New Europeans Use Imaginary Cattle To Milk EU Subsidies

Last week was the 50th anniversary of the European Union. There have been many benefits to the citizens of the European Union but one aspect that most European hate is the Common Agricultural Policies where sometimes farmers of member countries are paid vast amounts of money to do nothing. Here is an interesting story...

Taken from The Times, UK, October 25, 2006
By Rory Watson in Brussels

Auditors have refused to sign off accounts for the 12th year

LIVESTOCK farmers in Slovenia, only two years after joining the European Union, are proving as imaginative as Italian olive growers when claiming Brussels subsidies. Inspectors found that half the cattle that Slovene farmers said they owned, so qualifying them for special EU cow and beef grants, did not exist.

A quarter of their sheep and goats were equally invisible.

Discrepancies between farming fact and fiction, which are equally strong among the older members of the EU, cost almost €1 billion (£670 million) last year — about 2 per cent of the agriculture budget.

Nine payments worth €2 billion to olive oil producers in Spain, Greece and Italy last year were either inflated or wrong, according to the annual report of the European Court of Auditors, the EU spending watchdog. In the case of Italy, it went even further, describing two cases as irregular.

The auditors discovered that two thirds of the 95 EUfinanced regional projects that they examined, which include new roads and bridges, contained “material errors”. These ranged from a lack of proper invoices for expenditure being reclaimed to declaring costs that had no relation to the scheme being funded. There are also considerable variations in the way that national authorities apply EU rules.

Last year Poland simply gave a warning to anyone who did not apply good farming practices. Under EU law, they should have been fined almost €1 million. In Greece, farmers’ unions input agricultural data into insecure computer systems that can be modified externally at any time.

After investigating how the €105 billion EU budget was spent last year across a range of policy areas, the auditors identified “a material level of error in underlying transactions and weak internal control systems”. As a result, for the 12th year in succession, they refused to sign off the accounts, giving them only qualified approval.

They did, however, note that in 2005 the Commission moved to an accruals-based accounting system that should make the flow of EU funds more transparent.

The auditors also concluded that administrative expenditure on EU staff and premises and aid to new member states before they joined the union was “legal and regular”. They welcomed the new integrated control system that now applies to large parts of the Common Agricultural Policy and is proving effective in stamping out fraud.

Presenting the findings, Hubert Weber, the Court of Auditors’ president, said: “The underlying reason why most errors occur is that beneficiaries — farmers, local authorities, project managers — claim more than they have the right to claim.” They did so, he added, either through neglect, error or attempt to defraud.

Siim Kallas, the Administrative, Audit and Anti-fraud Commissioner, reacted angrily to the auditors’ criticism, attacking the way in which the court interpreted any errors that it found. He pointed to a German project, where the auditors rejected all the expenditure involved, although they had examined only 5 per cent of it.

“The work of finding errors by auditors is normal and eternal. What is not normal in our case is that the errors in filling formulas feed high-profile political judgment. Everything is mixed into one pot,” he said.

He also pointed out that the auditors failed to attach sufficient importance to the Commission practice of clawing back from national budgets any EU funding, especially farm payments, that had been spent fraudulently or incorrectly. Last year he claimed that this raised €2.1 billion.
However, David Bostock, the British member at the court, disputed the benefits, pointing out that this simply transferred the financial burden.

“The effect is to shift the cost of disallowed transactions from the European taxpayer to the national taxpayer,” he said.

3 Italians Arrested In EU Corruption Scandal

Taken from The International Herald Tribune, March 28, 2007
By Dan Bilefsky

Three Italians, including a senior European Commission official and an assistant to a former Italian soccer star, have been arrested for alleged corruption involving kickbacks that included free home renovations in connection with €30 million in contracts.

Jos Colpin, a spokesman for the Brussels public prosecutor's office, said Wednesday that the charges against the suspects included corruption and forgery. He said the Italians, all residents of Brussels, appeared to have been part of "a very big case of corruption" that had continued for more than 10 years.

A three-year investigation by the European Anti-Fraud Office culminated in dozens of raids Tuesday in Belgium, Italy, Luxembourg and France involving 30 EU buildings, including the commission's headquarters in Brussels, as well as banks and company offices.

Prosecutors said that those arrested included Giancarlo Ciotti, 46, an official in the European Commission's external relations department; Sergio Tricarico, 39, an assistant to Giovanni Rivera, an Italian member of the European Parliament and a former AC Milan soccer player; and Angelo Troiano, 60, a director of several property companies.

Some EU officials questioned Wednesday why a kickback investigation that appeared to amount to a few hundred thousand euros out of the EU's total €127 billion, or $169 billion, budget had taken three years to uncover and had justified raids in four countries that involved 150 police officers and 30 anti-fraud personnel.

