LW334-

SERIOUS
FINANCIAL
CRIME
Tutorial 2/ Structured
Reflection 2

Benazir Nisha
BENAZIR NIKITA NISHA (S11174604)
RAKSHA SHAYAL PRASAD (S11086812)
KUSHAGRA AYUSH LACHMAN (S11156918)
 "In a digital age, our financial system is more prone to online fraud and financial
crimes in particular."

As the world shifts its reliance on digital technology, the risks of fraudulent activities and
financial crimes via online platforms has become profound in nature. Today, online payments
are used for an increasing number of purchases. The convenience of making purchases or
paying for services online with a computer, tablet, or mobile phone is available. Online fraud
is considered to be any “fraudulent activity done through any Internet related means”1. Some
common fraudulent methods involve tricking victims into revealing their personal
information via email, websites, or online messaging services (like Facebook, Messenger or
WhatsApp). Majority of the time, criminals are searching for bank logins, credit card
information, or personal information that can be used to pose as a victim. To safeguard
against online fraud, the financial system must overcome a variety of obstacles.

On the other hand, financial institutions are now undergoing transformation due to the
transition towards digital channels whereby hackers have and continue to transfer money
from customer accounts into theirs. For example, in Nigeria, “online scammers fraudulently
transferred a net sum of N523,337,100 from a client's account at one of the old-style banks,
posted it to 18 different accounts there, and then sent it to 225 additional accounts at 22
different banks and financial organisations”2. Consequently, the obligations that banks must
bear to reimburse the damages that their clients experience have increased. To maximise
these risks, the profiles and techniques of financial cybercrime have altered, and “institutions
must now build an improved and comprehensive approach to mitigate this new type of
threats”.3 Thus, this document will be reflecting and analysing online fraud and financial
crimes in Fiji and Papua New Guinea.

In Fiji, online fraud and financial crimes are governed by Sections 69 (2) (a) and (3) (a) of the
“Proceeds of Crime Act 1997”,4 as amended by “Proceeds of Crime (Amendment) Act 7 of
2005 and Proceeds of Crime (Amendment) Decree 61 of 2012”5. According to Section 69 (2)
(a) of the Act;
1
Gordon, S. and Ford, R., 2006. On the definition and classification of cybercrime. Journal in computer
virology, 2(1), pp.13-20.
2
Punch Newspapers. (2022). Fraudsters hack bank, transfer N523m to 225 accounts. [online] Available at:
https://punchng.com/fraudsters-hack-bank-transfer-n523m-to-225-accounts/ [Accessed 7 Nov. 2022].
3
Gottschalk, P. (2010). Categories of financial crime. Journal of Financial Crime, 17(4), pp.441–458.
4
Proceeds of Crime Act 1997 - Laws of Fiji.Laws.gov.fj. [online] Available at:
https://www.laws.gov.fj/Acts/DisplayAct/2958# [Accessed 7 Nov. 2022].

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 "Anyone who engages in money laundering commits an offence and is liable on
conviction to a fine not exceeding $120,000 or imprisonment term not exceeding 20
years.”6

Moving further, Section 69 (3) (a) of the Act states;

“a person shall be taken to be engaging in money laundering if that person engages

themselves, directly or indirectly in a transaction that involves money or other
property, that is proceeds of crime.”7

These rules were also applied in the money laundering case State v. Naidu,8 in which the
three defendants were linked to an online fraud that three victims fell for. All of the victims
had Westpac Bank accounts with access to online banking. Unauthorized funds transfers
from the victim's account were made to two different bank accounts held by the second
accused, Avenai Danford, and a person named Avitesh Chand. On the first accused's
direction, Rahul Rajan Naidu, the second accused withdrew the money from his account and
transferred it to the first accused overseas with the aid of Rimakshni Ranigal, the third
accused, who was working as the Western Union teller at the time of the offence.

The judge sentenced the first accused to 6 years and 9 months in prison with a 5-year non-
parole period after finding him guilty on four counts of money laundering. In addition, he
was mandated to pay back $12,000 to Westpac Bank within a year of his punishment. The
accused received a sentence of three years in prison with a two-year no-parole period after
being found guilty on five counts of money laundering. The third accused received a sentence
of five years in prison with a three-year no-parole period after being found guilty on six
counts of money laundering.

5
Proceeds of Crime (Amendment) Act 2004.www.paclii.org. [online] Available at: http://www.paclii.org/cgi-
bin/sinodisp/fj/legis/num_act/poca2004240/poca2004240.html?stem=&synonyms=&query=Proceeds%20of
%20Crime%20(Amendment)%20Act [Accessed 7 Nov. 2022].
6
Proceeds of Crime Act (n 1).
7
Ibid.
8
State v Naidu [2018] FJHC 821; HAC59.2013 (10 August 2018)www.paclii.org Available at:
http://www.paclii.org/cgibin/sinodisp/fj/cases/FJHC/2018/821.html?stem=&synonyms=&query=title(state
%20and%20naidu%20) [Accessed 7 Nov. 2022].

