Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach díospóireacht -
Wednesday, 31 May 2023

Authorised Push Payments Fraud: Discussion (Resumed)

An Cathaoirleach

I note that the minutes of our meeting of Wednesday, 24 May 2023 were agreed earlier in private session. Apologies have been received from Senator Higgins. Today the committee is meeting with the assistant Garda Commissioner and officials from the Department of Justice on the topic of authorised push payment fraud. We are joined from An Garda Síochána by Assistant Garda Commissioner Justin Kelly and Detective Superintendent Michael Cryan; and from the Department of Justice by Mr. Ben Ryan, assistant secretary, and Ms Kate Oliver, assistant principal. They are all welcome.

Witnesses who are physically present or who give evidence from within the parliamentary precincts are protected pursuant to the constitutional statute by absolute privilege. If not present, they may be only entitled to limited privilege. They are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the person or the entity's good name.

I invite our witnesses to make their opening statements. We will first hear from Assistant Commissioner Kelly, to be followed by Mr. Ryan.

Mr. Justin Kelly

On behalf of the Garda Commissioner, I thank the committee for the opportunity to speak today. I am the assistant commissioner with strategic responsibility for tackling organised and serious crime. One of the bureaux under my remit is the Garda National Economic Crime Bureau, GNECB. My colleague from that unit, Detective Superintendent Michael Cryan, joins me today.

Authorised push payment, APP, fraud is a term given by the banking industry to a situation where a criminal deceives a victim into willingly making a financial transfer to them. This type of fraud involves extensive social engineering and can take many forms, for example, invoice redirection fraud, romance fraud or investment fraud. In all cases, the deception creates the willing participation of the victim, which bypasses any security measures put in place by the financial institution, and allows the criminal to steal money from the victim. In almost all cases, the initial payment is transferred to what is known as a money mule. A money mule is a person who transfers illegally obtained money between different payment accounts, often in different countries, on behalf of the criminals. These types of crime are simply not possible without money mules. Once received into the mule account, the funds are rapidly dissipated through the legitimate banking channels to the ultimate benefit of the controlling organised crime group.

The criminal offences committed by this behaviour are deception and money laundering. Deception is an offence contrary to section 6 of the Criminal Justice (Theft and Fraud Offences) Act 2001, and money laundering an offence contrary to section 7 of the Criminal Justice (Money Laundering and Terrorist Financing) Acts 2010 to 2021. Both are serious criminal offences that attract maximum prison sentences on conviction on indictment of five years and ten years respectively.

These crimes are potentially devastating for victims and their families. By the very nature of these crimes, we know they are underreported.

These crimes are often extremely lucrative for criminals. This is a growth area in the context of crime, both here and internationally.

The GNECB is responsible for the investigation of the most serious and complex economic crimes. It plays a proactive role in the prevention, disruption, detection and investigation of economic crime. It also provides support and assistance to regional and divisional Garda investigators and provides training in the form of a University College Dublin accredited postgraduate certificate in fraud and e-crime investigation, and a specialised course in money laundering investigation. To date, the GNECB has trained 680 and 200 investigators in each of the respective courses, and these members are available in each Garda division throughout the country. The resourcing of the GNECB was the subject of the 2021 Hamilton review group. The recommendations of this report have been accepted and are currently being implemented. The GNECB recently held a competition to fill vacancies at all ranks, including forensic accountants and forensic analysts.

An Garda Síochána works closely with the Departments of Justice and Finance, the Central Bank of Ireland, Europol, Interpol and the wider policy and law enforcement community on economic crime and anti-money laundering issues. The GNECB co-chairs a number of public private partnerships with the Banking Payments Federation of Ireland, BPFI, and the financial industry to address economic crime in a collaborative manner. The GNECB has had success in working with Internet service providers and web-hosting platforms to remove information that sought to recruit victims and money mules.

Ireland has a strong legislative framework to deal with economic crime. An Garda Síochána utilises the organised crime legislation, where appropriate, because organised criminal groups are behind almost all economic crime. Many of such groups are transnational in nature. An Garda Síochána is engaging with the Department of Justice and the Hamilton implementation group to strengthen some legislative areas to increase the efficacy of criminal investigations in this area.

An Garda Síochána has had recent success in the international arena with regard to economic crime. Operation Skein is an investigation into an international organised crime group, OCG, committing business email and romance frauds worldwide, and laundering the proceeds through mule accounts in Ireland. More than 300 people have been arrested at each level of the OCG, from mules to herders and facilitators and on to those at the very top controlling the OCG in this jurisdiction. Six individuals have recently been convicted under our stringent organised crime legislation.

An Garda Síochána is fully committed to a victim-centric approach by fully investigating any criminal matters reported to it to the fullest extent of the law. If any member of the committee has any questions both my colleague and I are keen to assist.

Mr. Ben Ryan

I thank the committee for the opportunity to present to it. I am the head of criminal justice policy function within the Department of Justice. I am speaking on behalf of the Department and the Secretary General, who is unfortunately unable to attend. I am accompanied by my colleague, Ms Kate Oliver, from the economic, transnational and organised crime unit in my function.

At this stage, I will explain that while the Department of Justice engages with An Garda Síochána and other stakeholders on tackling fraud generally, the Department of Finance maintains the policy lead on the banking sector, which includes many of the measures relevant to tackling authorised push payment, APP, fraud. It also involves other Departments and their agencies. I will, of course, do my best to address any queries raised today and can follow up with colleagues in the Department of Finance or in other Departments and agencies for any questions I cannot answer.

Figures provided by the BPFI show that in 2021, 3,967 transactions were affected by authorised payment fraud, accounting for a gross loss of €16.8 million. This was up from 1,646 transactions in 2019, which accounted for a gross loss of €10.3 million. However, looking at the figures for 2022, the provisional crime statistics released by An Garda Síochána in March show that technology-based fraud, such as phishing, account takeover, and online shopping fraud, went down in 2022, following the significant increase during the Covid-19 pandemic.

On a domestic level, banks undertake a range of actions to tackle fraud. These include: payment-screening measures; running systems to detect unusual payment patterns; customer engagement to ensure any suspected fraud is reported immediately; and educational campaigns to ensure customers are aware of the risks of this type of fraud and how to avoid it. As members are aware, the report from the retail banking review was published last November. The Department of Finance is working on a number of recommendations arising out of this. This includes engaging with the financial literacy stream of the adult literacy for life strategy so that Ireland is compliant with the OECD High-Level Principles on Financial Consumer Protection and the recommendation on financial literacy. The Commission for Communications Regulation, ComReg, a body under the aegis of the Department of the Environment, Climate and Communications, is actively working with the telecoms industry through the nuisance communications industry task force to mitigate scam texts and calls and restore trust in the telecommunications industry. The task force has published a number of information documents to help businesses combat scam communications.

The revised payment services directive, PSD2, was transposed into Irish law with effect from 13 January 2018 by the European Union (Payment Services) Regulations 2018. The main objectives of PSD2 include enhancing consumer protection and improving payment security across Europe. The European Commission is currently reviewing the directive. It is expected that this will include fraud, which encompasses APP fraud. This review is expected to be published in late June. Officials from the Department of Finance have been engaging with the Commission’s review on areas of Irish interest, including payment fraud.

As regards specific resources, the criminal justice policy aspects of fraud are the responsibility of the economic, transnational and organised crime policy team under my remit. Our colleagues in our criminal legislation function look after any relevant primary and secondary legislation required. This is in addition to the staff working on these issues in the Department of Finance. The GNECB is responsible for the investigation of all types of fraud cases. It should be noted that the Garda Commissioner is obviously responsible for the allocation of resources within An Garda Síochána. However, I am informed a 21% increase in resourcing has been provided to the GNECB since the end of 2020. This translates to an increase from 95 staff to a total of 115 staff at the end of March 2023. Assistant Commissioner Kelly has given some initial detail on resources within the GNECB and can provide more, if required, but I take the opportunity to emphasise that this is an issue the Government takes extremely seriously.

