“Identity Fraud and Transnational Crime”

Introduction

This topic is extremely timely from a Canadian perspective.  Canada has been preoccupied with a number of debates related to laws and government policies pertaining to people smuggling and illegal migration. In recent months, the Canadian media has been inundated with news reports that address not only the issue of human smuggling but also the use of false identification to facilitate this activity.  Of particular significance is the interwoven corruption that plays a significant role in many of the false identity schemes. Hence, the topic is important for 3 diverse reasons:

·                    the role played by various ‘officials’  forces us to acknowledge corruption issues;

·                    the creation of false identification is a criminal market in and of itself; and third,

·                    the need for false identification can be seen as a precursor for future crime.

Corrupt acts that facilitate the acceptance of (or obtaining) fraudulent documents take diverse forms. Immigration and police officers working at entry points have been vulnerable to involvement in criminal schemes. The media has highlighted the illegal pursuits of some officials at a number of Canadian consulates, who have been allegedly “selling” Canadian visas. Most recently, an Ontario court convicted a former Immigration Judge for his involvement in aiding the illegal migration of a number of Chinese families (Mitrovica, 2000) .  Thus, this paper comes at a time when Canadian officials and the public have turned their attention to defining the ‘problem’ of people smuggling and identification fraud.

Perhaps some of you may have seen or heard about the recent release of a movie entitled “The Talented Mr. Ripley”, based on the novel by Patricia Highsmith. This movie is a suspenseful thriller about a handsome, wealthy bachelor with a beautiful girlfriend and all the finest things money can buy--and an envious friend who schemes to murder him and assume his identity. This movie provides some insight into the dangers and consequences associated with assuming someone else’s identity.

However, the story of Mr. Ripley does not reflect the most common purpose of documentation fraud; that is, how identification fraud is generally connected to transnational organized crime. Rather than assuming an identity for its’ own sake, individuals involved in transnational organized crime generally use false identities to deceive authorities in order to commit other crimes, such as buying goods or investing illegal profits under different names. In this way, identity fraud provides a vehicle for convicted felons and other criminals to commit more crime and elude authorities. Thus, fraudulent documents and identification allow organized criminals to engage in more complex and structured criminal schemes rather than merely providing individuals with new identities in order to elude officials and construct a new life.

In this brief paper, we will explore the meaning and scope of identity fraud and its’ relationship to transnational organized crime. As we will show, identity fraud, as is the case with money laundering, should be treated both as an independent crime and also as the means to achieve greater criminal ends.  Indeed, documentation fraud generally acts as a facilitator to criminal activity.

Cases involving identity fraud tend either to be ‘invisible’ in the sense that there is no detection, or high profile. Once a case becomes high profile the media typically portrays Canada’s sovereignty as being put ‘at risk’ from the fraudulent use of legal documents, the ‘flood’ of illegal aliens, or the fraudulent manufacture of false identity documents. The high profile cases—usually around issues of immigration and transnational crimes—have directly influenced Canadian policies.

This paper will present the measures that are currently being proposed and adopted by the Canadian state to counter identity fraud and related crimes.  Canada has always seen herself as a humane/caring nation.  For this reason, ‘tightening’ and ‘toughening’ entrance procedures must always be ‘balanced’ against humanitarian considerations. Where this balance-point is, is open to debate—and receives much debate.  This paper will present some of these criticisms of the proposed solutions to the ‘problem’ of identification fraud and illegal migration.


Defining Identity Fraud

Identity fraud can be carried out either by counterfeiting documents of identification such as passports or by using stolen documentation. Identity theft involves:

“…acquiring key pieces of someone's identifying information in order to impersonate them and commit various crimes in that person's name. Besides basic information like name, address and telephone number, identity thieves look for social insurance numbers, driver's license numbers, credit card and/or bank account numbers, as well as bank cards, telephone calling cards, birth certificates or passports.” (Cavoukian, 1997)

These pieces of identification can be purchased or rented from specialized criminals in order to assist the movement of peoples between countries. For cases involving illegal immigration, passports have been the most popular forms of identification to be bought or rented.  Prices for the forged/stolen documents vary greatly, depending on the quality, the purpose to which the documents are to be put, and the risks to the supplier. The prices range from a high of $25,000 for black-market Canadian passports, to a low of $500. In cases involving terrorism and espionage within the Middle East, the price of Canadian passports has been reported to be as low as $500 US (Ayed-Nahlah, 1997) .

Renting is also an option—the price for renting passports is reported to be approximately $5,000 with a deposit system that allows the ‘user’ to get some of the money back after he/she returns the documents upon arrival at the destination. (Phone interview with RCMP Superintendent Ben Soave).

This paper will concentrate on the issue of identification fraud from a traditional perspective, meaning the fraudulent use of traditional means of identification such as passports, identification card, social insurance numbers and health care cards, by criminals. Other important forms of identification fraud exist but this paper will not address the issues related to forms such as:

·                    the acquisition of stolen or cloned credit cards or financial documentation, allowing criminals to commit numerous forms of fraud.  Fraudulent activities include taking over the victim's financial accounts, opening new accounts, applying for loans and credit cards, spending money under the victim's name, and/or diverting the victim's financial mail to the thief's address (Cavoukian, 1997) .

·                    electronic identity fraud, which involves the impersonation of someone else through electronic media resources in order to access e-mail, Internet banking accounts, electronic financial services in general, and special or secure services over electronic networks.

·                    the fraudulent ‘identification’ of goods for importing or exporting and the fraudulent documentation that serves as invoices, shipping documents and customs slips to move illicit goods around the globe.



