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RKN Global on Corporate Corruption: The Role of the Individual

The investigative reporting that exposed the alleged widespread corruption scheme perpetrated by the private, Monaco-based firm Unaoil was based on a trove of emails that had been obtained by reporters.  The emails revealed a scheme by which Unaoil performed its function as a middleman between multinational corporations and state governments of oil producing countries by bribing government officials and officers of oil companies in those countries.

This past week, a former employee of Unaoil has come forward to detail how he personally participated in one such bribe in Libya.

RKN Global’s founder, Ronald K. Noble, stresses that every corrupt or criminal scheme rests on the actions of individuals.  Even a large and wide-reaching scheme of bribery or corruption is often built upon numerous, small corrupt transactions and bribes.

The former Unaoil employee underscores this phenomenon with his reports.  The former executive, Lindsey Mitchell, is cooperating with agents from the U.S. Federal Bureau of Investigation and the U.K.’s Serious Fraud Office.

Before he began working for Unaoil in 2009, Mitchell had been CEO of Western Energy Services Corp, a public Canadian energy company.   Shortly after he came onboard with Unaoil, he was asked to unduly influence Libyan officials under the regime of Moammar Gaddafi in order to get them to approve contracts for Unaoil’s customers.

One of those officials told Mitchell that he and other officials could help Unaoil’s customers get contracts.  He provided Mitchell with secret tender documents relating to multi-million dollar government contracts.  Mitchell relayed to his bosses at Unaoil that the official would want to get paid, and he was provided with an envelope to provide the officials containing between fifteen and twenty thousand US dollars.  Around midnight, he went to the official’s home to deliver the bribe.

Mitchell claims that while he was familiar with other instances of corruption and bribery, that incident was the only one where he personally delivered the bribe.

He resigned a few days later, having suffered from feelings of guilt for his participation in the corruption.

Ronald K. Noble and RKN Global recommend that employees that find themselves in an organization with a culture of corruption take efforts to resist the temptation to follow the crowd, and avail themselves of their company’s ethics hotline, or if necessary, the authorities.  One small compromise with corruption often leads to progressively larger moral and legal violations.

Lindsay Mitchell’s story illustrates how easy it is for an otherwise upstanding individual to get pulled into a company’s culture of corruption and bribery. Employees everywhere should take note, so they do not surrender their integrity to corruption by another’s greed.

RKN Global on Fake IDs: Sophisticated Counterfeiters Require a Sophisticated Response

The United States 9/11 Commission Report alerted the world to the truth that “for terrorists, travel documents are as important as weapons.”  The same holds true for criminals of all types:  The ability to move and cross borders without being flagged or identified is extremely important for criminal enterprises.   It is therefore no surprise that fake identity documents, including fake passports, are common.

A lot of attention has been focused on the value of many European passports because these passports can be used to gain free and unfettered access to the many European countries that are parties to the Schengen agreement.

Ronald K. Noble, RKN Global founder, has called attention to the danger that the Schengen open-border arrangement poses to the people of Europe, unless a uniformly secure protocol is established at all of the borders and access points to the region.

Yet criminals and terrorists use counterfeit or fraudulently altered passports from other countries as well. The arrest this week of a 22-year-old in Washington State in the United States for possession of counterfeit passport cards shows that any country’s documents can be targeted by criminals.

Officers arrested the suspect after receiving a call reporting that he was trying to purchase a cell phone under a fake name.  The officers found on the suspect seven high quality fake U.S. passport cards with his photo, all of them under different names.  He also had seven ATM cards which matched the names on the fake passport cards.

While reports didn’t indicate why the suspect raised questions in the mind of the store’s employee, the authorities related that the fake passport cards were of a very high quality.  It is likely, then, that something in the suspect’s behavior put the employee on alert.

U.S. passport cards are an alternative to a U.S. passport.  They prove U.S. citizenship and identity, and can be used to re-enter the U.S. from Canada, Mexico, the Caribbean and Bermuda.

RKN Global and Ronald K. Noble note the utility of a passport card in furtherance of smuggling operations or other criminal activity across the borders with Canada or Mexico.

The sophistication necessary to produce realistic looking United States passport cards is very high, which indicates that these cards were intended for high-stakes criminal use.  The cellphone retailer in this case is to be commended for his attention and watchfulness to the behavior of his customers.  Authorities are urged to do the same, and to screen identity documents at every border crossing with the most sophisticated technologies available.

RKN Global: A Taxing Problem: Identity Fraud Linked to Tax Returns

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The U.S. Internal Revenue Service (IRS) recently published a report covering the first several months of its activities in 2016.  According to the report, 42,148 tax returns had been identified by the IRS as fraudulent, claiming $227 million in refunds.  Of these, the IRS was able to detect the fraud 79.6% of the time before it issued a refund to the wrong party.  Nevertheless, millions of fraudulent tax returns were filed, accepted, and the subject of refunds from the IRS.  The bill gets picked up by the IRS, which is to say, the American public.

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RKN Global’s Founder, Ronald Noble, used to provide policy oversight to the IRS’s Criminal Investigation Division.  He recognizes the very serious financial and human price of tax related fraud.  Tax fraud is a form of identity theft and identity fraud that takes a very serious toll on real people.

Tax fraud is a form of identity theft and identity fraud that takes a very serious toll on real people; Kinsey Simpson was one such victim.  She comes from a poor family; her mother, who is unemployed, describes how the family “couch hops from place to place.”  Kinsey, who received an almost-complete university scholarship, had to work during the school year in order to make the remaining school payments and pay for food.   When she filed the first tax return of her life in 2014, she was excited about the prospect of getting her expected refund.

The refund did not come, however.  The IRS rejected her electronically-filed return because someone else had already filed a tax return in her name—that year and for the previous three years.  Someone had obtained her social security number—the only private information needed to file a tax return and get a refund—and received fraudulent refunds in her name.

Her identity was stolen and she was blocked from getting her much-needed refund until she could prove her identity and sort the issue out, a process which can take a year.

Real people, often in difficult and stressful life circumstances, are the victims of identity theft, including tax-related identity fraud.

Many victims discover they have been victimized by tax identity fraud when they file a tax return and receive a notice from the IRS stating that they have already filed.

Others discover they have been victims of another type of tax related fraud when someone uses their social security number to get a job.  The fraudster’s employer reports the income to the IRS, which finds a mismatch with the reported income on the victim’s tax return, and sends the victim a notice stating that the victim did not report all of his or her income.  The victim then has to report the fraud and go through the stressful process of clearing his or her name.

Ronald K. Noble and RKN Global have created important products to help people safeguard their identities, including a Cyber Identity Card (CIC) which allows someone to prove his or her identity online and in the real world with the reliability of a government ID.

As the CIC becomes accepted by more governments, Noble expects that it could be used to prevent tax related identity fraud by providing a reliable verification of a taxpayer’s identity that would rebut the claim of a thief who has stolen his or her social security number, leading to a much faster resolution of the facts and delivery of a tax refund to the right person.