AML Mortgage and Health-Care Frauds

Fighting Money Laundering in Houses and Health


By Christopher Ernst, J.D., CFE, CAMS;Aaron Kahler, CFE, CAMS

 

2010-JanFeb-money laundering 

 

Anti-money laundering is a living and breathing interplay among fraudsters and fraud fighters. Here we explore some of the latest AML issues, pending legislation, and the effects on the anti-fraud community within two perennial targets: the mortgage and health-care industries. 

 

 

 

Most of the houses were dilapidated. Places in which no one would actually want to live. But that didn’t stop the six culprits from actively recruiting unsuspecting people to buy 210 properties at artificially inflated prices. The Dayton, Ohio, houses, according to the federal indictment, were financed with $15 million in mortgage loans fraudulently obtained through 33 lending institutions. 

The fraudsters, who operated real estate mortgage and title-insurance businesses, also paid kickbacks to the buyers they recruited, promised to pay for all repair costs to the properties and, out of the goodness of their hearts, made mortgage payments until they located suitable renters, the indictment said. Oh, yes – the six also pocketed $7 million from the loans for their “personal benefit.” The schemes lasted from March 2002 to June 2008. 

Charges against the crooks, all of whom eventually pleaded guilty, included mail and wire fraud, tax crimes, and money laundering. Hang on to that last charge; we’re going to switch to a different – but equally popular – venue for fraud. 

In July of 2009, New York Attorney General Andrew M. Cuomo announced the indictment of six individuals and seven corporations – all charged with defrauding Medicaid out of $47 million for 10 years. The indictment said that Alexander Levy, with the assistance of several cohorts, allegedly controlled many health-care entities to illegally obtain payment for the treatment of Medicaid recipients and then laundered the profits. There’s the common denominator in these two cases – money laundering.  

Anti-money laundering (AML) is a living and breathing interplay among fraudsters and fraud fighters that changes daily from external influences. Here we explore some of the latest AML issues, pending legislation, and the effects on the anti-fraud community within two perennial targets: the mortgage and health-care industries. 

 

 

 

 


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