In the more narrow sense that we are using the term, identification fraud is the portrayal of another person with the intention to deceive authorities or to commit a crime. In most jurisdictions, identity fraud is a crime itself, independent from those crimes committed by using false identification.[1] Impersonation is possible by using false identification documents, such as passports and identity cards, or by using stolen and fixed ones. However, identity fraud should not be restricted to the portrayal of another person. Identity fraud should also make reference to the use of false documentation to portray a non-existent link with legitimate corporations, supporting documentation for non-existent corporations, or fraudulent ones. This is usually done in order to engage in all type of criminal activities such as drug trafficking, arms smuggling, money laundering, and maritime fraud, or to gain citizenship via the entrepreneurial categories.  For example, the Toronto-based Criminal Visa Screening Team made up of the RCMP and Immigration officers uncovered a scheme by which the letterhead of legitimate corporations was being used to create bogus sponsorship letters that were presented to embassies overseas. The letters would outline supposedly joint business ventures between the applicant and the Canadian company. The objective was to obtain visas to Canada (Lamothe, 1999).

The types of crimes committed by using false identification are endless. However, in terms of the media and police exposure, there are three main types of criminal activities that involve the use of identity fraud: drug trafficking, human smuggling and terrorism. In the Canadian case the last two types of criminal activities have gained the largest amount of publicity.


The Portrayal of Canada as a 'weak link' in Immigration Policies and Identity fraud

In 1992, the Canadian government decided to impose tougher controls with relation to passport fraud.  This response was in part the result of a report filed in 1991, which found Canadian passports bearing phony names, birth dates, and dates easily obtainable and used on a regular basis by international criminals (Share, 1992) . In addition, Canada has had an image of being a 'weak link' when it comes to accepting immigrants and refugees into the country.  The difficult task for any analyst is to separate the facts from the politics—and then to determine the policies that best balance toughness with appropriate refugee and immigrant treatment. Politics—both domestic and international—takes a vocal interest in the debate.

For example, Reform Party member Leon Benoit argues that Canada interprets the UN Convention on the Status of Refugees of 1951 in a manner that is far more liberal than other countries (Fennell, 1999) . He points to the fact that female refugees can claim gender persecution, and homosexual claimants can argue persecution based on sexual orientation.  The definitions that determine who is or is not a refugee necessarily blurr. As set by the 1951 United Nations Convention refugees are those who are:

“…fleeing persecution for reasons of race, religion, nationality, membership of a particular  social group or political opinion”.

During period of war, it is often clearer (or more politically acceptable) to determine who is a ‘genuine’ refugee.  During periods between wars or in jurisdictions who are not engaged in a ‘recognized’ war, categories of people are driven by other forms of persecution—poverty, denial of legal status, slavery, gender discrimination, environmental destruction—to seek legal and illegal escape.

Paul Kaihla states that Canada's acceptance rate for refugees is much higher than in many other developed countries. A much publicized ‘acceptance’ figure is 70% compared to 17% in the United States and 7% in Germany (Kaihla, 1996) . According to The Economist (2000), Britains rate (61.6%) came the closest to the Canadian acceptance rate.  One’s changes of being accepted as a refugee in Europe, varies greatly among the different countries. Germany and France generally accept as refugees only those who have been persecuted by ‘agents of the state’. These rates for all countries are ‘approximate’ and each may be refuted on various grounds within the separate countries. The Canadian rate is open to debate since the 70% ‘acceptance’ rate only counts the number that remain in the refugee process though to the end. If all of the Canadian refugee status claimants were counted, the percentage would be considerably lower.  The accusation from those who work with refugee groups is that this much quoted high Canadian acceptance rate is used politically to justify tightening up the processes.

The key issue remains the people who are denied refugee status in Canada but who ‘slip through the cracks in the refugee process’ after Canada issues the deportation orders. It is estimated that since 1995 20,000 foreigners have vanished into the underground or into the US. During the same period 2,611 Chinese nationals vanished after being denied refugee status (Travers, 2000).

While Canadian politicians worry about the possible abuse of the refugee category and the fear of illegal aliens, the US worries that Canada is letting in terrorists though ‘the Canadian border’—as distinct from the US-Canada border! The United States has been quite vocal about what they consider 'slack' Canadian policies around immigration, particularly since the arrest of Algerian- born Ahmed Ressam at the Canada-US border in December of 1999.  Newspaper headlines announced that “Canada is terrorist haven” (Slanchfield, 2000).   Behind the barrage of US accusations, at least one of the articles from the US emphasized that blaming Canada for potential terrorist attacks made good US political press but that the cases that were often used to support the allegations of a ‘weak-neighbour’, could be interpreted to illustrate the effectiveness of some of the policing partnerships and intelligence collaborations. Ressam was arrested as he attempted to cross the US border from Canada carrying a car full of explosives.  The criticism of Canada comes from the fact that Ressam had been denied access to Canada as a refugee in the early 1990's, but he took advantage of the 1997 Canadian Government policy, which forbid deportations to Algeria as a result of political violence in the country.

