The document discusses the topic of frauds and scams, as presented by a group of students. It begins with definitions of fraud and characteristics of fraudsters. It then outlines recent internet scam trends, findings from an Indian fraud survey, and fraud prevention measures suggested by the Reserve Bank of India. The effects of fraud on the economy are also examined. A major section discusses the multi-billion dollar 2G spectrum scam in India, including involved parties from government, corporations, and media. The chronology of events and investigations are summarized. Suggestions for preventing future scams are provided at the end.

1. N. G. ACHARYA & D. K. MARATHE
COLLEGE
SUB: HRM IN BANKING & INSURANCE
CLASS: T.Y. BANKING & INSURANCE
TOPIC: FRAUDS AND SCAMS
UNDER GUIDANCE: SATINDER GUJRAL

2. GROUP MEMBERS
 POOJA. POOJARI 27
 SHWETA. DALVI 07
 PRIYANKA. SAWANT 37
 VEENA. MOOLYA 17
 SANDHYA. TAMBE 47

3. SR. NO. TOPIC
1. Meaning of Fraud?
2. Characteristics of Fraudsters
3. Recent Trends In Internet Scams
4. Survey Report
5. Fraud Preventive Measures Suggested By RBI
6. Effects of Frauds and Scams on Economy
7. Guidance and Corrective Actions
8. Fraud Prevention Measures
9. 2G Scam
10. Suggestions
INDEX

4.  Meaning:
In criminal law, a fraud is an intentional deception made
for personal gain or to damage another individual. The
specific legal definition varies by legal jurisdiction. Fraud is a
crime, and also a civil law violation. Defrauding people or
entities of money or valuables is a common purpose of
fraud.

5. CHARACTERISTICS OF FRAUDSTER:
 General characteristics of those who commit occupational fraud
are listed as under:
 Male
 Intelligent
 Egotistical
 Inquisitive & Risk taker
 Rule breaker
 Greedy & Financial need
 Big spender
 Pressured to perform

6. THE RECENT TRENDS IN SCAMS:
 Stolen credit cards
 Purchase scams
 Online automotive fraud
 Call tag scam
 Business opportunity / work at home schemes
 Stock market manipulation schemes
 Money Transfer Fraud

7. THE INDIAN FRAUD SURVEY REPORT 2011
 Over 80 percent of the respondents identified fraud
as a serious problem in India, which demolishing
the Indian economy.
 Respondents also defined sales and distribution
are the most easy way to yet in the fraud scams.
 38 percent of the respondents thought by way of
offering bribe they expand their business practices
in India.
 Most of the respondents also believe that
computers and technology related scam will be a
major area of concern in the coming future.

8. FRAUD PREVENTIVE MEASURES SUGGESTED BY RBI:
 RBI always help by issuing the guidelines in regards to “KYC”
policies practices.
 In recent year the procedure has been developed to stop money
laundering at international level whereas in Indian these has used
to stop laundering processes.
 With the help of anti-money laundering law and their
recommendations it gets easy to stop laundering processes.
 Smooth working of these measures their should be a proper follow
up of legal provisions.
 The law of “anti money laundering helps to safe the banks from
being used up in the money laundering.
 KYC helps the banks to know their customers and their financials
risks which helps them to take a major decision

9. EFFECTS OF FRAUDS & SCAMS IN THE ECONOMY:
The impact of frauds & scams is multifold, encompassing
political cost, economic cost, social cost, environmental
cost & issues of national security.
 Political cost
 Economic cost
 Social cost
 Environmental costs
 Issues of national security

10. GUIDANCE AND CORRECTIVE ACTIONS
Effective internal control mechanisms and accountability
are required to combat the increasing number of financial
system. Suggested measures are:
1) SEBI should call for special, unexpected audit checks on
companies.
2) The Institute of Chartered Accountants on India and the
investigating officials in the legal system should initiate proper
action against all those who are found guilty of financial
frauds.
3) The role of independent directors should be established.
4) The Ministry of Finance should make it mandatory for the
companies to publish their balance sheets and probe all relevant
details of the independent directors every quarter.