I am happy to address any specific questions I can that the committee may have, or go into further details on anything I mentioned.

Deputy Pearse Doherty

I welcome our guests. Cuirim fáilte rompu agus gabhaim buíochas leo as a bheith anseo.

I will start with Assistant Commissioner Kelly. Will he give us some understanding on what happens when somebody is a victim of an APP fraud? The BPFI told us that 3,967 transactions were affected by APP fraud in 2021. Was each one of those transactions reported to the Garda Síochána?

Mr. Justin Kelly

To give a sense of what happens, the first thing is we always encourage people who have been victims of fraud to come forward. However, we know that fraud and economic crime is a heavily under-reported crime. I will give an example to illustrate that. From a recent operation that involved one particular financial institution here, we know there were 800 victims of an APP-type fraud in that. When we looked at our own records, we saw 100 people had reported it. That is an 800:100 ratio, which gives an indication of the under-reporting we know is going on.

Deputy Pearse Doherty

What type of fraud were there 800 instances of?

Mr. Justin Kelly

It was a phishing scam that we worked on with international colleagues. I gave that example as an indication that we know there were 800 victims from a particular institution here. When we tallied that with our own records of what had been reported, however, there were only 100 instances. That gives an indication of the under-reporting that is going on.

Deputy Pearse Doherty

That is obviously massive. It is great news for the person who is committing this crime because, obviously, 700 cases where there were victims are not being investigated by the Garda, if it does not have the information.

Mr. Justin Kelly

Absolutely.

Deputy Pearse Doherty

Do the financial institutions not have automatic reporting to An Garda Síochána? I dealt with this matter previously in the context of a different committee. If someone is aware of a crime being committed - as far as I know, it is under section 10 of some legislation, but I stand open to correction - it is an offence not to report that.

Mr. Justin Kelly

Absolutely, yes.

Would the banks not be committing an offence by not reporting fraudulent activity they are aware of?

Mr. Justin Kelly

I will give clarity around that. We get two forms of reports. I know the committee discussed suspicious transaction reports, STRs, at its last meeting, which is one format. I think the Deputy is referring to the second one, which are reports under section 19 of the Criminal Justice Act 2011 which puts a legal obligation on people who know of a possible fraud to report it to An Garda Síochána. We get two streams of reporting. I know from the last meeting that the Deputy was interested in the number of STRs. In 2022, there were 47,421 STRs. To give an indication of where this type of activity is going, in the previous year there were 38,712 STRs. Looking at STRs, it is interesting that the new legislation that regulates this, the Criminal Justice (Money Laundering and Terrorist Financing) Act, came into force in 2010. In 2009 there were 24,000 STRs. A jump can be seen from 24,000 to 38,000 when the legislation came into force in 2010. That is the first reporting stream.

Deputy Pearse Doherty

To stick with the STRs, I do not have the numbers in front of me from the BPFI. We are focusing on authorised push payments here, but STRs deal with authorised and non-authorised push payments. From memory, the figures for both of those for that year was significantly higher than 47,000. Is that correct?

Mr. Justin Kelly

All STRs come into the financial intelligence unit in the GNECB. The 2022 figure I gave of approximately 47,000 is the definitive figure.

Deputy Pearse Doherty

Okay.

Mr. Justin Kelly

To put some clarity on that figure, 60% of those were revenue-type reports. I will give an example. It might be a report of someone not getting an invoice related to a transaction and pressure being put on them to pay in cash. They are not all purely economic crime. Many, 60%, are revenue reports. We triage how we deal with the remaining ones. As the Deputy can see, there is a significant number. The first layer we look at is terrorist financing. That is the priority we look at first and we liaise closely with our colleagues in the anti-terrorism area on those. After that we take a risk-based focus on the others. We retain the more high-end, serious ones in the money-laundering investigation section of the GNECB. We put an intelligence package around a significant number of the others and they are circulated around the country for investigation in Garda divisions. They primarily go to the people I spoke about in my opening address, who we have upskilled to deal with fraud-type offences. That is the STRs. Is that what the Deputy was looking for around STRs?

Deputy Pearse Doherty

Yes, please carry on with the section 19 reports which is the second level of report.

Mr. Justin Kelly

Yes, absolutely. We receive a significant number of section 19 reports every year, primarily from the banking sector. What happens with them is-----

Deputy Pearse Doherty

Can Mr. Kelly tell us how many were received in the past year?

Mr. Justin Kelly

Unfortunately, I do not have those numbers with me but I can give statistics around the incidence of economic crime we have every year.

Deputy Pearse Doherty

Is it thousands?

Mr. Justin Kelly

We receive roughly 800 to 1,000 incidents a month. They are invariably reports. If we look at it year on year, it is interesting that the peak of reports in the past few years, as would be expected, was during the Covid-19 pandemic. From this time last year to now, we are down 28%, which is a great success for An Garda Síochána and our partners who are working on this. There are many different areas of economic crime. I am aware that the committee discussed many of the different types of authorised push payment, APP, fraud in its last meeting. These crime areas wax and wane. Much of that depends on the attention we are putting on them. For example, from last year to this year, romance fraud is down but other types of fraud are up. Investment fraud is up. That is when people are encouraged to invest in schemes, which are often non-existent, especially around cryptocurrency. That type of fraud is significantly up, but romance fraud is down. Much of it will depend on the action we have taken. A good example around economic crime is that ATM skimming is practically non-existent now. That is because of several large operations we ran. We arrested whole groups that were involved in it.

Deputy Pearse Doherty

Does Mr. Kelly have any detail or the breakdown of the number of crimes in the area of APPs?

Mr. Justin Kelly

Certainly. I have some.

Deputy Pearse Doherty

Can we go through that? Is the latest data for 2022?

Mr. Justin Kelly

I have data for 2021 and 2022. Again, by way of clarity, APP is a banking term. I think I explained that. We record incidents as economic crime and within that we have various categories. I can go through some of the categories.

Deputy Pearse Doherty

Accommodation fraud is one of them.

Mr. Justin Kelly

Yes, accommodation fraud is one of them. I have done this, not by number of incidents, but by value or the amount of fraud involved. In 2022, it was €599,000. In 2021, it was €506,000. There was a significant increase between 2021 and 2022. If it is helpful I can tell the Deputy which other figures I have and he can let me know which ones he is interested in. If any are not clear, perhaps I or my colleague can explain in detail what each of them means. We have account takeover fraud; business email compromise; card-not-present fraud; investment fraud, which I referred to earlier; loan-mortgage fraud; phishing; vishing; smishing; romance fraud; shopping online auction fraud; and a catch-all for more unusual ones.

Deputy Pearse Doherty

Perhaps Mr. Kelly could give those details to the committee. He does not know the number of victims, which is what I was looking for.

Mr. Justin Kelly

No, our recording system records by incident.

Deputy Pearse Doherty

I am trying to figure this out. If someone is a victim of investment fraud, romance fraud or accommodation fraud, having bought a holiday that was fraudulent, and is out of pocket by €4,000 or €5,000, the bank will not reimburse that. If it is romance fraud, the amount could be €20,000. We have seen people putting €60,000 into fraudulent investments.

Mr. Justin Kelly

Absolutely, and significantly bigger figures.

Deputy Pearse Doherty

Significantly bigger. They are not getting that money back from the bank if the culprit has moved it on. The Garda receives approximately 1,000 reports per month or 10,000 to 12,000 per year. Is each of those cases investigated? Does An Garda knock on the victims' doors and question them? I am genuinely trying to figure this out. I know if I reported to An Garda Síochána tomorrow morning that someone burgled my house, An Garda Síochána would call me and ask me to give a statement or gardaí would call to the house. When the bank tells An Garda Síochána that someone burgled my bank account through a fraudulent method, what happens? Are there 10,000 or 12,000 investigations? Are there 10,000 or 12,000 statements? Is this done at an individual victim level?