Testimony in April 1999 before the U.S. House Judiciary Committee Immigrations and Claims Subcommittee on the Northern Border Enforcement Issues outlined the concerns of a 20 year serving Deputy Chief Patrol Agent at the US Blaine Sector of the US/Canada border between British Columbia and Washington DC.  Deputy chief Eugene Davis described the open fields that separated the two countries that virtually negated the need for sophisticated false documentation. ‘Berry fields separated by a slight ditch’ was characteristic of the barrier to the flow of illegal commodities and people between the two countries. Three individuals with ‘terrorist ties’ have been arrested since 1996 in this stretch of border—the most notorious being Abu Meser who eventually made it to NY where he was shot by the NY Police Department Response Team hours before he had planned to blow up the NY subway.  In January of 2000 a hearing of the House of Representatives Immigration committee was called to discuss the incident (Blanchfield, 2000) .  Texas Republican Lamar Smith felt that Canada's liberal policy on immigration was detrimentally affecting the national security of the United States. The ‘threat’ of terrorism was of particular concern.

The United States border patrol has not been without criticism itself.  A report by Paul Kaihla (MacLeans,1996), stated that RCMP claim that many Tamil refugees use phony passports to clear US Immigration. The false documents present the Tamils as being Canadian citizens who wish to visit the United States.  Once they get to the Canadian border, they claim refugee status.

Border points across Canada share similar vulnerable crossing locations. Across the St. Lawrence into New York State is considered another key area that leaves the US open to criminals being smuggled from Canada. Following a ‘bust’, which according to US Attorney-General Reno “crippled yet another criminal smuggling syndicate”,  RCMP Police Constable Paradis described the strategy used by those particular smugglers—and typical of human smuggling in that part of Canada:

“They used altered passports and fraudulent documents to spirit the Chinese citizens to Canada by airplane. Once in Canada, the aliens were instructed by the organization to claim refugee status. They were then taken to one of the many safe houses in the Toronto area where they remained until a portion of their smuggling fee was paid. From Cornwall they usually traveled by boat across the St. Lawrence to a Mohawk reserve in upstate New York before concluding their trip on New York City.” (Human Smuggling Ring Busted, 1999)

The Canadian response has certainly been influenced by criticism such as this coming from United States immigration and government officials.  In February of 2000, the Canadian Finance department allocated more money to reinforcing border controls and preventing illegal immigration facilitated by human smugglers (Laghi, 2000) . The Finance department justified its' allocations by stating that 'there is a need to address new and emerging threats, including those from terrorism, to the security of Canada and its' neighbors'.  Since Canada is generally not a target of terrorist attacks, it would appear as though the federal government response was largely the result of pressure from the United States in response to the argument that Canada is a 'weak link'.

There have been a number of high profile cases in Canada that the government has had to address in relation to immigration laws.  In the summer of 1999, two boatloads of illegal immigrants arrived on the British Columbia coast. Despite the high profile of the Chinese 'boat people', some argue that most illegal Chinese migrants come by air rather than by boat (Fennell, 1999) .  Nevertheless, the arrival of so many migrants sparked criticism both within the country and by other nations that pointing out that Canada is a safe haven for refugees and migrants, facilitated by 'people smugglers'.  It is argued that because many refugees are allowed to go free until their immigration hearing, many move underground, often traveling to the United States.

China is of course not the only source of illegal migrants to Canada who use altered documents. A smuggling ring that was uncovered in the Netherlands, revealed that illegal aliens, (large percentage of Iranians) were first being smuggled into Western Europe, then the smugglers would fly them, into Amsterdam. Once in the Netherlands they would claim refugee status or stay in a safe-house operated by the smugglers. The smugglers would then take new passport photographs of the ‘refugees’ and insert them into illegally obtained Dutch, Spanish, Italian, Israeli or Canadian passports. According to Canadian court records (Refugee Smuggling Ring Brought Thousands into Canada, 1996) one Dutch smuggling ring had lined up 300 to 400 people in the Netherlands who were waiting to be provided with forged travel documents for Canada. Dutch authorities told the Toronto Globe and Mail that as many as 5,000—mostly Iranians—had entered Canada via the Netherlands.

A number of themes appear to be relevant to understanding the issues related to identification fraud:
    The ambivalence of some Governments

According to critics of the Canadian policies such as Jonathan Winer, traditionally countries focus on inbound, not outbound movements of people and illegal commodities—that makes them poor partners. (Jonathan Winer, talk in Toronto February 22, 2000). While Canada can claim a philosophic position regarding the welcoming of refugees and new immigrants, the sanctions that have been applied in the past to the convicted smugglers, may speak to a failure to take the crimes seriously. Passport fraud and other documentation fraud play an instrumental part in facilitating human smuggling.  Before Canada's “crackdown” on human smugglers, the maximum penalty for using a phony passport was 14 years however, the most common sentence was a $500 fine (Nikol, 2000) .

Other countries may be equally ambivalent regarding the seriousness of this offense. Chinese officials have stated that they will attempt to do everything they can to crack down on the smuggling ring in their country. However, China has argued that until Canada stops accepting refugees so readily, there will be a constant flow of people from their country to Canada (Fennell, 1999) .  Chinese officials have made these comments despite the fact that they have done little to publicize Canada's harsher sentences against 'people smugglers' in the media.  In January 2000, the Immigration Minister chose to go to China to ‘urge Chinese not to come [illegally] to Canada’ (Duffy A. & Bronhkill J., 2000 p. C3).  This seemingly naive jester was largely ignored by the Chinese officials and by the Chinese media who failed to report on her pronouncements.  Critics within Canada questioned whether this strategy by the Immigration Minister adequately addressed what they saw to be a serious cross-jurisdictional issue.  Politics in various forms plays a significant role in undermining enforcement efforts. While Canada might determine that a number of Chinese citizens are to be likely candidates for deported back to China, China must accept these people.  Beijing must provide travel documents, which has tended to be a lengthy process.  As of February 2000 Canada was officially negotiating the return of almost 600 people to China.