Hans Peter Martin, an independent member of the European Parliament from Austria, who sits on the Budgetary Control Committee, said he believed the anti-fraud investigators had overreacted. "This is a classic case of an overzealous" investigation unit trying to prove its anti-corruption credentials, he said. "They have a history of using a cannon to shoot at little birds instead of going after the really big animals."

Max Strotmann, the spokesman for Siim Kallas, the EU's anti-fraud commissioner, defended the inquiry, saying that the arrests showed that the union's anti-corruption drive was working.

"Complicated cases like this with a trans-national dimension can take a long time to investigate," he said. "The EU has a zero tolerance approach to fraud and this case serves as a warning that fraud, no matter how much money is involved, is taken very seriously."

EU officials said the Anti-Fraud Office began investigating the case in 2004 after a Finnish company complained that it had been unjustly denied an EU contract in New Delhi. There were further allegations in 2005, one official said, that Ciotti had been receiving kickbacks to ensure that Troiano won contracts related to EU delegations abroad. The kickbacks allegedly included the renovation of Ciotti's Brussels home, the official said.

Johannes Laitenberger, the European Commission spokesman, said the case was specifically related to the rental and acquisition of furniture and security installations for EU delegations in the 27-member bloc. "There is a suspicion of corruption and manipulation of public markets .

The real question is to what degree were prices increased," he said.

He added that the inquiry had been initiated by the European Commission itself, which had alerted the anti-fraud unit.

An official said Troiano, the Italian businessman, was alleged to have set up several rival construction companies - all under his control - that bid for the same EU contracts, not all of which were publicized. The alleged involvement of Tricarico, the parliamentary assistant, was unclear, but the official said investigators had unearthed evidence that he had fraudulently used European Parliamentary stationery as part of the scheme.

Rivera, who on Wednesday was planning to give a speech to the Parliament on fraud in European football, was not implicated in the investigation, an official said.

The anti-fraud unit, which has an annual budget of €62 million and employs 600 people, including 160 investigators, was set up in 1999 after financial scandals that culminated in the resignation of the European Commission. The unit, which is part of the commission but which conducts its investigations independently, has been struggling to establish its credibility after a series of critical reports about its management.

Two years ago a report by the EU court of auditors concluded that the unit was disorganized, unaccountable and took too long to conduct investigations. "Files take a very long time to process, the reports submitted are inconclusive and the results are difficult to identify," the report said.

In May 2005, it was accused of mishandling an inquiry into the case of a Brussels-based journalist, Hans-Martin Tillack of Stern magazine, whom it accused of bribing officials to obtain information. Tillack had exposed a scandal at Eurostat, the EU's statistics arm, in which millions of euros disappeared into secret bank accounts.

At the time, the EU ombudsman investigating the Tillack case, which resulted in raids by the Belgian police at Tillack's home and seizure of 20 boxes of his files, said that the inquiry had been mishandled.

The Con Remains The Same (Nigerian Email Scams)

I have just received my first Nigerian email scam so I thought I'd publish this interetsing article...

Taken from The Sydney Morning Herald, Australia, February 19, 2007
By Nick Galvin

In among the offers of cheap drugs, hot share market tips and penis enlargement schemes jostling daily for attention in your inbox, you will almost certainly have received "Nigerian scam" emails.

The Nigerian scam, also know as 419 fraud after the section of the Nigerian criminal code it violates, has many variants but the basis of the con remains the same.

The victim is promised millions of dollars in exchange for helping with a scheme that in itself is quasi-legal. Once hooked, the victim is persuaded to part with increasing amounts of cash to cover "administrative" fees. In the end, the fraudster disappears with the money.

Usually these "scambaiting" emails are easily recognisable and most people do the right thing, binning them immediately. However, incredibly, the scam continues to net hundreds of millions of dollars worldwide.

This brings us to a cautionary tale from a reader, Michael (not his real name). What separates his experience from the run-of-the mill 419 scams is that the fraudsters took the extra step of finding out a lot of his personal details before contacting him.

The scam started with an email addressed personally to Michael - both his first and second name. Infuriated by this intrusion into his privacy, he did what he would normally never do and emailed back to tell "Rev F. R. James" where to stick his promise of a multi-million-dollar bequest.

"It was a stupid response," Michael says. "But I get 30 to 40 junk mails every day that I have to wade through. It was the end of a long day and I had had enough."

Another personally addressed email arrived the next day - and then the phone calls started in the early hours. "It sounded like a call centre on the other end - no one spoke - so I just slammed down the phone," he says. "It was 4am."

This was then followed up by the same calls on his mobile phone, which got the same treatment. Then, while Michael was at work, his wife received a series of calls.