Mr. Justin Kelly

Yes, absolutely. As I said earlier, we encourage people to come forward with all complaints, no matter what they are. However - I know the committee knows this - the investigation of economic crime, especially the type the committee is interested in, is extremely difficult.

The difficulty arises in respect of how money mules operate, the fact some of the groups behind them are not based in this jurisdiction and how quickly the money moves. That is one reason we encourage people to come forward to us straight away. The sooner people come to us, the sooner we can freeze accounts and try to get the money. What we try to do-----

Deputy Pearse Doherty

Before we go there, it is important, therefore, and it is strong message, that the individuals come forward-----

Mr. Justin Kelly

Yes.

Deputy Pearse Doherty

-----but the bank comes forward to the Garda. When a bank notifies the Garda, does that trigger a Garda investigation into that individual having been defrauded.

Mr. Justin Kelly

Yes, absolutely.

Deputy Pearse Doherty

What happens in that context? Does the Garda call that person? Does it need that person to come forward themselves or is it able to trigger the investigation in any event? What does it do? Does it make contact with the individual?

Mr. Justin Kelly

If the Deputy does not mind, I might hand that over to the detective superintendent who is with me because he will know the operational detail.

Mr. Michael Cryan

First, there can be duplication. The bank may report it and the victim may have already reported it themselves. The bank reports the money mule to a local station or to us. If it reports to us, that is assessed, triaged and sent out for investigation. As part of the investigation into the money mule, the victim will be contacted. It is not entirely necessary to have a victim to prosecute money laundering, although it certainly helps. Sometimes victims have been refunded, and if they have got their money back, they may not want the hassle of being involved in an investigation. What is reported by the banks, under section 19, is sent out to local stations, invariably for investigation. It relates mainly to the money laundering part of it and where the money ended up, and that is traced back to the victim where the money came from.

Deputy Pearse Doherty

I understand that, because that is a focus on the money laundering and the money mule. I am focusing on the individual who has been robbed.

Mr. Michael Cryan

Yes, but they are the victim in the money laundering prosecution.

Deputy Pearse Doherty

In all cases where the victim has been robbed as a result of fraud, is there an investigation when the Garda is notified by the banks, and are the victims in all cases contacted by the Garda? I ask because many people are victims of fraud online, have lost thousands of euro and have never been contacted by the Garda. That is my understanding.

Mr. Michael Cryan

I cannot account for every investigation, but in the ones we conduct, the victim is part of the investigation because we try to prove money laundering or that the money was stolen in the first instance, and the person who can show it was stolen is the victim.

Deputy Pearse Doherty

Not all reports that the Garda receives of suspected section 19 violations are investigated to that level, however. It deciphers and determines that.

Mr. Michael Cryan

Yes, we cannot investigate them all and in a lot of cases, it is better if it is done locally. Wherever the suspect lives, it is done by the local district.

Deputy Pearse Doherty

I am saying that in thousands of cases, locally and nationally, where persons are victims of fraud and have lost substantial sums, there is no contact by the Garda, even when the Garda has been alerted to that by the bank.

Mr. Michael Cryan

I would not agree that there are thousands, given that once a person is identified as a victim, there is a mechanism on PULSE whereby the victim must be contacted and be shown to have been contacted. I cannot give a figure, however, for every case.

Deputy Pearse Doherty

If that is the case, Mr. Cryan is saying every victim is contacted.

Mr. Michael Cryan

I cannot say whether they are or not-----

Deputy Pearse Doherty

I know for a fact that they are not. I accept that there is a lot of this crime and the resources of the Garda are extremely stretched in respect of it, but I am trying to figure out where it stands. How many section 19 notifications were there in, say, 2022, how many victims did they relate to and how many victims were contacted or not contacted by the Garda during that period? Is it possible to get those figures?

Mr. Justin Kelly

We can certainly look at it to see whether it is doable. I will talk to our analysts and see whether it is. Naturally, if it is, we will supply the figures to the committee.

Deputy Pearse Doherty

How many of these 10,000 or 12,000 section 19 notifications per annum ended up in prosecutions in 2022?

Mr. Justin Kelly

Again, I do not have with me the figure for overall prosecutions. Our focus in the GNECB is on upstream prosecutions, by which I mean we focus on disrupting the activities of the gangs who are behind this. I am sure the Deputy will have seen in the media over the past six or eight months that there have been prosecutions under organised crime legislation and money laundering legislation of a number of key figures who are behind the groups. At my level, which is national level, that is where we our focus is. It is on disrupting the activities of these groups and preventing them from harming more victims. That is what we are doing.

Deputy Pearse Doherty

We wish the Garda every success in that regard, but we are talking about thousands of crimes being committed each year, thousands of victims and money being lost and not being recompensed in many cases. I would love to whether anyone is ever prosecuted.

Mr. Justin Kelly

Absolutely, there are lots of prosecutions every year. I do not have the figures with me but, for example, in the case of money mules, there are hundreds of prosecutions for money laundering every year. I presume the Deputy is familiar with money mules and how that system works. For us, it is clear those people are committing a money laundering offence, and we have hundreds of prosecutions for those people every year.

Deputy Pearse Doherty

Will the Garda provide statistics it has for the value of these types of crimes, such as romance fraud and so on? I am sure it knows the number of victims relate to them and the number of prosecutions that arise from them. Can that be provided to the committee?

Mr. Justin Kelly

Yes, I will certainly talk to our analysts about it.

Deputy Pearse Doherty

I thank Mr. Kelly. I will ask my remaining questions together. There have been investment scams where, as I said, people have ended up out of pocket by €60,000 or €70,000. Some of these investment scams are advertised on social media platforms. Are they ever prosecuted for their participation and for taking money from a scam? What learnings have there been from that?

Turning to the Department of Justice, we are hearing about all the problems here, with so many victims and so on, yet there is no national strategy for combating economic crime. It was promised a couple of years ago but it still is not there. How can the Department justify this not being given priority at a departmental level?

Furthermore, the banks are looking to share data to assist the Garda with what it is doing to deal with issues in real time, yet the shared fraud database is somehow, we understand, being frustrated and prevented from coming into being by the Department or the Minister. Will the officials give the committee some rationale in light of the number of victims? Why is there no strategy for combating economic crime, despite it having been promised in the first quarter of 2021? It is more than two years late. Why is the Department frustrating the establishment by the banks of a shared fraud database?

Mr. Justin Kelly

On the first question, I am not aware of social media companies having been prosecuted for that.

Mr. Ben Ryan

On a national strategy, it was indicated in the Hamilton report that it would be in the first quarter of 2022. There were delays in establishing the committee at the time. Obviously, there were a lot of draws on resources as a result of Covid and everything else, and the advisory council of the Hamilton committee was not established until later in 2022. It is the vehicle through which the strategy is going to be developed. The council is now up and running and has quarterly meetings, and had its most recent meeting yesterday.

In respect of the development of the economic crime strategy, the current phase is trying to identify the consultation exercise that is going to inform the strategy. For example, there are representatives of academia on the advisory council. We are working with them and are going to progress that aspect first to undertake the consultation exercise to inform what should be in the economic crime strategy.

It is delayed, yes, but work is being undertaken. The existence of the advisory council and the Hamilton report that led to it being established indicate progress in this area. All the key players are around the table. They are working together to try to combat these types of crimes. A national strategy has to be well informed and evidence informed. We do need to consult on it and it is important not to rush it but we are making progress.

Deputy Pearse Doherty

That is one thing we can give the Department. There are so many victims out there and the Department still does not have a strategy. Across the water, they are onto their second strategy. It does not take years to develop a strategy. Is there a new timeline for it?