Hong Kong is one of the busiest embarkation points for illegal migrants to Canada. It is claimed to be the world’s second-busiest port with over 15 million containers passing through every year. Following the controversy over the Chinese stowaways that were caught entering British Columbia, Hong Kong officials announced plans to implement sophisticated screening devices that are intended to detect smuggled humans and to enhance the intelligence-gathering at the container terminals and to share this information with Canadian and American counterparts (Cohn, 2000).

There have also been rumors that Chinese government and immigration officials may be involved in smuggling rings, or at least facilitate or tolerate/encourage the illegal movement of Chinese citizens to Canada (Skelton, 1999) .  The US Department of Justice, following a case code named Project Squeeze Play alleged that Beijing Government –key Chinese officials—sanctioned the human smuggling trade (Mitrovika and Korin, 2000). Whether or not this trade was officially sanctioned in Beijing, governments around the world have been implicated, either via corruption, direct policies, or neglect.

Official documentation itself can facilitate fraud. Passports around the world vary greatly, ranging from simple hand written documents to highly sophisticated and therefore harder to forge documents. This variation is of course, compounded by the numerous languages used—making the task of immigration/ customs control officers extremely difficult.  In some cases the lack of more advanced security features, the languages involved, and the variation in names used on the documents makes Asian passports particularly difficult for Western officials.

We have written before about the fact that illegal aliens–with or without false documentation—are only seen to be a problem, when they are deemed unnecessary and/or dangerous. The Economist (May 6th, 2000) in an article titled “A Continent on the Move” describes the movement of legal and illegal summer workers around the EU in search of jobs. As the article states:

“Today, Britain is far from alone in hiring workers from abroad, whether legally or illegally, to fill such jobs [farm labour]. Moroccans pick tomatoes and peppers in hothouses in south-east Spain. Poles harvest vegetables in Germany.  Sikhs from India’s Punjab pick fruit in Belgium.  Russians harvest crops in Ireland…” (p. 25-27)

As noted above, the ambivalence of governments toward illegal immigrants when migrant labour is required, is matched by the ambivalence inherent in the concept of ‘refugee’.  Varying policies among the receiving countries mean that potential illegal or false asylum-seekers have an opportunity to ‘shop’ for the country that offers the highest percentage of ‘acceptances’ while giving the widest number of benefits—from the ability to work during the application process to welfare/ health and schooling.  Together these conditions take away from a sense of legitimacy of the legal migration process.


    Potential Adverse Consequences from Enhanced Enforcement Efforts

Some experts argue that the business of human smuggling has become more popular than drug smuggling in recent years as a lucrative illegal activity with much less risk (Nikol, 2000) .  The consequences for getting caught 'people smuggling' have been much less serious than has been the case for drug smuggling.  Now, governments around the world are looking into strengthening their sentences related to people smuggling.  Canada is one such country.

According to Nikol, laws that allow authorities to intercept mail of suspected smugglers together with personal interviews (questioning/ interrogations) by immigration officials at airports, etc are effective means of detecting fraudulent documents (Nikol, 2000) .  However, the effectiveness of imposing tougher laws for 'people smugglers' has been met with ambivalence by some critics (Zarembo, 1999) .  There may be a down-side—or at least issues that must be addressed. Zarembo argues that once a developed country imposes tougher laws, these actions drive the price up for illegal migrants and create more profit for 'people smugglers' in the industry.  Such has been the case in California and Texas where American policy saw that immigration to the US from Mexico was increasingly difficult. This resulted in an increase in illegal migration in other states close by such as Arizona and profits soared for people smugglers known as 'coyotes'.

Much of the fraudulent documentation is sophisticated enough to pass through many international security systems that are in place.  Authorities estimate that despite constant changes to make passports more secure, it takes about six months before smugglers are able to replicate the features.  Bangkok, Thailand is considered by some reports to be at the center of the international documentation fraud, facilitating an estimated $10 billion dollar annual trade of human cargo.

Illegal activity around identity fraud and human smuggling has had to become more organized as a result of the crackdown by many developed nations.  According to some reporters, human smugglers have had to become more adept at monitoring the globe for weaknesses at various border crossings. Hence the enforcement efforts may have made the criminal operators more sophisticated—possibly creating a more monopolistic market while failing to reduce the illegal trafficking. World trade in humans has tripled in the last ten years (Kaihla, 1996) . 




    Rich vs. Poor Countries

The reality may be that as long as there is poverty, internal wars/conflicts and ethnic violence, there will be an active market in fraudulent documents. As the gap between the rich and the poor widens, there has been an increasing surge in migrants seeking a better life in a different country. This has facilitated the fraudulent documentation industry to expand and continued to fuel a future market for criminals.
    Corruption

The criminal market in fraudulent documents is extremely lucrative. Undercover ‘sting’ operations in Canada and in the U.S. reveal the extent of the potential money involved. Posing as an immigration officer, one undercover officer was offered $18,000 for 6 U.S. visas—he was then offered a bribe to supply visas for 110 more Chinese passports.  In 1999 the Criminal Intelligence Service Canada concluded that Vancouver, Montreal and Halifax ports had a significant organized crime presence. According to their report, Canadian maritime ports had been penetrated via corruption, intimidation and the positioning of criminals into key positions at the ports.

