Hasan Ali Khan loves horses and that is his known occupation. But underneath he holds unaccounted deals worth Rs 35,000 crore with an alleged connection in a multi-crore Hawala scam.
Pune-based stud farm owner Hasan Ali Khan, being investigated for alleged tax evasion and money laundering, was grilled by income tax authorities.
Hasan Ali has Rs 35,000 crore of wealth, 10 Swiss Bank accounts plus what's still not known!
Syed Hasan Ali at the centre of a major money-laundering racket also has a history of several petty criminal cases in Hyderabad before he moved to Pune several years ago.
Two cases relating to the Foreign Exchange Management Act[FEMA] and a bank fraud were registered against one Hasan Ali, resident of Banjara Hills in the '90s. The police said they were yet to ascertain if he and the horse trader of Pune were one and the same.
The Income-Tax department suspects that Ali could be a big player in the hawala market.
How does hawala work?
Hawala works by transferring money without actually moving it. In fact 'money transfer without money movement' is a definition of hawala that was used, successfully, in a hawala money laundering case.
Hawala is an alternative or parallel remittance system. It exists and operates outside of, or parallel to 'traditional' banking or financial channels.
I will give one example:
Suppose Person A is working in USA and his friend say Person B is in INDIA and he is interested in buying some gadgets from USA,so Person B tells Person A's father in INDIA that he needs some X goods from USA and asks for the cost of those goods in rupees to his father.
After a week Person A sends goods which was demanded by Person B from INDIA.
After receiving the goods and checking goods are working fine,Person B pays amount in rupees to Person A's father in INDIA.
In above example no actual movement of the funds out of country is done.This is also a case of HAWALA.
After reading above example:
I have one questions for all the readers of this blog that after knowing about the HAWALA working do you think Mr.Hasan Ali will be punished or not?
Source : www.sify.com
Contact me: rahuljoshi82@gmail.com
Tuesday, March 20, 2007
Friday, March 9, 2007
BANK FRAUDS IN INDIA
Total fraud loss to Indian banks in year 2005-06 was Rs.1381 crores according to
the Report published by RBI.
Existence of the internal controls is still the methodology in India to catch the frauds.
Collusion of the borrowers and the employees is the biggest cause of the bank frauds.
Money laundering is considered to be the risk of frauds in future.
Training the bank employees is the most effective way to prevent the bank frauds.
the Report published by RBI.
Existence of the internal controls is still the methodology in India to catch the frauds.
Collusion of the borrowers and the employees is the biggest cause of the bank frauds.
Money laundering is considered to be the risk of frauds in future.
Training the bank employees is the most effective way to prevent the bank frauds.
Sunday, March 4, 2007
Frauds Related to IT sector
Frauds are rampant in IT Sector
Rahul P. Joshi
Background
Information technology has changed our lives to a great extent; it has added tremendous comfort to the life style of the middle-class employee. I have personally realized the change in the lifestyle. Evolution of the technology is a real boom but with this evolution another breed is also growing and that is of the Con men. This paper is just a small effort to bring the frauds in the IT sector before the world.
Incidences witnessed
In recent past India has witnessed some incidences in the IT sector. However let me disclaim at the first that these are not the instances specific to Indian IT sector only. This can happen to any IT company-having offices at multiple locations and multiple countries.
Ghost Employees Fraud
Definition
Generally this term refers to someone on the payroll who doesn’t actually work for the company. The ghost frequently is ex-employee or a created fictitious employee altogether.
Example of Ghost Employee Fraud
In a Pune based small IT Company with not more than 100 employees the accountant added altogether a fictitious employee on the payroll who never worked for the company. But every month the ghost used to come to pick up the pay-Cheque. Accounts Controller became alert seeing a person who was not a supplier, nor the employee coming and picking up the Cheque. This scheme lasted for 12 months and caused loss to the IT Company of Rs.2.5 lacs.
Data Theft
Definition
Data is any information is illegally copied or taken from a business or other individual. Commonly, this type of information is user information such as passwords, social security numbers, credit card information, other personal information, and/or other confidential corporate information. In IT sector the most important data is Software Code. There is no valuation of this data.
Example of Data Theft
In a Bangalore based IT Company CEO of an offshore development unit formed a web of the companies to circulate the software code that was being written at his office for their client. This code was meant to be sold to some other competitor company when the employee of an offshore development unit tipped-off these intentions to the client.
There are many innovative ways to steal data. Now days it is trend in the project managers to lodge the false complaints of laptop theft. Companies replace the Laptops immediately once the FIR is filed. But while replacing the laptops companies need to take action against these irresponsible managers because they lose the valuable data.
Now day’s managers or leads also tend to copy data on pen drive or write confidential data on cd’s and bring this very important data out of company which is violating the confidentiality laws.
I also heard a new and innovative idea of stealing the data. IT company employees take the data on the MP3 player or Ipod. They copy this data and delete it on the work station itself. After checking the USB drives physically nothing suspicious is seen in the same.
Using the data recovery software this data is again retrieved.
It seems in the era of IT every one is getting smarter except the decision makers or the rule-makers.