Mr. Ben Ryan

I do not have a timeline at this stage but I can come back to the committee on that. A strategy can be developed very quickly but it might not be the most informed. It is important to have it well informed and that is what we are trying to do. We set up the advisory council to bring all the expertise together and now we are embarking on a consultation exercise to inform the creation of the strategy. That is where we are on that.

Chairman

I call Deputy Conway-Walsh.

Deputy Pearse Doherty

Sorry, the officials did not answer the question about the database.

Mr. Ben Ryan

We have engaged very regularly with Banking and Payments Federation of Ireland, BPFI, on the creation of the shared fraud database. We support it. We can see the merit in it. We liaise with the federation and the Data Protection Commissioner's office to ensure it is done in a way that protects people’s data. We have had regular, very good and constructive engagement with BPFI over a long period. It is at a stage where there is agreement on the way forward, namely, a new statutory instrument. We have committed to producing that SI, but the reality is the Department of Justice is responsible for a significant percentage of the State’s overall legislative output and there are other competing priorities. It is something we have committed to do, but even in the economic crime area we are working on proceeds of crime legislation and there are new EU instruments coming down the track which will have to be transposed. There are a range of competing priorities even within the narrow field of economic crime and then there is the broader legislative programmes the Department of Justice is committed to. It is difficult to prioritise everything but we are committed to it and we are happy to do it but we just have not reached it yet.

Deputy Rose Conway-Walsh

I thank our guests for their opening statements. Of the €6.8 million stolen in 2021, how much was recouped through actions of law enforcement?

Mr. Justin Kelly

The figures we have for 2021 are significantly higher than that. The figure we have from our recording system is €67 million. With the way our system works, we would not have the recovered amounts without going into each individual investigation. I would have to go back to each individual one to try to work it out. The reality is that with this type of crime, quite often those funds are not recovered. I cannot estimate a percentage but a significant amount is never recovered.

Deputy Rose Conway-Walsh

Are they ever recovered?

Mr. Justin Kelly

Absolutely, yes. That is why, as I said earlier, it is really important that people come to us and report quickly. We have powers to freeze accounts and the ability to speak to colleagues abroad. We have frozen accounts abroad. There is a perception that once money leaves the jurisdiction, it is gone, but we have had investigations where money has left the jurisdiction as far away as Hong Kong and we have been able to freeze it and return it to victims.

Deputy Rose Conway-Walsh

Would it not be really important to have the aggregate figures for that to encourage more people to come forward and report so people can see there are results from coming forward and the money can come back? Should An Garda Síochána not have those figures? Is there a way Mr. Kelly can supply those to the committee? Are the necessary resources available for An Garda Síochána to be able to tackle this in a meaningful way?

Mr. Justin Kelly

I suppose with ICT resources, the Deputy is talking about our incident recording and how we record our crime incidents. We have a very robust system around that. We have the ability to do deep analysis of things if we need it. On the public, we spend a lot of time on publicity campaigns on all the various types of economic crime the committee has been discussing to encourage people to come forward. Our strategy is twofold: enforcement and education. Education around publicity to the public is one part but it is also about discouraging people, particularly students and unemployed people, from becoming involved in it. We are seeing a lot of people over 55 years becoming involved in money muling. A lot people aged 18 to 24 years is the demographic around students and the unemployed. We spend a lot of time in colleges and have done a lot of social media work around discouraging people from becoming involved in that. I see the Deputy’s point around our showing that we do recover funds. I would say we spend a lot of time and effort on this area. We have a fraud awareness week where there is intensive publicity, and there are various dates during the year. The Deputy has probably seen how, around St. Valentine’s Day, we put a particular emphasis on romance fraud.

Deputy Rose Conway-Walsh

Why are people saying they will not come forward? What is the key thing?

Mr. Justin Kelly

It is human nature, really. There are a couple of reasons. When people are scammed, they are often embarrassed about it and they do not want to come forward about it. That is one reason. Romance fraud is a particularly odious type of fraud. You can imagine-----

Deputy Rose Conway-Walsh

I can, but are people saying they are not coming forward because they do not think there will be a result or that it will not be worthwhile and that nothing will be done about it?

Mr. Justin Kelly

That is not the sense we get. I know this was discussed at the previous meeting, but people are getting the smishing and the SMS texts all the time and they are not reporting them because they are just so common now. We all get them so people do not report around that. When people are compensated, as my colleague said earlier, there is the question of whether they want the hassle of getting involved in an investigation afterwards. Under-reporting is a multifactorial thing. It is not unusual to this jurisdiction. From talking to my colleagues abroad, under-reporting of economic crime is quite common not only across the EU but also internationally.

Deputy Doherty spoke about some of the investment frauds and the numbers around them. Some of the numbers are staggering. Again, with under-reporting in that area, it can be seen why businesses might not want the publicity around that to show how easily their systems were compromised.

Deputy Rose Conway-Walsh

Looking globally at fraudsters moving from one jurisdiction to another, what will happen is they will move to the jurisdictions which do not have the tighter legislation or the resources to tackle it. If they are looking and see 300 people being arrested and six individuals being investigated, they can weigh that up with the chances that they are going to get caught. Do they feel they have more of a chance of getting caught in Britain than they would have here or other countries or are we really good at it? I just cannot see the key performance indicators that tell us we are ahead of this and that concerns me, when we see the numbers exponentially increasing all the time.

Mr. Justin Kelly

If we look at legislation here, we are on par with most of our peers around the EU on legislation. In fact, some of our legislation is looked at with some envy by our colleagues when we meet them abroad, particularly on money laundering.

The second thing to say, which I probably cannot say too much about publicly, is we know from intelligence that there are certain groups that do not want to operate here. There are two things. The Deputy has hit the nail on the head. The groups are weighing up the risk about where they should go. In particular areas of economic crime, there is fear of the investigations here and the potential sentences they may get. The Deputy is right, they are going to go to places where they can operate with the least risk. I will hand over to Mr. Cryan to discuss the operational end.

Mr. Michael Cryan

We are very strong on the numbers arrested and prosecuted. I meet law enforcement people from all over the world through Europol, INTERPOL and Eurojust. We have a number of advantages other countries may lack. The first is that we are quite small from a population point of view. Our big advantage is we have one national police force. The Deputy talked about prosecutions. It is just six prosecutions, but in one investigation alone we have arrested almost 100 people under the gangland legislation alone for this type of criminality. They will face prosecution down the road. We have, I would say, 20 to 30 before the courts at the moment in one investigation. All are charged with offences under the gangland legislation, money laundering, possession of false documents and theft offences. As the assistant commissioner said, there was a 28% drop in 2022. The enforcing and the arrests are certainly part of the reason for that reduction. There is no doubt about that.

Deputy Rose Conway-Walsh

I move to the DPP and resourcing. It has identified a need for staff for the financial crime unit. Is that causing issues with prosecutions?

Mr. Michael Cryan

I work closely with the office of the DPP. We have a great relationship with it in relation to files. Very complex files go to that office and directions are received. A couple of files go to the DPP each week, and directions are received. I am sure the office would like to have even more resources, like everyone else. I have no complaints.

Deputy Rose Conway-Walsh

The DPP's office is outlining significant risks, identifying the increases in financial crime and saying it does not have the resources it needs. Basically, Mr. Cryan is saying it does.

Mr. Michael Cryan

I am saying that there has been a huge increase in the number of complex files sent to the DPP by our office. There is no doubt about that. I would not be able to tell the Deputy the turnaround time for our getting directions back. It depends on the complexity of the file. I am sure the DPP's office would love to turn them around quicker. I am certain that if it had more resources, it would be turning them around quicker.

Deputy Rose Conway-Walsh

The office is clearly identifying there are shortfalls in ICT hardware infrastructure, as well as in the context of the number of staff required. How many forensic accountants does Mr. Cryan have?

Mr. Michael Cryan

We have five.

Deputy Rose Conway-Walsh

Is five sufficient? Mr. Cryan rightly identified the complexity of these cases. Is five enough to do what needs to be done here?