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In the Papua New Guinea case of State v Bae,9 the accused was charged for money
laundering under section 508B of “Criminal Code (Money Laundering and Terrorist
Financing) (Amendment) Act 2015”.10 The facts of the case states that the accused person
during the time of the offence was an employee of Westpac Bank (PNG) Limited. He
transferred a total sum of K72, 380. 30 from the bank’s income account into his brother-in-
law’s bank account without any supporting evidence, documentation and consent. He then
withdrew the funds from the account and/or spent it via eftpos using his brother-in-law’s
bank card, which he had without his brother-in-law’s knowledge. The accused was indicted
for a standalone count of money laundering contrary to section 508B (1) of the Criminal
Code, which states, “a person who deals with criminal property and knows or reasonably
should know that the property is a criminal property commits an offence”. 11 Section 508B
together with many other sections were added into Papua New Guinea’s Criminal Code via
“Criminal Code (Money Laundering and Terrorist Financing) (Amendment) Act 2015” 12 to
counter above-mentioned types of financial crimes.

Personal Experience & Conclusion

I was once a victim of an online scam by a very smart fake lottery agent Real sweepstakes.
Payment was via credit card with a 2.75% fee, or direct transfer with a 6% discount. Then I
received an email saying that due to logistic emails my order was cancelled and being
refunded. Unsurprisingly, there has been no reimbursement of the money. The first time I
have ever been scammed. They were really convincing and professional, and at one point I
realised it was all a fraud, which makes me feel quite disappointed. In general, it can be said
that while online or digital access makes things easier for users, it also places additional
demands on the business in terms of safeguarding online services. The necessity of a strong
risk management strategy cannot be overstated. The regular risk management programme
needs to involve the identification of new threats and operating principles and banks must
make some progress in developing a single strategy to combat cyber threats.

9
State v Bae [2019] PGNC 227; N8029 (20 September 2019)www.paclii.org Available at:
http://www.paclii.org/cgi-bin/sinodisp/pg/cases/PGNC/2019/227.html?stem=&synonyms=&query=title(state
%20and%20bae%20) [Accessed 7 Nov. 2022].
10
Criminal Code (Money Laundering and Terrorist Financing) (Amendment) Act 2015.www.paclii.org. [online]
Available at: http://www.paclii.org/cgi-bin/sinodisp/pg/legis/num_act/cclatfa2015574/cclatfa2015574.html?
stem=&synonyms=&query=money%20laundering#disp1 [Accessed 7 Nov. 2022].
11
Ibid.
12
Criminal Code (n 7).

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(Word Count: 968)

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Bibliography

1. Criminal Code (Money Laundering and Terrorist Financing) (Amendment) Act

2015.www.paclii.org. [online] Available at:
http://www.paclii.org/cgi-bin/sinodisp/pg/legis/num_act/cclatfa2015574/
cclatfa2015574.html?stem=&synonyms=&query=money%20laundering#disp1 [Accessed
7 Nov. 2022].

2. Gordon, S. and Ford, R., 2006. On the definition and classification of cybercrime. Journal
in computer virology, 2(1), pp.13-20.

3. Gottschalk, P. (2010). Categories of financial crime. Journal of Financial Crime, 17(4),

pp.441–458.

4. Proceeds of Crime (Amendment) Act 2004.www.paclii.org. [online] Available at:

http://www.paclii.org/cgi-bin/sinodisp/fj/legis/num_act/poca2004240/poca2004240.html?
stem=&synonyms=&query=Proceeds%20of%20Crime%20(Amendment)%20Act
[Accessed 7 Nov. 2022].

5. Proceeds of Crime Act 1997 - Laws of Fiji.Laws.gov.fj. [online] Available at:

https://www.laws.gov.fj/Acts/DisplayAct/2958# [Accessed 7 Nov. 2022].

6. Punch Newspapers. (2022). Fraudsters hack bank, transfer N523m to 225 accounts.
[online] Available at: https://punchng.com/fraudsters-hack-bank-transfer-n523m-to-225-
accounts/ [Accessed 7 Nov. 2022].

7. State v Bae [2019] PGNC 227; N8029 (20 September 2019)www.paclii.org Available at:
http://www.paclii.org/cgi-bin/sinodisp/pg/cases/PGNC/2019/227.html?
stem=&synonyms=&query=title(state%20and%20bae%20) [Accessed 7 Nov. 2022].

8. State v Naidu [2018] FJHC 821; HAC59.2013 (10 August 2018)www.paclii.org

Available at: http://www.paclii.org/cgi-bin/sinodisp/fj/cases/FJHC/2018/821.html?
stem=&synonyms=&query=title(state%20and%20naidu%20) [Accessed 7 Nov. 2022].