Corruption cases reported in the press during the last two years have involved: non-nationals working in Canadian embassies abroad fraudulently issuing visas; police officers involved in smuggling schemes; a former Citizenship Court Judge (Citizen-of-the-Year in Peterborough Ontario! ) falsifying information on citizenship documents; immigration  officers at Pearson Airport in Toronto conspiring to assist with the entry of  immigrants with false documents.  No country can ignore the impact that corruption has in contributing to the identification fraud criminal market.
Trying to determine the threat

Identity fraud is not a new type of crime. It has been used for spying purposes as in the case of the Second World War in which there was a wide use of false identification. The use of false identification has been also related to terrorism. In recent years Canada has even been a victim of such practices as in the case in which the Israeli Mossad used Canadian stolen passports in an attempted murder of Hamas leader, Khaled Meshal (Spector, 1997).

There is not however to our knowledge a study that quantifies/qualifies the real damage that our countries are suffering by the use of identification fraud or that indicates an increase in these types of activities in recent years.  For some countries, identification fraud may be a significant issue—for other countries, it may be less of an issue.  However—the point must be remembered that the ease of obtaining documents within one country can in certain cases have an impact on another jurisdiction.

In the case of some South American countries such as Colombia and Venezuela, identity fraud has been a long lasting practice in order for delinquents to disguise themselves or to commit crimes. That is the case with drug lords who have been incarcerated in Colombia, for they have been caught, at the moment of their arrest, with false identification. In Venezuela identity fraud has a different origin, which could be very similar to the Canadian or US problems. In Venezuela, identity cards are being sold by corrupt officials to allow Colombian immigrants to establish themselves in that country. However, in the first case, delinquents in Colombia are being caught regardless of the use of false identities. In the case of Venezuela the problem is more complex, because only in some cases are the Colombian immigrants involved in criminal activities. This shows how identity fraud has different ends. In the first case it is purely criminal. In the second it is a way to get a better life.

Canada seems to take a peculiar approach to all matters that relate to organized crime. Our officials—police and government—treat all information about the subject as a ‘secret’. This became clearer to us as we researched this topic and we saw the contrasting manner in which other countries dealt with their immigration information. Australia has a web-site with all types of information related to illegal immigration and identification fraud.  This public access information allows the public and the media to evaluate for themselves the extent of the ‘threat’ to Australia. No such web-site exists for the Canadian information—if indeed the Canadian information even exists to the extent the Australia has collected and analyzed theirs.[2]



Enforcement Strategies

The solution to identity fraud is not necessarily to have tougher laws with larger sentences—at least not in isolation from other measures. The solution requires cooperation among states by enhancing the ways in which the police enforce existing laws. If the penalties increase, the end result will be that the prices of the illegal commodities are likely to rise. This is an illegal market that follows the trends of offer and demand and therefore is affected by externalities such as the risk involved in the trade.  However, although we found no study that addresses it, one might suspect that the trade in fraudulent documents is quite ‘inelastic’ in the sense that regardless of the costs (within reason), approximately the same number of people will want illegal documents.

What is required are new and constructive ways in which this criminal activity could be fought at its origins and at its ends. At its origins there is a need to eliminating (or at least reduce) the disparities between have-not and have countries and in this way reduce the economic motivations that create a large market for false identification. Within the destination countries, this activity can be combated with special multi-agency law enforcement units that could concentrate on this activity.

Increasingly, as high profile cases gain massive media coverage, law enforcement agencies are vowing to enhance their cooperation and collaboration on anti-smuggling strategies:
    Increased inspections of open-top containers leaving Asian ports;
    High-tech Mobile Vehicle and Cargo Inspection System introduced into the screening done by Canada Customs;
    Costly delays and large fines imposed on the large, legitimate shipping companies serve to recruit them into the enforcement struggle to control the stowaway activity. In one case a shipping line was fined $375,000 ($15,000 per refugee claimant);
    Canadian Federal Government dedicated enhanced resources into reinforcing border security and ‘prevention’ activities: an additional  $579 million for 1999 to 2003 to Immigration with  $87 million over the three years allocated to Revenue Canada to modernize its border-management processes (Laghi, 2000);
    More joint agency operations such as the Criminal Visa Screening team (CVST) composed of RCMP and Immigration officers who scrutinize visitor visas.  (The Report on Crime and Profiteering, “The CVST gets tough on Eastern European criminals”, Aug/September 1999, p.1)
    New Bill C-31 has been introduced. We have attached an Appendix A a backgrounder on this proposed legislation.  It is not without controversy.

Citing 'national security issues' as the reason for getting tough on human smugglers Immigration Minister Caplan's introduced Bill C-31.  This new bill has the following ‘toughening’ elements:

·                    Introduces severe penalties and stiffer fines to address the problem of people smuggling and human trafficking, including a new offence --"trafficking in humans" -- that will be punishable by a fine of $1 million or life in prison or both.

·                    Provides a streamlined refugee determination process that consolidates risk assessments at the Immigration and Refugee Board (IRB) and increases the use of single-member panels

·                    Improves the front-end security screening of refugee claimants upon arrival in Canada;

·                    Provides additional resources to speed up removals;

·                    Develops a new Permanent Resident Card that will help to reduce fraud.

·                    Front-end security screening of refugee claimants as soon as they make a claim;

·                    Exclusion of serious criminals, security risks, or violators of human rights from the refugee determination process;

·                    Strengthening inadmissibility criteria to ensure that serious criminals, security risks and violators of human rights cannot enter Canada; and

·                    Establishing new offences and stiffer penalties for human traffickers and people smuggling.

It seems likely that the case of Ahmed Ressam might have provoked the Canadian government to address these issues.  However, it is interesting to note that other features of the new bill will in fact open up immigration to Canada in a number of ways.  For example, 'family class' has been extended to allow children under 22 to immigrate compared to the old standard of children under 19.  Same- sex and common law couples would be considered under 'family class' and the $925 'fee for landing' would no longer be applicable to refugees.