Mr. Justin Kelly

On resourcing, and not just around forensic accountants but also analysts and any sort of specialists, we always want more, especially in my area of organised and serious crime. When I look at that, I have cybercrime, drugs and organised crime, the NBCI, protective services and all that entails, as well as economic crime. All those different areas are drawing on us for specialists.

Deputy Rose Conway-Walsh

Exactly. With respect to workforce planning, has Mr. Kelly specifically requested what he needs? He will have been able to tell from the numbers in the last few years how it is going to exponentially increase again. We have AI as well, which in one sense will help us identify things, but it could also cause all kinds of challenges. Has Mr. Kelly AI expertise? What specifically has he requested with respect to the different personnel he needs?

Mr. Justin Kelly

The Deputy is right to mention workforce planning. To explain it simply, there is the front line and the divisional resources, and all the front-line gardaí out there. Then there are the specialist units such as, for example, the ones I described that I have responsibility for. If we are looking for people, the only place all the people we need to go into those specialist units can come from is from the front-line resources. There is always a balance to be drawn between specialist units, not just in my area but also with armed response units and all the various units we now have that heretofore we would not have had. They are all draws on front-line policing.

Again, the more people we put into my areas and all the different areas I have spoken about, the more crimes we can investigate. There is no limit. If someone said to me tomorrow I can put 500 more people into drugs and organised crime, I would not have 400 people twiddling their thumbs. We would just increase the number of arrests and prosecutions. It is the exact same for economic crime. Unfortunately, it is the exact same for crime against children and sexual crime. The more people we put into those specialist units the more we can do and the more we can investigate. Like I said, the Deputy is right it is a workforce planning issue. It is about balancing all that up with everything else members see going on. Members see demonstrations on the street. They see all that other front-line policing activity and the community policing everybody wants to see. We have just got to balance all that and that is done with our human resource management.

To answer the Deputy's question succinctly, I have sought all the resources I need for economic crime from our HR people. We have just completed a competition for extra detective sergeants for economic crime. Another competition for detective gardaí is about to start. There will be new resources coming in, with the detective sergeants quite soon and the detective gardaí to follow. Despite all I have said, there are additional resources moving into economic crime.

Deputy Rose Conway-Walsh

However, they obviously need to be planned, targeted and all of that.

Mr. Justin Kelly

Yes.

Deputy Rose Conway-Walsh

It would be useful for us to know about as a committee. We want to support Mr. Kelly in work he is doing, which we see as a vital part of protecting the community.

Maybe he can deal with this in answer to somebody else, but he referred to the co-chairing of a number of public-private partnerships with the BPFI. Do any of those partnerships specifically focus on authorised push payment fraud? How would our guests assess in that the willingness of the financial institutions to take responsibility for prevention in particular of the authorised push payment fraud?

Mr. Justin Kelly

We have a good working relationship with the banks. There is daily interaction for our operational people. I definitely would not say that the sector is a hindrance to our work. At management level, we have bimonthly meetings, we have intelligence sharing and we have a number of pilot schemes under way that we are both working on to try to improve efficiency about the reporting. My discussion with Deputy Doherty was on section 19. We have a pilot scheme to try to improve that at the moment. We have a good relationship with the sector and we work well with it.

Deputy Rose Conway-Walsh

That relationship is extremely important. Some people do not understand if someone goes out of the EU to travel internationally and wants to use his or her bank card of whatever, he or she is supposed to notify the provider before he or she goes. That person will then get calls while abroad to ask if a transaction was made by them. We can get any number of calls in a day in respect of this matter. It just does not seem to match up with regard to people travelling abroad and the influx in terms of the number of attempts to commit fraud.

Mr. Justin Kelly

The problem is this is a numbers game. With the organised crime groups involved in this, it is like a brute-force attack. The Deputy was correct to mention AI, but the criminal groups have electronic methods, as I am sure the committee is aware, that allow them to multiply their forces in a way we never saw heretofore. When I joined the organisation 30 years ago, it was cheque fraud, credit card fraud and skimming.

The ability they now have in terms of cyber-enabled activities is the reason behind those multiple attacks. I would not like to say it is exactly like whack-a-mole but every time we or the banks put pressure on an area and close a loop, they move to another area. These people and groups are incredibly organised. It is not a couple of people in box rooms organising this; these are highly organised groups with hierarchical structures. Without publicly going into a lot of detail, we know exactly how they work and how detailed they are at each level. This is a huge business for them. As a result of the risk levels, indigenous criminals here have moved from what they did previously into these easier types of fraud. Without labouring the point, cash-in-transit attacks were a significant issue in the 1980s and 1990s but we have not seen a big armed robbery cash-in-transit attack for a long time, touch wood, and that is because criminals have found far easier ways to make money without putting themselves under that risk. They know we have armed support units, intelligence operations, surveillance and so on. They are moving to easier methods of making large volumes of money. People who were involved in traditional violent organised crime have moved into these areas.

Deputy Jim O'Callaghan

I thank our guests for coming before the committee. I acknowledge and commend the Garda National Economic Crime Bureau on the excellent work it does. We are here to discuss authorised push payment fraud but the ambit of the GNECB extends to the whole area of white-collar crime. I am aware of all the successful convictions that have taken place as a result of the excellent work it does. It is important to state that.

The Garda can be a bit like lawyers, in a way - it only gets involved when something has gone wrong. It is called in when a crime or fraud has been perpetrated.

An Cathaoirleach

The payscales are different.

Deputy Jim O'Callaghan

No comment. What can be done to improve prevention? What should financial institutions do to reduce the level of crime? Assistant Commissioner Kelly referred to the fact that we do not see cash-in-transit robberies anymore. Obviously, that is a result of the declining level of cash but, in addition, the financial institutions changed their practices in terms of transferring cash by road. What do Assistant Commissioner Kelly and Detective Superintendent Cryan believe the financial institutions could do improve the situation?

Mr. Justin Kelly

I will comment briefly and then pass over to Mr. Cryan. The banking people have made significant strides in recent years. We all know about two-factor authentication and the various safeguards. The big problem is that the human factor is the weak point. Most of these attacks do not come from complicated hacks, spam or computer viruses. Rather, they come from human weaknesses, where people have fallen for the various methods of which I am sure the committee is aware. For us, it is about trying to educate as much as we can. As I stated, we made significant attempts in that regard. We have always said that if something seems to good to be true, it probably is not true. On the investment side in particular, there are tragic cases where people made significant investments in things that are non-existent, especially in the area of crypto. People are looking at crypto as a get-rich-quick scheme.

Deputy Jim O'Callaghan

On that point, the Governor of the Central Bank appeared before the committee some weeks ago. Last year, I asked him whether he was concerned about crypto and he did not seem too concerned. When I asked him the same question this year, he expressed concern. He indicated that, in particular, he was concerned about the number of men in their 20s or 30s who were losing significant amounts of money in that context. Are they the type of victims Mr. Kelly is seeing?

Mr. Justin Kelly

We have seen a wide range. I do not wish to refer to individual cases in case people are identified but, for example, we have seen civil servants, people whom one would think would be traditional and conservative, retiring and putting money from gratuities and so on into things like crypto. There have been tragic cases where people’s whole life savings have been put into them. It is not just the demographic referenced by the Deputy.

Deputy Jim O'Callaghan

The Garda does not necessarily get involved if a person invests in crypto.

Mr. Justin Kelly

No. To be clear, it is very different from making an investment into something that does not provide a return. As we know, all types of investment carry risk. This is investment into things that do not exist. There are people investing in things that do not exist.

Deputy Jim O'Callaghan

Information and warning are important in order to deter this type of activity. The more that people are told about this, the more likely it is that they will have their guard up when it comes to responding to a fraudulent message on their phone. Should the financial institutions spend more money on advertising and warning people about this? They spend lots of money on advertising or sponsoring many things. Would it be beneficial if they devoted more of that money to warning their customers about the threat that is posed to them?

