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NRI arrested for £ 70m heist attempt on HSBC bank
Natteri Adigal
03 May 2008, Saturday
AT AN HSBC bank in London, a smart youngster named Jagmeet Channa would have become a multi-billionaire (in rupee) this week! The dream target of the boy, employed at the bank, was foiled by an alarm raised by the control system. It had smelt something fishy when a transaction was being settled electronically.
Channa, 25, from Ilford in Essex is of Indian-origin. He is suspected to be an accomplice of a gang that attempted a big swindle of the bank. Three more members of the alleged gang - aged 26, 33 and 38 - are in police custody in connection with the investigation. Had they emerged successful with the white collar heist, they would have been rich to the tune of about £ 70million (rupees 560 crore) among themselves.
HSBCs securities services division, which settles trades for clients, in its head office building at Canary Wharf, detected the ingenious attempt when it was handling a payment to a certain bank. The police were called in to investigate. London police charged Jagmeet Channa on April 25 with conspiracy to defraud, money-launder and an abuse to a position of trust. He is to be in their custody till June 25 untill he appear for the hearing at Southwark Crown Court.
Rogue traders managing to lose colossal funds of High Street banks through their own investment activities is not new. The French bank societe generale recently misplaced almost 5 billion Euro in an alleged fraud by a trader. Jerome Kerviel, French trader, was charged in January 2008 of causing a record trading loss to SocGen, which characterised the 31-year-old as a rogue trader. The bank claimed that Kerviel, a computer genius, executed these trades alone and without its authorisation. Kerviel has stated that such practices are widespread and the hierarchy turns a blind eye for the sake of maximising the profits.
Significantly, Jagmeet was not a trader but just an employee at the banks back office. Banks in Britain have lost an estimated 330 million pound sterlings in 2007 in card fraud. Thus, the single big deal the team attempted would have netted 20 per cent of the total annual expenditure towards fraud.
A spokesman of the bank stated, HSBC is cooperating fully with a police investigation into an alleged fraud at the bank. As the matter is before courts we cannot comment further. No customer or bank funds and transactions were disrupted or lost in the alleged fraud.
According to the Association for Payment Clearing Services (APACS), tackling internet fraud will require closer cross industry co-operation. It says there is no one size fits all approach to dealing with fraud and argues that organisations should be able to share data much freely in order to tackle scams effectively.
Sandra Quinn, director of communications, HSBC London, declared, "Fighting fraud is never going to succeed with a single-layered approach. It requires different sectors - including public and private to work together on developing and implementing strategies, sharing best practice and, most importantly, sharing data.
The association has noted that fraudsters are turning their hands towards creating counterfeit magnetic strip cards that can be used to get cash advances in countries that havent upgraded to chip and Personal Identification Number (PIN).
In England, compulsory introduction of chip and PIN for over-the-counter transactions has had a hugely positive effect on fraud losses.
Hopefully, the Reserve Bank of India (RBI) and Indian Banks Association (IBA) will be in a position to set up a reliable firewall to guard against potential Jagmeets within the country on time, if they have not done so!
Natteri Adigal
03 May 2008, Saturday
AT AN HSBC bank in London, a smart youngster named Jagmeet Channa would have become a multi-billionaire (in rupee) this week! The dream target of the boy, employed at the bank, was foiled by an alarm raised by the control system. It had smelt something fishy when a transaction was being settled electronically.
Channa, 25, from Ilford in Essex is of Indian-origin. He is suspected to be an accomplice of a gang that attempted a big swindle of the bank. Three more members of the alleged gang - aged 26, 33 and 38 - are in police custody in connection with the investigation. Had they emerged successful with the white collar heist, they would have been rich to the tune of about £ 70million (rupees 560 crore) among themselves.
HSBCs securities services division, which settles trades for clients, in its head office building at Canary Wharf, detected the ingenious attempt when it was handling a payment to a certain bank. The police were called in to investigate. London police charged Jagmeet Channa on April 25 with conspiracy to defraud, money-launder and an abuse to a position of trust. He is to be in their custody till June 25 untill he appear for the hearing at Southwark Crown Court.
Rogue traders managing to lose colossal funds of High Street banks through their own investment activities is not new. The French bank societe generale recently misplaced almost 5 billion Euro in an alleged fraud by a trader. Jerome Kerviel, French trader, was charged in January 2008 of causing a record trading loss to SocGen, which characterised the 31-year-old as a rogue trader. The bank claimed that Kerviel, a computer genius, executed these trades alone and without its authorisation. Kerviel has stated that such practices are widespread and the hierarchy turns a blind eye for the sake of maximising the profits.
Significantly, Jagmeet was not a trader but just an employee at the banks back office. Banks in Britain have lost an estimated 330 million pound sterlings in 2007 in card fraud. Thus, the single big deal the team attempted would have netted 20 per cent of the total annual expenditure towards fraud.
A spokesman of the bank stated, HSBC is cooperating fully with a police investigation into an alleged fraud at the bank. As the matter is before courts we cannot comment further. No customer or bank funds and transactions were disrupted or lost in the alleged fraud.
According to the Association for Payment Clearing Services (APACS), tackling internet fraud will require closer cross industry co-operation. It says there is no one size fits all approach to dealing with fraud and argues that organisations should be able to share data much freely in order to tackle scams effectively.
Sandra Quinn, director of communications, HSBC London, declared, "Fighting fraud is never going to succeed with a single-layered approach. It requires different sectors - including public and private to work together on developing and implementing strategies, sharing best practice and, most importantly, sharing data.
The association has noted that fraudsters are turning their hands towards creating counterfeit magnetic strip cards that can be used to get cash advances in countries that havent upgraded to chip and Personal Identification Number (PIN).
In England, compulsory introduction of chip and PIN for over-the-counter transactions has had a hugely positive effect on fraud losses.
Hopefully, the Reserve Bank of India (RBI) and Indian Banks Association (IBA) will be in a position to set up a reliable firewall to guard against potential Jagmeets within the country on time, if they have not done so!