11. FRAUD PREVENTION MEASURES
There are two approaches to help eliminate white-collar
crime: prevention and detection. We believe the best approach is to
prevent illegal and inappropriate acts from occurring in the first
place.
The following procedures should be instituted to help reduce
the risk of impropriety in your organization:
 Identify assets for which you have responsibility
 Identify the risks associated with safeguarding these assets
 Establish a positive control environment in your department
 Ensure that an adequate system of internal control exists in your
organization

12. 2G SCAM

13. 2G SCAM:
The 2G spectrum scandal involved officials in the
government of India illegally undercharging mobile telephony
companies for frequency allocation licenses, which they would
use to create 2G subscriptions for cell phones. The law
mandated to be collected is estimated to be 176,645 crore .
Much of the credit of bringing this whole scam into the
public light goes to Subramanian Swamy who is the chief
petitioner for this case in the court of law.

15.  Parties accused of involvement:
The selling of the licenses brought attention to three
groups of entities – politicians and bureaucrats, corporations
and media professionals.
 Politicians involved:
 A. Raja
 M. K. Kanimozhi
 P. Chidambaram
 Bureaucrats involved:
 Siddharth Behura
 RK Chandolia

16.  Corporate Executives involved:
 Gautam Doshi – Managing Director of Reliance Anil
Dhirubhai Ambani Group
 Surendra Pipara – senior vice- President of Anil Dhirubhai
Ambani Group and Reliance Telecom
 Hari Nair – senior vice-president of Anil Dhirubhai Ambani
Group
 Film and Entertainment persons involved:
 Karim Morani – Cineyug Media and Entertainment Ltd’s
Director

17.  Corporations accused:
 Unitech Group a real estate company entering the
telecom industry with its 2G bid; sold 60 per cent of its
company stake at huge profit to Telenor after buying
licensing
 Loop Mobile
 Videocon Telecommunications Limited
 Reliance Communications

18.  Media persons accused:
Nira Radia

19. BARKHA DUTT

20. VIR SANGHVI

21.  Shortfall of money:
A. Raja arranged the sale of the 2G spectrum licenses
below their market value. Soon the telecom company started
facing the problem of shortage of money. So they started
selling their license & earned a huge amount of profit. But later
it was to be found that these profits were earned by selling
those license below market value.

22.  Relationship between media and government:
Media sources such as OPEN and Outlook reported that
Barkha Dutt and Vir Sanghvi knew that corporate lobbyist Nira
Radia was influencing the decisions of A. Raja. The critics
alleged that Dutt and Sanghvi knew about corruption between
the government and the media industry, supported this corrupt
activity, and suppressed news reporting the discovery of the
corruption.
 Ratan Tata petitions over leak:
The tapes leaked to the public include conversations
between Nira Radia and Ratan Tata. Tata petitioned the
government to acknowledge his right to privacy and demanded
accountability for the leak, with the Minister for Home Affairs,
CBI, Indian Income Tax Department, the Department of
Telecommunication, and the Department of Information
Technology as respondents in the petition.

23. CHRONOLOGY OF EVENTS AND INVESTIGATION:
 In the year 2008: Swan telecom, Unitech & Teleservices
sell their stakes to Telenor & Docomo.
 May 4,2009: telephonic conversations between A. Raja &
Nira Radia made public by the media.
 Nov 14,2010:A Raja resigns as Telecom Minister.
 Feb 17,2011:Raja sent to Tihar jail.
 Feb 18,2011:Balwa sent to judicial custody.
 Sep 15,2011:Swamy pleads before CBI that P
Chidambaram should be made co-accused.
 Oct 9,2011:Swamy plea for a probe into Home Minister
Chidambaram’s role in the 2G scam.

24. RESPONSE TO SCAM:
 In early November 2010 Jayalalitha accused the state chief
minister M Karunanidhi of protecting A. Raja from
corruption charges and called for A. Raja's resignation. By
mid November A. Raja resigned. In mid November the
comptroller Vinod Raiissued show-cause notices to
Unitech, S Tel, Loop Mobile, Datacom (Videocon), and
Etisalat to respond to his assertion that all of the 85
licenses granted to these companies did not have the up-
front capital required at the time of the application and
were in other ways illegal.

25. SUGGESTIONS:
 The following are some of the suggestions that
should be adopted:
 A sound ethics policy & code of conduct.
 A well defined policy.
 Periodic fraud risks assessments.
 A good internal audit function.
 A pre-employment screening.

26. THANK
YOU