Page 8 - Carbon Frauds and Corruption

CARBON FRAUD No laughing matter...

THE CERTAINTY OF FRAUD
The 'Carbon World' has already been the target for opportunists as well as organised criminals,
money launderers, confidence tricksters and narcotics dealers. One fraudster boasted:
“Carbon trading..... don’t laugh..... we have arrived in Paradise”

Over 90% of offset projects (Clean
Development Mechanisms and Joint
Investments) are in countries that
rank at the top of the Transparency
International's league of corruption.
Frequently developers and investors fight
each other to find "low fruit" potential
projects. This clamour, coupled with
the indigenous levels of corruption,
is a recipe for disaster.

It is ironic that at the front end of projects
a vast bureaucracy checks every line but at
the sharp end everything depends on simple
measuring equipment (such as flow meters,
basic computer processors, manual tests
and thermometers) which are easy to
manipulate- and on lowly paid manual
workers and verifiers whose salary may
barely reach survival level.
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On 2nd June 2009 daily trading volumes
on the French BlueNext exchange hit
19.2 million spot contracts against a daily
average of 2.2 million. After the French
authorities took action trading
volumes declined by 133%.

“ He's just so thankful it qualified as an offset project”

In 2009 a number of very serious frauds were discovered in the European
Union’s Emission Trading Scheme (EUETS) which allegedly incurred losses
of VAT (effectively a sales tax) in excess of €7.0 billion. The majority of the scams
Recent Experience centred on a sophisticated carousel, where fraudulent, dummy companies joined
one or more of the European Union’s “Registries”, bought “carbon credits”,
and sold them +21% VAT before absconding without accounting for the tax.

When the fraud was brought to an end, by the arrest of the participants,
the volume of transactions on the Danish Carbon Exchange dropped by
90% overnight.
90% of transactions
were fraudulent So far, little has been said about the investors (who apparently bought credits
with a face value of over €45,000,000). But there are concerns that some are
holding worthless instruments that may have been bought though collusion
by their own employees.

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