"She picked up the phone and there was some person saying that they desperately wanted to speak to me," he says. "They were being really insistent and demanding. It was really scary. My wife was in tears. She was really frightened because she didn't know whether these people were down the road or overseas."

By now, Michael was seriously concerned and he took the drastic step of barring all incoming overseas calls - which is a serious inconvenience but, he says, worth it to stop the frightening messages.

Russell Smith, principal criminologist at the Australian Institute of Criminology, says personally addressed 419 emails were unusual but not unheard of.

"Most advanced-fee fraud attempts are not addressed personally but there [are many] data bases of personal information circulating among fraudsters," he says.

Michael's name could have come from such a hacked or stolen database. Smith said the other possibility was that the scammers were local and targeting people by collecting personal details online and from other sources. Michael runs a small business and its website has his contact details.

Smith's advice to anyone receiving 419-type emails is to delete them immediately. "Bin it, delete it and ignore it but certainly do not enter into any correspondence with these people," he says.
You've been warned.

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Despite massive counterfeiting of U.S. currency and checks in Nigeria, the American law enforcement agency with principal jurisdiction, the Secret Service, has closed its office in Lagos, Nigeria. Nigerian officials said the decision has hurt efforts to crack down on criminal rings that produce the counterfeit currency and cheat thousands of Americans with online scams.

One of the most famous people to be duped is Ed Mezvinsky, a former Democratic Congressman from Iowa, who is serving a seven-year sentence for fraud after getting caught up in a series of Nigerian e-mail scams. Prosecutors say Mezvinsky used his connections to the Clintons and his son's social relationship with Chelsea to persuade people to give him money to participate in the scams. Mezvinsky traveled to Nigeria numerous times and ultimately lost more than $3 million as a victim of the scammers. Prosecutors say Mezvinsky fell particularly hard for what is known as the "black money" scam. Victims are told millions of dollars have been coated with black ink so the money could be smuggled out of Nigeria. Prosecutors say Mezvinsky fell for at least three separate "black money" schemes that he thought would bring him millions.

There are groups of people that are hitting back at these Nigerian scams. One of them is 419 Eater. Check out their website. It is really funny.

Here are some "must see" investigative video reports from ABC News

Confessions of a Scam Artist

Master vs. Mugu: Nigerian e-mail scams rip off millions of gullible Americans

US Officers Charged Over Iraq Scam

Taken from Al Jazeera News Agency, 08 Feb 2007

Three US reserve officers are to stand trial for allegedly taking part in a bid-rigging scam that steered millions of dollars for Iraq reconstruction projects to a contractor in exchange for cash, luxury cars and jewellery.

An American businessman in Romania and the husband of one of the officers were also named in an indictment on Wednesday.

Together, the five are said to have used the $26 billion Iraqi rebuilding fund "as their own personal ATM machines," Paul McNulty, the deputy attorney general, said as he announced the indictment.

"These defendants actually took bricks of stolen cash ... and smuggled them out of Iraq and back to the United States for their own personal use," he said.

The 25-count indictment, filed in US district court in New Jersey, follows an investigation into $8.6 million worth of Iraq contracts awarded to construction mogul Philip H Bloom.

Bloom, an American citizen who ran construction and services companies in Iraq, has admitted to laundering at least $2 million and is awaiting sentencing.

The money was stolen from reconstruction money managed by the US-led Coalition Provisional Authority in Iraq, which is now defunct.

CPA fund 'misused'
McNulty said the five people stole or otherwise misused $3.6 million from the CPA fund.

The three reservists - Curtis Whiteford, Debra Harrison and Michael Wheeler - helped supervise the funding and progress of the CPA contracts in al-Hillah, southwest of Baghdad.

Prosecutors said that, in return for steering contracts to Bloom between 2003 and 2005, the reservists and their accomplices shared an estimated $1 million in cash, and received Porsche and Nissan sports cars, real estate, watches and business-class plane tickets among other items.

Harrison's husband, William Driver, was charged with helping smuggle over $300,000 into the United States, part of which was used for home improvements, prosecutors said.

One of Bloom's friends, businessman Seymour Morris Jr, a US citizen who lives in Romania, was also charged with allegedly acting as a go-between for the military officers and the construction company. He was arrested in Romania on Tuesday.

Money trails unraveled
Charges against the five include bribery, conspiracy, wire fraud, money laundering and transporting stolen property.

US Immigration and Customs Enforcement agents helped unravel the scheme by examining money trails and other data gleaned from computers, cell phones, global positioning systems and other devices, said Kumar Kibble, the agency's deputy assistant director for national security.

Stuart Bowen, the US government's special inspector general in Iraq, said his team of 10 investigators are pursuing 80 cases of waste, fraud and abuse of federal money in reconstruction contracts.