Fraud in the News – October Edition

Leaves aren’t the only thing falling in autumn – fraudsters are too! Check out the latest in fraud headlines:

The SEC Charges Former Insurance Wunderkind With Fraud – The SEC alleges that Alexander Chatfield Burns and associate Andrew B. Scherr diverted $300 million from insurers they controlled and caused the companies to become insolvent.

MoviePass parent company under investigation for fraud – MoviePass’s owner Helios and Matheson is allegedly under investigation for misleading investors. New York Attorney General Barbara Underwood has opened a probe into the company using the anti-fraud statute known as the Martin Act.

In Fraud Detection, Everything You Do Online and Off Is a Clue – Companies are employing new techniques to detect fraud and tax evasion. Surveillance for the purpose of fraud detection will likely evolve much in the same way as any other form of “smart” surveillance: it will be partially automated, then fully automated, then persistent and even predictive.

Massachusetts mayor charged with fraud to fund lavish lifestyle refuses to step down – An embattled Democratic mayor from Massachusetts, who was arrested last week on suspicion of fraud and tax charges, is refusing to step down, calling his arrest “politically motivated” hours before city councilors pushed back a debate on how to handle the matter. Federal prosecutors allege Correia stole $231,447 from investors to fund a lavish lifestyle. He allegedly spent the money on designer clothes, a Mercedes-Benz, jewelry, his mayoral campaign, travel, student loan and credit card payments, casinos and adult entertainment. .

Mortgage fraud by wannabe home buyers is on the rise – According to mortgage-fraud researchers, income misrepresentations on home-loan applications were up 22.1 percent in the second quarter of this year compared with the same period in 2017. Most of it is not traceable to criminals trying to bilk lenders through traditional loan swindles. Rather, it’s increasingly what researchers call “bona fide” borrowers who don’t have the income to qualify but are determined to get a home mortgage, even if they have to mislead the lender.