One might argue that these more liberal aspects of the bill have been used to differentiate Canadian immigration policies from American policies and defy the pressure by American authorities in making Canadian policies reflect and comply with the United States.  These measures give Canada more leverage in continuing to define itself internationally as a country with strong 'humanitarian' roots.



Conclusion

Although identification fraud is an important problem, it should not distract us from concentrating on the main crimes that are being hidden by it or committed by using it. It would not be useful to start thinking about identification fraud as a new ‘security threat’. The use of identification fraud by organized crime and the commercialization and production of stolen or false identification documents by these groups should be of great concern for every country. However, given the fact that there is a level of uncertainty in terms of the extent of the ‘threat’ (quantity and quality) and its implications, due mainly to the lack of information from official sources, great caution should be exercise in determining governmental action to counter the problem. This should be taken into account when proposing new legislation with harsher penalties, because this could only make the identification fraud market even more profitable.

Our research shows that there is not enough public information coming from official sources to allow the public to assess the problem of identity fraud. Some of the governmental officials we approached in our research were keen in stress the necessity to maintain this information in secrecy, for this is part of intelligence gathering efforts. This governmental and law enforcement mentality is the same one that is governing all information related to organized crime. A consequence of this is that there is never open debate. In some cases a distorted (or unchallenged) view of the severity of a criminal activity can be used to formulate policies that perhaps would not be endorsed by the public if the real nature and extent of the problems were within the public domain.

The use of false and stolen identification documents is a serious problem that affects our countries in different ways, with diverse implications. Canada, Australia and the US are specifically concerned with the apparent widespread use of false document for illegal immigration purposes. In addition, the US is particularly concerned about the use of this type of fraud for terrorist ends. However, even though there is a common use of false identification by organized criminals in the drug producing countries like Colombia, this does not prevent the authorities from arresting them. In countries such as Venezuela the use of false documents serves other purposes, which are not necessarily linked to criminal activities.

We are worried that by saying that identity fraud is inevitably linked to transnational organized crime, we would be distorting wider immigration policies, that in essence deal more with humanitarian issues than with criminal ones. The danger is that we could be creating a ‘threat’ (false or exaggerated) and end up criminalizing and demonizing people (illegal immigrants) who have no other criminal involvement.

In terms of the production and distribution of illegal documentation, we can be certain –judging from what has happened in other illegal markets such as the drug market— that the higher the penalties and fines, the more sophisticated and elaborate this illegal business will become. The Canadian response to illegal migration has certainly taken this route by presenting Bill C-31, which imposes severe penalties for illegal migrants and organized criminals involved in the trafficking of humans. This affects directly the illegal market of fraudulent documentation in the sense that prices will go up when the Bill passes and comes into force.

Ultimately, production centers for these commodities will become more sophisticated and difficult to detect.  If as it is we are not able to stop the use of, and market in, illegal documentation, how will we be able to respond to an illegal market that has become even more sophisticated? It might be advisable to search for alternatives that would enhance law enforcement capabilities to counter the problem of illegal documentation. However, this is hardly attainable by using the enactment of new laws with stronger penalties to deter criminal activity. Policies related to illegal migration must include comprehensive measures that are not exclusively related to the enactment of new laws but rather focus on the enhancement of cooperation among the affected countries’ law enforcement agencies.

v

INTERNAL AUDIT CAN catch the fraud?