Mr. Justin Kelly

It would not be fair for me to comment on whether the banks are doing enough but, in general, more education and awareness-raising on this issue by everybody would be beneficial.

Deputy Jim O'Callaghan

In terms of what happens, Mr. Kelly discussed section 19 notifications with Deputy Doherty. Under section 19 of the Criminal Justice Act 2011, it is a criminal offence for a person to withhold information from the Garda if he or she has evidence of an offence being committed. If I am a victim of a crime and make a complaint to the Garda, I am then an individual complainant. Is there a difference in that regard? I presume that if I make a complaint, the Garda has to investigate it.

Mr. Justin Kelly

Absolutely, yes.

Deputy Jim O'Callaghan

If I do something on my phone and €5,000 is taken out of an account or something like that, what will the Garda do in terms of investigating that or its questioning of me?

Mr. Justin Kelly

Most economic crime offences are reported at local Garda stations. Some people may have a perception that everything comes to the GNECB but most of the incidents to which I referred, of which there are approximately 1,000 per month, are reported at local stations. Within every division, we have specialists who have the skills to investigate these reports. On top of that, we issue detailed instructions for our front-line people, setting out the steps to take if a person comes in to say he or she has been the victim of this type of economic crime, whether it is phishing or whatever. In addition, there are supervisors in place to ensure that is all done correctly. If there are particularly complex cases or ones that would overwhelm local resources, we have a system whereby they come up to the GNECB, which will either assist the local stations in those investigations by providing advice or personnel or, in some cases, take over the investigation.

Deputy Jim O'Callaghan

What is the average amount of fraud perpetrated through authorised push payment fraud?

Mr. Justin Kelly

Is the Deputy seeking a figure in euro?

Deputy Jim O'Callaghan

Yes, on an individual basis. Individuals who come-----

Mr. Michael Cryan

It is impossible to say. In investment fraud, for example, the figures can be very high. In accommodation fraud, the figures are lower. Romance fraud can fluctuate from very low to very high. As regards account takeover, it depends how much is in the victim’s bank account. It is impossible to say and it would be wrong to give an average figure.

Deputy Jim O'Callaghan

What is the incidence of people getting their money back from the fraudster? I suspect it is low.

Mr. Michael Cryan

It depends on the type of crime. The banks state approximately half is recovered in an account takeover type of offence, where the money moves from the person’s account to a money mule’s account. There is big success by the banks in recovering that money once they become aware of it quickly. In investment fraud, it is far lower because, unfortunately, it takes time for the victims to become aware they have been the victim of a fraud.

Therefore, the money is already well gone. It could be six or eight months before they report it. It is the same with romance fraud. It takes a victim quite a while before they become aware that they have been the victim of a fraud, so the money is gone. Business email compromise is also one, again, where we have quite a good success rate. Before Christmas we ran an operation, in conjunction with Interpol. Just over €3 million was reported stolen in 14 business email compromises and we recovered €1.7 million of it in banks abroad. Again it is a crime that is reported relatively quickly because the victim becomes aware of it and one can make contact very quickly with the foreign jurisdiction. The later the victim reports it the harder it is to recover it.

Deputy Jim O'Callaghan

For those victims who do not recover their money from the fraudster, is Mr. Cryan aware of the level of recovery they get from financial institutions?

Mr. Michael Cryan

Again, it depends on the type of crime and whether it is an authorised or unauthorised transaction. The answer to that is that I do not know. With regard to the takeover, it is quite high. With regard to the romance frauds and investment fraud it is lower because it is something the victim has authorised, as against unauthorised payment. Again, it depends on the type of crime it is.

Deputy Jim O'Callaghan

I will conclude by asking about the Garda national economic crime bureau staff. What percentage of the staff working within the bureau are fully attested gardaí and what percentage come from outside with expertise such as accountancy? Or are all of the staff gardaí?

Mr. Justin Kelly

The vast majority are gardaí. We have what one would call sworn gardaí. These are the traditional gardaí who came up through the system. We also have Garda support staff, forensic accountants and analysts. The vast majority of staff, however, are sworn gardaí. Obviously, while we need that expertise who are accountants and analysts, the majority of our work is investigation room work.

Deputy Jim O'Callaghan

I thank the witnesses.

Deputy Bernard J. Durkan

I welcome our guests and I apologise for my late appearance, which was due to attendance at another meeting. To what extent is the bureau in contact with other jurisdictions in order to identify potential attacks on security systems?

Mr. Justin Kelly

Is the Deputy referring to economic crime or cybercrime?

Deputy Bernard J. Durkan

All crime .

Mr. Justin Kelly

We have a number of different ways of doing that. We have very close relationships with Europol and Interpol. My colleague here would be on a lot of groups, not just working groups but also operational groups, where they target organised criminal groups working particularly across Europe. We have very close relationships with our nearest neighbours in the UK and its National Crime Agency there. We would be getting a very good picture around any emerging trends or emerging groups.

Deputy Bernard J. Durkan

What country in Europe, with which the bureau co-operates or remains in contact, has the best security policy in identifying potential attacks, and which has the worst?

Mr. Justin Kelly

It is difficult to answer that because our similarities are with the common law jurisdictions. As Mr. Cryan referred to earlier, one big difference between us and the lot of the European forces is that there is only one force here in Ireland. Even in the UK there are 43, so one can imagine the difficulties that some other countries have. I would be loath to say who has the worst. Perhaps Mr. Cryan could come in here as he attends a lot of the meetings. He may know who are some of the stellar performers

Mr. Michael Cryan

Without blowing our own trumpet, Ireland is probably as good as anyone, to tell the truth. It depends then on the jurisdictions. I have had operations with various countries. We had very successful investigations with the Finnish police a number of years ago and very successful operations with the Dutch police. Operations are ongoing with Romanian police as well. We also have successful ongoing operations with US authorities, with South Africa and with Hong Kong, which was mentioned earlier. A lot of the time it depends on the unit in the area, where they are, and with the different police forces and the expertise they have. I have no complaints about anybody that we deal with. We get great co-operation and we work very well with them. I have met police from every European country in the past four or five years, and other countries outside Europe as well including as far away as Australia and Canada.

Deputy Bernard J. Durkan

Would the witnesses agree that a possible deterrent might be a realisation by the criminals that this is a dangerous environment in which to work and that there is a good chance of being caught?

Mr. Michael Cryan

Absolutely, yes, especially with fear of prison. This type of crime is different from a lot of other crimes in that a person can sit in one country, commit the crime in another country, and can move and launder the money through a third country. One cannot do that with traditional crimes. No criminal wants to get caught and go to prison. A prison sentence as a deterrent absolutely works.

Mr. Justin Kelly

This is why it is very important for us. Mr. Cryan referred to some of the operations that we have been involved in during the past few years. Operation Skein is probably the best publicised one in the last couple of years. They are all multi-jurisdictional operations, co-ordinated by Europol. As Mr. Cryan has said, we can deal with the problem of somebody being in another country if we have several countries on board in the one operation, and if we have the one operational day or days of action around it. The Deputy asked about co-ordination and this is very important around economic crime. It is really important.

Deputy Bernard J. Durkan

Do all European countries have continuous surveillance of the various electronic methods for committing fraud of this nature, especially in relation to monitoring, identifying possible movement, chatter and so on?

Mr. Justin Kelly

Every jurisdiction has intelligence-gathering capabilities. A lot of information gathered around Europe by the police services would frequently come to us through Europol. Often, this is how we get our intelligence from other countries. We have our own national criminal intelligence unit that receives information from foreign jurisdictions. Whatever the type of information is, be it drugs, terrorism or economic crime, they will then analyse and disseminate that to the relevant people. For example, if there is interesting material coming from surveillance in another jurisdiction, it will invariably go on to our national criminal intelligence unit, which will disseminate it to us in the economic crime bureau and then we will move to the operational phase and investigate it to see what we can do with it here. Across the EU we are all quite similar in what we do around economic crime and how we gather information. As I have said, with some countries it can be a bit more challenging where they have different police forces in different jurisdictions around different things. That is one challenge we do have.

