S. Attorney’s Office April 24, 2013 Western District of Pennsylvania (412) 644-3500

PITTSBURGH—A resident of Pittsburgh has been indicted by a federal grand jury in Pittsburgh on charges of bank embezzlement and false entry in bank records, United States Attorney David J. Hickton announced today. The two-count indictment named Diana Phillips, 39, of Pittsburgh as the sole defendant.
According to the indictment, Phillips was an assistant branch manager and head teller at First National Bank. Over a period of roughly three years, Phillips embezzled approximately $129,318.38 from the bank by processing fictitious general ledger transactions and making cash-in deposits into an account owned by a family member. The defendant then transferred money from the family member’s account into accounts controlled by her and/or her husband.

Former Wells Fargo Banker Charged With 80 Felony Counts For Fleecing $750,000 From Customers

United States Attorney Laura E. Duffy announced today that former Chula Vista Wells Fargo banker Ricardo Adolfo Benavente, III was charged with defrauding Wells Fargo and several of its customers by stealing and laundering approximately $750,000 from Wells Fargo customer accounts.

According to an indictment unsealed in federal court today, Benavente used his access privileges at Wells Fargo to move hundreds of thousands of dollars from the accounts of Wells Fargo customers into accounts controlled by Benavente himself. The indictment further alleges that in many instances Benavente laundered the stolen funds in order to disguise the fact that he had stolen them.

According to the indictment, from April-October 2009, Benavente, a banker at a Wells Fargo branch office in Chula Vista, stole the funds from accounts belonging to four Wells Fargo customers. He then funneled the stolen funds through various Wells Fargo accounts that he created and controlled, and which he had opened in the name of fictitious customers expressly for the purpose of conducting his scheme to defraud.

Former Credit Union Employee Pleads to Embezzlement

JANUARY 17, 2013
BOSTON – An Adams woman and former credit union employee was convicted today of embezzlement and making false entries into the books of the credit union. Patricia Piscioneri, 67, pleaded guilty to embezzling $156,571 before U.S. District Judge Michael A. Ponsor to a 30 count indictment charging her with embezzlement of funds by a credit union employee and false entries.
While employed as the manager of the former Adams Municipal Employees Federal Credit Union (AMEFCU), Piscioneri embezzled credit union funds by creating fraudulent loan accounts in the names of credit union members and depositing the proceeds of these fraudulent loans into her own account(s), her husband’s account(s), or other family members’ account(s), or used the proceeds to pay off previously obtained fraudulent loans. In an attempt to avoid detection, Piscioneri created fraudulent loan documentation, such as loan applications and promissory notes, and forged signatures on the fraudulent loan documentation. Additionally, Piscioneri created false entries in the AMEFCU accounting system and advanced the payment due dates of the fraudulent loans.

Marshall County Bank Embezzler Sentenced to Prison

U.S. Attorney’s Office May 22, 2013 Northern District of Mississippi (662) 234-3351

OXFORD—Felicia C. Adams, United States Attorney for the Northern District of Mississippi; Laurie Younger, Special Agent in Charge of the Dallas Region, Office of Inspector General for the Federal Deposit Insurance Corporation; and Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation in Mississippi, announce that:
Deborah Shaw, 53, of Waterford, Mississippi, former employee of Merchants and Farmers Bank in Holly Springs, has been sentenced by United States Senior District Judge Neal B. Biggers, Jr., in Oxford, Mississippi, following her plea of guilty last fall on one count of embezzlement by a bank employee.
Judge Biggers ordered Shaw to serve 30 months in prison, followed by five years’ supervised release. She was also ordered to pay restitution in the amount of $327,842. Ms. Shaw has been ordered to report to prison on June 17.
(WMC-TV) – A banking executive in Holly Springs, Mississippi was recently indicted and accused of embezzling money from a special benefit account for a child shot and left for dead in 2006.

Court records revealed that Deborah Shaw was accused of moving money from the benefit account to other accounts that she owned or controlled.  The indictment states that the alleged embezzlement took place while Shaw was a banking executive for Merchants and Farmers Bank in Holly Springs from 2005 to 2011.


Copyright © 2013 Risk Analytics Strategies, LLC

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