Case study 1  

In October a motor insurance policy was purchased by Mr X. The premium was based on 4 years no claims bonus and the premium was paid by way of debit/credit card via the internet. Mr X cancelled cover on the 5th November and asked for the refund of premium to be paid by personal cheque as he had lost the relevant debit/credit card.
On 3rd December Mr X contacted the insurer’s call centre and took out cover on a different vehicle, a Vauxhall Corsa. This time he attempted to pay via a debit/credit card and initially the transaction was declined. The premium was paid in full by debit card the following day. Mr X now claimed that he had not earned any no claims bonus and bought every possible “added on” product. Once again Mr X requested that this policy be cancelled. He requested that the refund of premium should not be paid via the original debit card as that particular bank account had been closed. Consequently he asked for a personal cheque to be sent to him. This was refused with the insurer insisting that the refund should be paid via the original debit card. The insurer has subsequently established that the first refunded cheque was presented to cash converters.
Subsequent action
The series of transactions was reported to the FIU. Subsequent investigations indicated that the individual concerned appeared to be linked to a terrorist network.

Case study 2

An UK based insurer underwrote Jewellers block coverage for a Jewellery company based in Miami Florida, USA. A claim against the policy was made. However, the company owner, Mr X was unable to provide evidence of the loss and as a result an investigation took place. The investigation identified discrepancies in the financial records of the company and raised questions with regard to the movement of monies between bank accounts. Of significant interest was the transfer of funds to a bank account in Beirut. Under oath, Mr X stated that the account contained in excess of $200,000. No explanation for the movement of monies was provided and no bank statements were produced with regard to the bank account in the Middle East.
Subsequent action
This matter was reported to US law enforcement agencies by the insurer’s attorneys. The law enforcement agencies were particularly interested in the movement of funds and indicated that these could have been used for the purposes of terrorist funding

Case study 3

A leader of a terrorist organisation instructed Mr X, who was trained in Afghanistan and fought U.S. forces in the country for several years, to set aside his initial intention to volunteer as a suicide bomber and sent him to Country A to support the organisation from there. In September 2004, Mr X attempted to acquire large sums of money from life insurance companies fraudulently, intending to direct a great part of this money to the terrorist organisation in order to fund its terrorist activities. To this end, Mr X recruited Mr Y and Mr Z, Mr Y’s brother. Life insurance policies of 4 million euro were taken out for Mr Y with his brother, Mr Z, as the designated beneficiary. Mr Y was to fake a fatal traffic accident during his stay in Bountry B. By obtaining a death certificate, if necessary through bribery, the life insurance benefits were to be collected by Mr Z who would transfer the proceeds abroad via foreign bank accounts to fund terrorist activities. Mr X was primarily responsible for paying the insurance premiums for these life contracts. The plan was thwarted when Mr X and Mr Y were arrested in January 2005.
Subsequent action
Mr X and Mr Y were convicted of membership in a terrorist organisation and multiple counts of fraud. Mr X was sentenced to seven years in prison and Mr Y to six. Mr Z was also convicted of the lesser charge of supporting a terrorist organisation and fraud. He was sentenced to three and a half years in prison.

Copies of the paper are available. http://www.iaisweb.org/view/element_href.cfm?src=1/20141.pdf