Perhaps this question would be quite impossible, if fraud was created by the company management. Meanwhile, one of the objectives of internal audit is precisely to find irregularities, whether as a result of an intentional misstatement (fraud) or not. Yet according to the report "2002 Report to the Nation on Occupatinal Fraud and Abuses" states that the internal audit activity can suppress 35% of the occurrence of fraud.
Answer the questions above will be even more difficult to find, even if the top management plays an active role by designing an internal audit tasks diperusahaannya be a task that is "merely" to assess the performance of a part, instead of working to meet the internal control function. Thus, the management intends to make fraud be untouched by the internal audit, and even become impossible to find.
Typically, in addition to designing for internal audit activities to be paralyzed, the massive fraud carried out through the double trick of making the financial statements. The financial statements that have been manipulated, specially prepared for consumption by the auditors, while the actual report - the report truly describe the actual conditions of financial companies - is only distributed to the exclusive environment of top management.
Massive Fraud at Phar Mor Inc..
History records the case of Phar Mor Inc.. as a fraud case that had a legend among the financial auditor. Executives at Phar Mor deliberate fraud to gain financial benefits that go into the private pockets of individuals in the top ranks of corporate management.
Phar Mor Inc., including the largest retail company in the United States declared bangkrupt in August 1992 based on U.S. legislation Bangkruptcy Code.
At the height of its power, Phar Mor has 300 outlets in almost all major states and employs 23.000 employees. The products sold vary widely, from medicines, furniture, electronics, apparel sports to the videotape. In doing fraud, Phar Mor top management to create 2 duplicate reports. The inventory report, whereas other reports is the monthly financial reports (monthly financial report). A set of inventory reports contain a true inventory reports (true report), while a set of other reports containing information about the inventory adjustment and is intended for the auditor's use only.
Likewise, the monthly financial reports, financial statements which is true - contains about the losses suffered by the company, is intended only for the executive ranks. Another report is a report that has been manipulated so as if corporate profits are plentiful.
In preparing these reports, management Phar Mor deliberately recruited staff from Public Accounting Firm (KAP) Cooper & Lybrand. Staff which is then promoted to Vice President of Financial and controllers, who were later proved actively involved in the fraud.
In the case of Phar Mor, one of the requirements of internal audit in order to function, the function of the control environment were muzzled. Control environment is largely determined by attituted of management. Ideally, management should fully support the internal audit activity and declare it's support all of the ranks of the company's operations. Top management Phar Mor, did not show a good attitude. Management then recruited staff auditors instead of KAP Cooper & Librand to participate in the fraud played. This step is not without careful planning. Former staff auditor and was promoted to occupy an important position, but in return have to make multiple financial reports.
Phar Mor management so far has proved the theory: The Fraud Triangle. That is the theory that explains the causes of fraud occurs. According to this theory, the causes of fraud occurs due to three things: incentive / Pressure, Opportunity and Rationalization / Attitude.
Incentive / Pressure is when management or employee incentive or just getting under pressure (presure) so that they "commited" to conduct fraud. Opportunity is the possibility of fraud due to weak or no control efektivenya thus opening the possibility of fraud. While Rationalization / Attitude describes the theory that fraud occurred because the condition of local ethical values ​​that allow the occurrence of fraud.
In the case of Phar Mor, at least, top management has proved one of the three constituent triangle, namely: top management has incentives / Pressure.
Underlying Case L / C at BNI
Case of fraud at BNI that caused state losses of Rp. 1.7 trillion, interesting to study.
This case actually revealed by the Head of International Division suspicion of irregularities procedure L / C BNI Kebayoran Baru branch.
Based on the Report of the International Division which was released on August 7, 2003, then Director of BNI lower the special audit team to explore this case. The result, a special audit team's report released in early September 2003 to prove the truth of burglary state funds amounting to Rp. 1.7 trillion.
The fundamental question is: why the internal audit team can not catch this fraud? So the reports of fraud-release it on the head of the International Division of suspicion over the deviation procedures of L / C at BNI Kebayoran Baru branch? whether at the time of internal audit activity is paralyzed by unscrupulous management BNI Kebayoran Baru branch? Or unscrupulous management BNI Kebayoran Baru branch have designed the reports and activities that are not touched by the internal audit activity?
BNI leaders might have done a thorough evaluation of the failure of internal audit in uncovering fraud. But if the fraud had indeed been designed by unscrupulous management in BNI Kebayoran Baru branch, then one of the top management task of BNI is to create a control environment so that the internal audit activity can be run according to its function as an internal control.
Top management needs to declare its full support for the internal audit activity throughout the ranks of the environmental department at BNI. After that just re-arrange the auditor's integrity and morale officer, so that the internal audit function can function properly.

Fraud 101: Techniques and Strategies for Understanding Fraud (Click the picture)

A straightforward guide explaining the nature of financial fraud

Fraud continues to be one of the fastest growing and most costly crimes in the United States and around the world. The more an organization can learn about fraud in general and the potential fraud risks that threaten the financial stability of the organization's cash flow, the better that organization will be equipped to design and implement measures to prevent schemes from occurring in the first place.

Fraud 101, Third Edition serves as an enlightening tool for you, whether you are a business owner or manager, an accountant, auditor or college student who needs to learn about the nature of fraud. In this invaluable guide, you will discover and better understand the inner workings of numerous financial schemes and internal controls to increase your awareness and possibly prevent fraud from destroying your organization's financial stability.

It offers guidance, understanding, and new, real-world case studies on the major types of fraud, including

An understanding of why fraud is committed
An overview of financial fraud schemes
White-collar crime
Uncovering employee embezzlements
Establishing internal fraud controls
The nature of collecting evidence

With case studies included throughout the book to gain insight to the real world of fraud, Fraud 101, Third Edition describes the features of fraud and then provides proven methods of prevention, as well as solutions to expose different types of fraud.
From the Inside Flap
If an employee brings home some office supplies for their kids to use with their school projects, is that fraud? How about when an employee charges personal items on the company's credit cards, receives vendor kickbacks, or inflates travel expenses? Instances of fraud occur every day and either go undetected, or are not deemed newsworthy enough to bring any attention to the matter. In fact, instances like these may be occurring right now in your organization—how will you know what to look for? And how can you stop it from taking place again?

Now fully revised, Fraud 101, Third Edition explains fraud in a practical, easily understood manner, serving as an enlightening tool for you, whether you are a business owner or manager, an accountant, or an auditor. A valuable introduction for dealing with fraud—from preventing and detecting it to investigating it, Fraud 101, Third Edition provides insightful advice on the inner workings of numerous financial schemes and the internal controls that will increase your awareness and possibly prevent fraud from destroying your organization's financial stability.

Offering guidance, understanding and new, real-world case studies on the major types of fraud, this new edition explores:

Why fraud is committed

An overview of financial fraud schemes

White-collar crime

Employee embezzlements

Internal fraud controls

The nature of collecting evidence

Investigative issues, including alternatives for resolving fraud-related matters

How to perform an effective investigation

Sample investigation procedures for the major fraud categories

Regardless of why an individual perpetrates a fraud, the end result is usually the same: a substantial financial loss to the organization, often involving a significant amount of money that may never be recovered. Fraud 101, Third Edition will show you how fraud schemes are perpetrated, detected, and investigated, with practical advice on how to notice and prevent fraudulent activity, minimizing the loss experienced by your organization.