Two Sets Of Books Of Accounts
Definition
Fraudster maintains the different books of accounts for statutory purposes and for the actual purposes.
Example of Two Sets Of Books Of Accounts
Chennai based video surveillance company obtained funding from US Company. US Company reimbursed the costs of Indian company plus a certain amount of Mark-up. The promoter of the Indian company maintained two sets of the lease agreement. One was actual lease agreement made between landlord and Indian company and other was the forged company.
How to fight against frauds?
There are three stages in the prevention of the frauds in IT sector
§ Setting the tone at Top
§ Creating the awareness about frauds
§ Regular Review
Setting the tone at Top
If the company has intent to promote consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations then having the Fraud policy is the first stage. Clearly displaying the fraud policy plays a very crucial role. Now days it is also recommended that every IT company should have the fraud control unit. Having the whistle blowing policies and structures is an essential step to show the integrity of the top management
Creating Awareness of frauds
Not all the employees are bad but those who are bad are much smarter. Many times it so happens that the employee is the passive witness to the act of the frauds. If they are provided the knowledge of the anti-fraud measures they can help the managements to combat the frauds.
Regular Review of financial processes
According to the surveys carried out by various institutions in India it very essential to have the regular assessment of the frauds done from the experts in fraud prevention. Ultimately when fraud happens loophole in the system is penetrated it becomes essential to pluck these loopholes.
Rahul P. Joshi
Background
Information technology has changed our lives to a great extent; it has added tremendous comfort to the life style of the middle-class employee. I have personally realized the change in the lifestyle. Evolution of the technology is a real boom but with this evolution another breed is also growing and that is of the Con men. This paper is just a small effort to bring the frauds in the IT sector before the world.
Incidences witnessed
In recent past India has witnessed some incidences in the IT sector. However let me disclaim at the first that these are not the instances specific to Indian IT sector only. This can happen to any IT company-having offices at multiple locations and multiple countries.
Ghost Employees Fraud
Definition
Generally this term refers to someone on the payroll who doesn’t actually work for the company. The ghost frequently is ex-employee or a created fictitious employee altogether.
Example of Ghost Employee Fraud
In a Pune based small IT Company with not more than 100 employees the accountant added altogether a fictitious employee on the payroll who never worked for the company. But every month the ghost used to come to pick up the pay-Cheque. Accounts Controller became alert seeing a person who was not a supplier, nor the employee coming and picking up the Cheque. This scheme lasted for 12 months and caused loss to the IT Company of Rs.2.5 lacs.
Data Theft
Definition
Data is any information is illegally copied or taken from a business or other individual. Commonly, this type of information is user information such as passwords, social security numbers, credit card information, other personal information, and/or other confidential corporate information. In IT sector the most important data is Software Code. There is no valuation of this data.
Example of Data Theft
In a Bangalore based IT Company CEO of an offshore development unit formed a web of the companies to circulate the software code that was being written at his office for their client. This code was meant to be sold to some other competitor company when the employee of an offshore development unit tipped-off these intentions to the client.
There are many innovative ways to steal data. Now days it is trend in the project managers to lodge the false complaints of laptop theft. Companies replace the Laptops immediately once the FIR is filed. But while replacing the laptops companies need to take action against these irresponsible managers because they lose the valuable data.
Now day’s managers or leads also tend to copy data on pen drive or write confidential data on cd’s and bring this very important data out of company which is violating the confidentiality laws.
I also heard a new and innovative idea of stealing the data. IT company employees take the data on the MP3 player or Ipod. They copy this data and delete it on the work station itself. After checking the USB drives physically nothing suspicious is seen in the same.
Using the data recovery software this data is again retrieved.
It seems in the era of IT every one is getting smarter except the decision makers or the rule-makers.
Two Sets Of Books Of Accounts
Definition
Fraudster maintains the different books of accounts for statutory purposes and for the actual purposes.
Example of Two Sets Of Books Of Accounts
Chennai based video surveillance company obtained funding from US Company. US Company reimbursed the costs of Indian company plus a certain amount of Mark-up. The promoter of the Indian company maintained two sets of the lease agreement. One was actual lease agreement made between landlord and Indian company and other was the forged company.
How to fight against frauds?
There are three stages in the prevention of the frauds in IT sector
§ Setting the tone at Top
§ Creating the awareness about frauds
§ Regular Review
Setting the tone at Top
If the company has intent to promote consistent organizational behavior by providing guidelines and assigning responsibility for the development of controls and conduct of investigations then having the Fraud policy is the first stage. Clearly displaying the fraud policy plays a very crucial role. Now days it is also recommended that every IT company should have the fraud control unit. Having the whistle blowing policies and structures is an essential step to show the integrity of the top management
Creating Awareness of frauds
Not all the employees are bad but those who are bad are much smarter. Many times it so happens that the employee is the passive witness to the act of the frauds. If they are provided the knowledge of the anti-fraud measures they can help the managements to combat the frauds.
Regular Review of financial processes
According to the surveys carried out by various institutions in India it very essential to have the regular assessment of the frauds done from the experts in fraud prevention. Ultimately when fraud happens loophole in the system is penetrated it becomes essential to pluck these loopholes.
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