Deputy Bernard J. Durkan

Given that continuous dialogue is possible nowadays through electronic media, social media and so on, how do we address that issue? For example, it must be possible to identify movement in the underground, for want of a better description, at an early stage if something is in the offing. Do we have the facility? Can we link into that facility? Can we link into social media to monitor what is going on or no?

Mr. Justin Kelly

From an intelligence point of view, I would be slow to speak publicly too much about what we do on an intelligence front-----

Deputy Bernard J. Durkan

That is fair enough.

Mr. Justin Kelly

-----but I can assure the Deputy we take every avenue we can to identify organised criminal groups and their activities on how they are operating here, and how they are doing harm to communities here. We take every opportunity we can within what we are allowed to do in this jurisdiction. Other jurisdictions do things differently.

We obviously operate within the rules and the legislation we have here but I assure the committee we take and operationalise any opportunity we have to develop intelligence on how those groups work.

Deputy Bernard J. Durkan

I have one last question. Is Mr. Kelly satisfied that he has sufficient resources at his disposal to meet the challenges now emerging?

Mr. Justin Kelly

The GNECB certainly needs more resources at the moment but we have a plan for that. Therefore, we are working towards that. As Mr. Ryan made reference to earlier, the Garda Commissioner is responsible for the allocation of resources and he is absolutely aware of the draws and demands on all the various bureaus we have. As I said earlier, we could put more people into all of our national bureaus but we have to balance that with all our other policing demands. To answer the Deputy's question specifically regarding economic crime, we have a number of competitions under way so we will be putting more resources into this area in the very short term. We are going in the right direction around resources. One problem we have, which is not unique to us, is retention of staff. We have seen this with specialists in various area; not just in the area of economic crime but also in cybercrime. We see that there is a very attractive working environment outside the public service now and unfortunately we sometimes see some of our experts being headhunted, going to private industry, and even going to other arms of the State. That is another challenge we have but I do not think it is unique to us in policing and it is definitely not unique here in Ireland.

An Cathaoirleach

I will have to change the guard here in a moment. I am due to go to another meeting. Deputy Durkan will close out this meeting in the Chair. I thank the witnesses for coming in. It is a very interesting topic. I will ask a question before I go. Can the prosecution of fraud happen at any time or is there a statute of limitation?

Mr. Justin Kelly

There is no statute of limitation.

An Cathaoirleach

What about other areas such as money laundering and crime of that kind? Is that statute-barred?

Mr. Justin Kelly

No.

An Cathaoirleach

Therefore, in terms of Mr. Kelly's work, prosecuting someone in that area is time sensitive.

Mr. Justin Kelly

Absolutely.

An Cathaoirleach

When you get a tip or information, do you act on that, take it seriously and make an inquiry, or is it left to one side because it is anonymous?

Mr. Justin Kelly

Absolutely not, no. If we get anonymous information from any source on any type of crime, we treat it the same. We have to dig into it and analyse it. Over the years, some of our best results have been from anonymous information. One has to be rigorous around anonymous information that comes in but we would absolutely not disregard it.

An Cathaoirleach

These investigations can be dragged out over a period. Does Mr. Kelly think the legislation should be changed around the issues of prosecution to allow greater time to investigate so that an investigation does not run into a problem of being statute-barred?

Mr. Michael Cryan

They do not become statute-barred.

An Cathaoirleach

In prosecutions of fraud?

Mr. Michael Cryan

Yes.

An Cathaoirleach

I know that but in the other areas of crime-----

Mr. Michael Cryan

It is only summary offences that carry less than a 12-month prison sentence that become statute-barred.

An Cathaoirleach

Okay. So you are okay with that.

Mr. Michael Cryan

Anything that is indictable does not become statute-barred.

Mr. Justin Kelly

To answer the Chair's question, we would all like investigations to move to prosecution and conviction quickly but the reality of the criminal justice system is that it takes time. Again, that is not unique to this jurisdiction. There is a myriad of factors for that.

An Cathaoirleach

Mr. Kelly mentioned that he has a significant number of statistics available on the crimes and so on. Will he give the committee as much information as he can on the statistics, the facts and the figures he has in order to give us a sense of where he is and what he has on this type of crime? He could send it on to the clerk later on. It would help us as we put together the information we are trying to gather in our role as legislators and in ensuring the resources are made available to An Garda Síochána. I thank the witnesses for coming in.

Deputy Bernard Durkan took the Chair.

Deputy Pearse Doherty

I have a couple of things to ask for clarity on. We are doing a module on this. As we are stepping through it, we want to increase our understanding. We hope that if this is reported on or if people are looking in, it will show those who may be thinking of getting an easy couple of thousand euro for being a money mule that they will be apprehended, prosecuted and sentenced. It might also alert people to some of the scams.

I still do not understand the call by An Garda Síochána for people to come forward. I echo that call but is An Garda Síochána prevented from investigating even if people do not come forward? Mr. Kelly referred to under-reporting. I do not understand that. The banks are reporting the crime to An Garda Síochána, so how can there be under-reporting? By the individual coming forward, they should be just reporting the fraud which the bank has already reported to An Garda Síochána.

Mr. Justin Kelly

In some cases the individual may not report to the bank. For example, someone might get involved in a romance fraud. They are invariably deceived out of a significant amount of money and may not report that to the bank. If it is not reported to the bank, the bank has no way of sending the information to us.

Deputy Pearse Doherty

Okay. In all cases where the bank has identified the fraud, it reports it to An Garda Síochána and there is no requirement on the individual to make a report or on An Garda Síochána to investigate.

Mr. Justin Kelly

There is no requirement on the individual person. As Mr. Cryan mentioned, we sometimes get double reporting when the bank reports it to us and the individual also reports it.

Deputy Pearse Doherty

We have been talking about APP frauds. As An Garda Síochána does not categorise the figures in the same way that the BPFI does, obviously there are some issues in that regard. When Mr. Kelly presents the figures, we may be able to delve through them. When we spoke about APPs, we were looking at about 3,600 transactions in 2021. If we look at unauthorised payment fraud, according to the BPFI there were 165,000 incidents in the first half of 2021. Surely to God that would mean there were probably about 300,000 incidents across that year as a whole. They are not all investigated, are they? They could hardly be investigated.

Mr. Justin Kelly

No. For us to run an investigation, whatever we have on our PULSE system is then deemed to be an incident. We must have an incident on the PULSE system and the investigation comes from that. That figure I gave of 800 to 1,000 a month is how many investigations we initiate per month. If one extrapolates that across the year, it is approximately 12,000 full investigations.

Deputy Pearse Doherty

I will stop Mr. Kelly there. Obviously I do not operate behind the desk there and I am trying to figure this out. In terms of unauthorised payment fraud, there are about 300,000 incidents per year. These banks have to repay the individuals because that is the guarantee they have with their credit or debit cards. These are incidents of fraud. Surely under section 19 they would all be reported to An Garda Síochána. Would that not be the case?

Mr. Michael Cryan

As there could be ten faults on one person's card, it is difficult to get the exact figure. Many people's credit cards - Visa cards or whatever - are with American banks. I am not sure if they come under the BPFI's responsibility or if other banks come under it as well.

Mr. Justin Kelly

They would.

Mr. Michael Cryan

As I said, there could be duplicate reporting.

It could be reported three times, believe it or not, because it moves from bank to bank and both banks may report it.

Deputy Pearse Doherty

I take on board that we may be dealing with foreign banks and the fraud happened online so it is a matter for where they are domiciled. There may be issues in relation to that and, as Mr. Cryan said, numerous attempts regarding one person's card or account. Outside of that, even with those exceptions and even if the number was as small as 2,000, if they are frauds, they have to be paid back. They are reported to the Garda by the banks. Does that mean they go onto the PULSE system?