Highly readable and accessible, this timely book provides you with the methods and tips you need to readily recognize and investigate financial fraud and combat fraud in your organization.
From the Back Cover
Praise for Fraud 101 Third Edition

"With this new edition of Fraud 101, I am amazed at how much information Stephen delivers in such a concise and succinct manner. His descriptions are detailed, but easy to understand, and the case examples really help illustrate the schemes. This is an excellent reference book for anyone in the fraud prevention field, whether they are a seasoned veteran or just starting out."
—John D. Gill, JD, CFE Research Director, Association of Certified Fraud Examiners

"Awesome! Sit at the head of the class—read Fraud 101 and get an A+ in understanding fraud. This book takes the reader from the classroom to the real world with its insightful case studies and practical techniques. A must-read for accountants, other professionals, business owners, and students of fraud."
—Thomas Scanlon, CPA, CFP®President, Borgida & Company, PC, CPAs

"The author clearly demonstrates his mastery of the subject matter in this well-written, easy-to-read, comprehensive guide to understanding fraud. The case studies provide insight into the definition of fraud, the different types of fraud, the perpetrator's rationale and a practical approach to investigation and prevention. The ever evolving nature of this relevant subject matter makes this book a must-read for anyone interested in learning about fraud and its wide-reaching effects."
—Jeffrey Rossi, CPA, CVA, CFEPartner, J.H. Cohn, LLP

"This book is very readable and loaded with examples from the author's rich experience in forensic accounting services. The discussions of the types of fraud and the pitfalls to watch for were very practical guidance for accountants and business people in general."
—Lawrence J. Gramling, PhD, CPA Assistant Department Head, Department of Accounting, University of Connecticut

Root out fraud before it happens with the hands-on approach found in Fraud 101, Third Edition

The more your organization can learn about fraud and the potential risks that can threaten its financial stability, the better you will be equipped to prevent schemes from occurring in the first place. The only primer you need to fully understand financial fraud, Fraud 101, Third Edition expertly arms you with the tools to eliminate future frauds and reduce fraud losses.

Fraud: Essays [click the picture]

From This American Life alum David Rakoff comes a hilarious collection that single-handedly raises self-deprecation to an art form. Whether impersonating Sigmund Freud in a department store window during the holidays, climbing an icy mountain in cheap loafers, or learning primitive survival skills in the wilds of New Jersey, Rakoff clearly demonstrates how he doesn’t belong–nor does he try to. In his debut collection of essays, Rakoff uses his razor-sharp wit and snarky humor to deliver a barrage of damaging blows that, more often than not, land squarely on his own jaw–hilariously satirizing the writer, not the subject. Joining the wry and the heartfelt, Fraud offers an object lesson in not taking life, or ourselves, too seriously.
Amazon.com Review
Let's get this out of the way: David Rakoff is not David Sedaris. When you hear him being incredibly smart and funny on This American Life, you invariably think, "Oh, it's David Sedaris." But if you listen closely, you can tell the difference. Rakoff, while no less witty or nasal, is a little more disappointed. In his first collection--a series of pieces for public radio and for various magazines--he positively revels in his world-weariness. Whether he's investigating the Loch Ness monster, attending a comedy festival in Aspen, Colorado, visiting a New Age retreat hosted by Steven Seagal, or just, you know, playing Freud in a department-store window at Christmastime, Rakoff tends to get comically depleted. Watching the comic Dan Castellaneta, for example, he writes, "It's a bad sign when I start counting the unused props on stage. Only two wigs, one stool, an easel, and a dropcloth to go. I begin to pray to an unfeeling God to please make Castellaneta multitask." In a piece where he attempts to climb a mountain (well... a very short hill), Rakoff immediately nips any Sierra Club fantasies in the bud: "I do not go outdoors. Not more than I have to. As far as I'm concerned, the whole point of living in New York City is indoors. You want greenery? Order the spinach." But in the end, what makes him such a terrific writer is that he's not only onto everyone else, he's onto himself. No wonder his visit to a kibbutz becomes the occasion for some supremely self-conscious amusement: "I know I sound like the Central Casting New Yorker I've turned myself into with single-minded determination when I say this, but the main problem with working in the fields is that the sun is just always shining." --Claire Dederer --This text refers to the Hardcover edition.
From Publishers Weekly
A talented new humorist springs onto the scene: Rakoff has a rapier wit, slashing in all directions with slice-of-life insights and cutting remarks, sometimes nicking himself with self-deprecation in his dexterous duello with the American experience. Rakoff is a public radio personality, and his first collection contains his material from public radio's This American Life and from Outside and Salon, as well as a few new pieces. Assigned to visit a New Age retreat for a Buddhism workshop led by Steven Seagal, to look for elves in Iceland, to attend the Aspen Comedy Festival and to train at a wilderness survival camp, Rakoff endures urban dweller misadventures with a spin that occasionally remind one of Fran Lebowitz, such as during his hike up a New Hampshire mountain: "If only the mist would part to reveal a beautiful, beautiful parking lot, I will get through this." Outstanding is "Lush Life," a look at the delusions and despair of low-paid NYC editorial assistants, "complicit believers in the mythic glamour of a literary New York" yet forced to subsist on "salmonella-friendly" free snacks in "unhappening bars" where they can avoid former classmates with six-figure incomes. Rakoff can be as funny as Dave Barry or George Carlin, but he adds a touch of pathos, peeling away poignant layers unexplored by other humor writers. The author's woodcut illustrations are barely adequate, since the book cries out for Ralph Steadman art. The book cries out, period. (May 15)Forecast: With national print advertising and a national author tour in the offing, plus his radio exposure, Rakoff will quickly find his readership and they him. The crude pink marker scrawl of the title will make the book an eye-catching item in store displays.