Stay Informed: Top 4 Fraud Schemes to Watch for in 2023

What are the prominent scams we’re encountering in 2023? As an investigative agency, we monitor the spectrum of fraudulent activities that clients bring to our attention. Over the years 2021 and 2022, we observed a substantial occurrence of schemes such as cryptocurrency or blockchain-related frauds and deceptive investment offers promising high returns. The perpetrators would present an enticing proposition—promising to double invested funds within a month. This bears similarity to a swindle likened to pig butchering. The landscape shifts somewhat in 2023, introducing a subtle change.

Family Law Fraud

One emerging trend that has gained momentum over the last three to four years is the proliferation of family law case frauds. This pertains to instances of deception revolving around family-related legal matters, particularly divorce and probate scams. Whenever a family event occurs, be it a demise or a divorce, even scenarios involving child support or hospice care, opportunists seize the moment to extract a larger portion of the estate unfairly. Upon an individual’s passing, their assets—including bank accounts, real estate holdings, business equities, vehicles, and even smaller assets like jewelry—come into focus. Often, these possessions are intended to pass on to rightful heirs or family members, contingent upon specific wishes indicated in documents like wills or probate records.

Nevertheless, situations unfold wherein certain members of the family deem themselves deserving of more than their due or simply covet a larger share of the assets. They operate under the belief that their actions will remain undiscovered. However, these individuals possess privileged access that enables them to write checks from bank accounts, surreptitiously transfer real estate holdings, or claim ownership of vehicles concealed in garages or barns—all before detection. Manipulative tactics extend to altering beneficiaries on life insurance policies. In the context of divorces, parties resort to concealing bank accounts and real estate, even transferring funds into third-party accounts to obfuscate matters from their partners.

Such malevolent practices constitute family law, probate, and divorce fraud, manifesting as commonplace occurrences. We routinely encounter these deceptions when commissioned to locate concealed assets. In cases where suspicions of fraudulent conveyances or transfers arise, they are seldom unfounded; more often than not, clients’ concerns align with underlying realities. This trend establishes itself as a primary concern.

AI Investment Scams

Another category of fraud gaining prominence is the AI scam, where businesses and companies actively seek investments or customers. They employ the allure of artificial intelligence or AI to underpin their operations, leveraging the novelty associated with this concept. Numerous enterprises operate under the assumption that presenting themselves as AI-driven will attract augmented investor or customer interest.

Yet, a disconcerting number of these entities lack genuine AI integration, resorting instead to manual labor and human intervention to execute tasks ostensibly handled by AI systems. While a degree of automation may exist, the technology employed hardly constitutes groundbreaking innovation; some applications have existed for over two decades. The implied AI involvement often amounts to a facade. Thus, whenever claims of AI influence drive investment or purchasing decisions, it’s prudent to demand substantiation. Prospective investors and customers should insist on comprehensively demonstrating the AI’s functionality within the business’s framework. Failure to provide such evidence should prompt the exploration of more transparent alternatives.

Business Sale Fraud

Concurrently, we observe a surge in business sale fraud, particularly within the domain of companies available for purchase. Enterprises assert revenue figures as the cornerstone of their valuation, linking their business’s value to purported sales activity. However, closer examination frequently exposes a stark discrepancy between reported revenue and the actual financial reality. This discrepancy arises due to the creation of bank accounts, through which financial activity is manipulated. Funds might be introduced and withdrawn, and while these accounts might show activity, they do not mirror the core business’s authentic sales, marketing, or operational activities.

Prospective buyers venturing into business acquisitions must exercise diligence in confirming the accuracy of presented numbers. Relying solely on profit and loss statements can prove inadequate; verification extends to inspecting genuine bank records to affirm the presence of authentic revenue. This audit should extend further to trace the revenue back to its origins, thereby confirming its alignment with genuine sales transactions. It has been observed that the bank accounts displayed to potential buyers sometimes bear no relevance to the business at hand; rather, they could pertain to an unrelated enterprise or even serve as receptacles for interest earnings from another account. Vigilant assessment is warranted to ensure monetary exchanges are rooted in genuine business operations.

Wire Transfer Fraud

Lastly, counterfeit transfer fraud is a notable concern within the current climate. Organizations and individuals engaged in wire transfers, ACH payments, or check payments must exercise caution to validate recipients. Fraudsters employ tactics to deceive companies and individuals into redirecting payments to erroneous parties. Often, accounts payable departments receive invoices that seemingly originate from legitimate sources. Yet, these messages request transfers to falsified bank accounts. Through means like hacking emails or mining social media data, scammers fabricate counterfeit invoices resembling transactions with established companies. As a result, funds intended for legitimate transactions land in the wrong hands, leaving both the deceived entity and the rightful recipient in a quandary.

In conclusion, the landscape of scams and frauds in 2023 is diverse and increasingly complex. Awareness and vigilance are paramount, whether safeguarding personal interests or upholding the integrity of a business venture. By remaining astute to evolving fraud tactics and employing proactive measures, individuals and companies can better insulate themselves against potential losses that could hinder their pursuits and aspirations.