Risk Management

Midyear fraud review

First half was full of big schemes and key regulatory developments.
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Francis Scialabba

3 min read

From deepfake CFOs duping employees for money to very real finance leaders accused of good ol’ fashioned money laundering, it’s been quite a year so far in fraud. While it’s obviously a mystery what the next six months will hold in financial scandals, CFO Brew rounded up some of the first-half highlights.

Newsworthy crime. In early June, the federal prosecutors arrested Bill Guan, CFO of multinational conservative media outlet The Epoch Times, alleging his involvement in a $67 million money-laundering scheme.

In a statement, Damian Williams, US attorney for the Southern District of New York, said Guan “conspired with others to benefit himself, the media company, and its affiliates by laundering tens of millions of dollars in fraudulently obtained unemployment insurance benefits and other crime proceeds.”

Trump trials. The first half was filled to the brim with news about former President Donald Trump’s legal troubles, namely the hush-money trial that led to the first-ever felony conviction of a former US commander in chief.

In February, a New York judge ordered Trump and others who worked with him to pay more than $450 million as part of a civil business fraud lawsuit that found Trump and company committed financial fraud by submitting false financial statements to banks and insurers. Allen Weisselberg, former CFO of the Trump Organization, was sentenced in April to five months in prison for perjury in connection with the civil business fraud lawsuit, the Associated Press reported.

And another one. In other (kinda sorta) Trump legal news, the Securities and Exchange Commission charged BF Borgers, an audit firm whose clientele included Trump Media, with “massive fraud” that affected 1,500-plus SEC filings from 2021 through mid-2023. The SEC did not accuse Trump Media, which owns Trump’s social media platform Truth Social, of any wrongdoing, CNN reported.

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Psych! Thanks to advances in technology, we’re in an era that puts the Nigerian Prince email scam to shame. In February, fraudsters successfully tricked a finance employee to transfer them $25 million by using deepfake technology to make the employee believe the request came from the company’s CFO. According to CNN, the employee set aside his initial suspicions after attending a conference call with several people he recognized from the company. The thing is, everyone in attendance—including the CFO—were not real.

Watershed moment. The former CFO of the non-profit group Detroit Riverfront Conservancy, William Smith, faces federal charges including bank and wire fraud. Federal officials allege that Smith stole $40 million over 12 years, the Detroit Free Press reported.

Fraud fighters. The year has also been flush with new rules and regulations meant to combat financial fraud.

For starters, the Corporate Transparency Act, which requires companies to report ownership information to the Financial Crimes Enforcement Network, went into effect Jan. 1. The new rule intends to catch actors who hide behind companies to commit acts like money laundering and tax fraud.

The Consumer Financial Protection Bureau recently finalized a rule establishing “a registry of nonbank financial companies that have broken consumer protection laws,” CFO Brew previously reported.

Regulators across the pond established a new watchdog group. The European Union’s new Authority for Anti-Money Laundering and Countering the Financing of Terrorism “direct and indirect supervisory powers over high-risk obliged entities in the financial sector,” according to a press release.

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.