Mr. Michael Cryan

I know from dealing with one particular bank that they come to us and we then send them out to local stations for investigations. They will be put on PULSE and investigated to the best of the ability they can be. If it happened online and there was a payment wherever, it is difficult to investigate if the injured party has no knowledge of where his or her data was stolen or hacked and it was used abroad to make a purchase or do a delivery or whatever in a foreign country. Yes, they are recorded and there is a PULSE number.

Deputy Pearse Doherty

If my debit card details were compromised and somebody bought whatever it was - a jacuzzi - in Bermuda using my card, the bank would pay that back to me because it was done through my card and it was an unauthorised payment. I am reimbursed the €6,000 for the jacuzzi they are now lying out in in Bermuda. The bank, as part of its reporting, then notifies Mr. Cryan's division that there was a fraud and my card was fraudulently accessed. Is that correct?

Mr. Michael Cryan

Not necessarily to us, no. It could be to a local station it reports it to.

Deputy Pearse Doherty

Okay. To the Garda.

Mr. Michael Cryan

Yes.

Deputy Pearse Doherty

The point is, the Garda will be notified that Pearse Doherty's card was fraudulently accessed for a purchase. It goes on PULSE. Is that correct?

Mr. Michael Cryan

I cannot say that every one of them is reported, no.

Deputy Pearse Doherty

That is what I am trying to figure out.

Mr. Michael Cryan

I cannot say that every one of them is reported.

Deputy Pearse Doherty

This is an important part. Maybe it is impossible. We could just overwhelm the Garda if we were to do that; I am not sure. I would like to know the process regarding whether they are all reported. If they are reported, then-----

Mr. Justin Kelly

It is a bit outside of our knowledge whether every one the bank gets is reported to us. Every one that comes to us is either investigated by Mr. Cryan's unit or it goes to a station. All of those section 19 matters go to someone for investigation.

Deputy Pearse Doherty

My local station is Bunbeg. Hypothetically, this person has bought a jacuzzi somewhere using my card details. I have been recompensated by AIB or whatever bank the card was with and the local station has now been notified. What happens in that instance?

Mr. Justin Kelly

We have rules around where the location was between where you live, where the fraud happened and where you think the card was compromised. We have rules around that to instruct people where it is investigated. That is the first thing. Once it goes out to local stations for them to investigate, we have detailed instructions for them on how to do it. Invariably, some are very difficult to investigate for all the reasons the Deputy set out. That is the reality of this type of work. For us, it is important we know about it and that we know the trends going on. We could get some small piece that fits in the larger, upstream work we are trying to do to disrupt the groups. For us, it is still really important that people come forward.

Deputy Pearse Doherty

I agree. I do not underestimate the challenge in relation to this and the ability of fraudsters to launch attacks at scale. The analogy about whack-a-mole is a real one. There has been success in some of this activity in the past year, but that is also measured against the Covid period during which there was a massive amount of online retail. If Covid is stripped away and we look at 2019, we are up 90%, even with the drop last year.

The witnesses have mentioned before that there are 4,000 money mules associated with the investigations in hand. Are those figures increasing or decreasing in the view of the witnesses? I have seen some of the reporting on this and people before the courts perhaps receiving suspended sentences and so on. Through the court system, we are able to find out that somebody was offered €3,000 or €4,000 for allowing their account to be accessed. There is an important job for the media in this regard to send out a signal that this is not just easy money, that it is a criminal conviction and they could face 18 months or so in prison. What is the witnesses' message to the money mules? I know the Garda raised the issue with the Minister for Further and Higher Education, Research, Innovation and Science, who happened also to be the Minister for Justice for a period. There are also older people becoming involved in money muling as well. What is the witnesses' message to money mules?

Mr. Justin Kelly

I will ask Mr. Cryan to comment as he deals with it on an operational level but I also have a few comments. The message we have been trying to get across is, as the Deputy rightly said, it is a criminal offence. It is money laundering. You can go to prison. You will have extreme difficulty ever opening a bank account again after this. Many people do not realise that sometimes there is never a payment made. It is a promise of a payment if you do something and, if you let someone use your bank account, there will a payment. Often, there is never a payment made. We have also seen cases in which it goes from the online world to the real world. It goes from wanting someone to do something with the account to wanting the person to cash out the account. It is not just about transferring money. It is going to the machine, taking the cash out and physically meeting someone. That brings it to a whole other level whereas people think it is just moving money around. We have also seen people who have not done what they were told being threatened with violence. Those are the types of messages we would like to get out. The number of money mules - I would not like publicly to put a figure on it - is significantly higher than the number the Deputy referred to. I will ask Mr. Cryan, who deals with it at an operational level, to talk about the message he would give.

Mr. Michael Cryan

I have done a lot of appeals and awareness campaigns through the media telling people, basically, not to be a money mule. There are huge ramifications, particularly for young people, in being money mules quite apart from the conviction, potentially going to prison and the bank account issue. There is also travel - visas to travel and to work. A money laundering conviction is a very serious conviction to have. You are also getting into bed with serious organised crime. The money from this type of what we call cyber-enabled crime funds other criminality. It goes back to transnational organisations worldwide. It funds all sorts of criminality and corruption. It pays the bribes in other countries. Profits made worldwide from these types of crimes are in the billions. This is who you are getting into bed with. As the assistant commissioner said, money mules are now being forced to go to the ATMs, take the money out, go into their own bank accounts and try to spin a story to a bank official as to why the money should be allowed to move. They are being brought into shops to make purchases of high-end goods and their own accounts are being cleaned out. If you give control of your bank account to a criminal and, for example, €10,000 comes in and you had €2,000 in it, he will also take the €2,000 already there and you will not get the money you were promised. As I said about many of these cases, all the money mule gets is an arrest and a conviction.

Deputy Pearse Doherty

I have seen some of the cases that have been in court, including in my own county, and exactly that occurred. It is not just a transfer online. It is a presence locally, taking the cash out and the checks and balances from the banks, which ask how that person ended up with €15,000. Many people think it is quick cash and all the rest, but if there is €20,000 coming into your account overnight, the banks will ask you where you got those funds. Anybody who thinks they will not ask those questions is wrong.

I want to ask about the type of structure in place.

A lot of people think that this is outside the country, which it may well be, and organised at a high level but in a lot of the cases I have seen reported, it has been friends or acquaintances who approached people. It is a structure on the ground. It is like a massive network and while a lot of it is happening online, there is also a physical presence on the ground. I ask our guests to talk to us about where this activity is based, both domestically and internationally, and the type of structure that has to be disrupted to bring it to an end.

Mr. Michael Cryan

In my experience, the vast majority of money mules are recruited in one of two ways. One is through social media, where there are advertisements about making easy money and so on and the other is through personal interactions with people they know. They are recruited through an offer of easy money or through a sob story and they become a money mule. The people who recruit them are called herders. They are money mule to money mule herders and they are usually based locally, somewhere in Ireland. There are other levels above them and as the levels go up, some still involve people in Ireland but those at the very high levels are most probably outside of Ireland. We have arrested or been involved in the arrest of up to 100 people who are at money mule level or higher in the organisations. Quite a few of them have been charged and are before the courts so we obviously will not go into any specific details. Quite a few of them have been convicted as well and are serving prison sentences. The organisations are very structured and people have different roles within that. Some people have multiple roles so the money herders, for example, may also perform other roles like making withdrawals and so on. A lot of the herders start off as money mules and move up within the structure.

An Leas-Chathaoirleach

I thank the witnesses for coming along and sharing important information with us. Many people have been victims of fraud of the types we have been discussing and the committee may return to this issue at a future meeting, to monitor progress and see how we are getting on in this particularly sensitive area.

The joint committee adjourned at 3.12 p.m. until 1.30 p.m. on Wednesday, 14 June 2023.