“On the heels of the very successful Association of Certified Fraud Examiners (ACFE) conference last month comes an industry event which represents investigators of financial crimes and fraud. The International Association of Financial Crimes Investigators (IAFCI) meets in Washington, DC next week with an agenda that is chock full of sessions involving discussions of best practices for solving and preventing financial crimes.”
“In a recent report, Light noted that the key to successful fraud mitigation with technology is applying a combination of several methods - including the typical red flag approach, predictive modeling, neural networks, profiling, claims databases and identity matching - to ‘maximize the identification of true positive fraudulent claims and of true negative fraudulent claims.’”
“Robert Riegle from the Department of Homeland Security describes fusion centers as force multipliers. ‘They leverage financial resources and the expertise of numerous public safety partners to increase information awareness and help our law enforcement agencies more effectively protect our communities.’”
“L&I works extensively with state and federal law enforcement, and other regulatory agencies to detect and prosecute individuals committing workers’ comp fraud, contractors failing to register with the state, and businesses that wrongly classify workers to cheat on insurance premiums. Some investigations lead to criminal prosecution. People tend to think fraud only involves workers cheating the workers’ comp system. But in reality, millions of dollars are lost when employers, medical providers and contractors commit fraud.”
On the heels of the very successful Association of Certified Fraud Examiners (ACFE) conference last month comes an industry event which represents investigators of financial crimes and fraud. The International Association of Financial Crimes Investigators (IAFCI) meets in Washington, DC next week with an agenda that is chock full of sessions involving discussions of best practices for solving and preventing financial crimes.
One thing for certain is that there is no one “right” answer to prevention and investigation. As I pointed out in a previous post here, it is clear that predictive analytics technologies have been a valuable tool for organizations to “catch” fraudsters based upon their behaviors. With more and more organizations adopting identity resolution technology, however, those “best practices” are becoming even better.
Identity resolution technology goes at the heart of who’s who… and who’s working with whom… by “gliding” across an organization’s data (internal and/or third party) and searching for those tiny pieces of forensic data attributes that are the golden nuggets of financial crime investigation. Identity resolution helps investigators understand the identity matches and non-obvious relationships between individuals across enterprise data – despite input errors or deliberate attempts to deceive.
In combating financial crimes, identity resolution technology has become the next big ‘thing’, as it provides answers to the following types of questions:
Does someone in an incident database resemble someone in another database… and who else is connected to them?
Is the witness in an insurance claim suspiciously similar to someone in the SIU data?
Do credit card applicants share subtle attributes that would point to bust-out fraud?
Does the loan applicant have a non-obvious relationship with an employee? Or a known fraudster?
How is the stock trader connected (by degrees of separation) to an insider?
Is an applicant somehow connected to a Denied Person?
Infoglide Software Corporation, the leader in identity resolution engine technology, will be attending IAFCI next week and we would encourage you to drop by our booth and say hello. Otherwise, drop a note to sales@infoglide.com and I will have someone reach out to you directly to explain how this all works.
“Medicare fraud and billing errors costs the government more than $36 billion last year, the Economist noted. The modus operandi involves a “care-provider” billing Medicare for non-existent or unnecessary services. These services and items include: HIV/AIDS medicines and therapy; medical equipment such as wheelchairs to neck and knee braces, as well as home health care, physical and occupational therapy and mental-health services.”
“Another method used by organized crime is to pay a 10 per cent premium for winning lottery tickets or to buy jewelry in Canada worth tens of thousands of dollars and sell it in the U.S., achieving money laundering and foreign exchange conversion at the same time.”
“Each center can have an individual purpose, McManus said. The South Texas center will have two branches: one working on homeland security, bolstered by a new San Antonio Police Department Terrorism Criminal Intelligence Division, the other a 24-hour tactical operations center for ‘all crimes and all hazards as they occur in San Antonio and the region.’”
“Schurke said a fraud-prevention effort launched in 2005 has increased collections dramatically. Collections due to L&I investigations have increased 40 percent, to $770 million. The department has invested in advanced computer technology that should make it easier to track down employers who are not reporting fully. The systems will make it possible to compare 20 state and federal databases, including the IRS.”
“At the national level, the number of potential fraud cases continued to rise throughout the first half of the year. Figures released last week by the Illinois-based National Insurance Crime Bureau show a 14 percent increase in questionable claims of the year in four of the six categories the agency tracks… Nationally, reported incidences of suspected organized insurance fraud cases grew 65 percent to 1,837 cases during the first six months of 2010 compared to the same period in 2008, according to the National Insurance Crime Bureau.”
“The initiative makes Maryland among the first nationally to establish a statewide network for data generated from license-plate readers. While the devices have not endured regular scrutiny and occasional opposition the way public surveillance cameras have historically, the technology in many respects is more powerful. Privacy advocates warn that plate recognition enables police to document where drivers go – both guilty car thieves and innocent citizens alike – by registering their GPS locations when each license plate is scanned. Police need reasonable suspicion that a crime has been or will be committed for much of the contact officers have with the public, at least in theory. But laws that restrict data gathering by law enforcement don’t always keep up with the 21st century.”
“American authorities are investigating the U.S. division of global banking group HSBC over its compliance with anti-money laundering procedures, according to a regulatory filing… ‘These examinations and inquiries pertain to, among other matters, our global banknotes business and our foreign correspondent banking business, and our compliance with the Bank Secrecy Act, Anti-Money Laundering and Office of Foreign Assets Control requirements,’ the filing said.”
“Violent criminals and mobsters are also tapping into the scams, seeing Medicare fraud as more lucrative than dealing drugs and having less severe criminal penalties, officials said. For instance, agents bugged a medical center in Brooklyn, N.Y., where eight people are charged with running a $72 million scam that submitted bogus claims for physical therapy for elderly Russian immigrants. Clinic owners paid patients, including undercover agents, in exchange for using their Medicare numbers and a bonus fee for recruiting new patients.”
“Interest in entity and identity resolution have been growing because they are key processes in the current movement to create information exchange hubs in health care, law enforcement, education, and the military… He also announced that the ERIQ Research Center will launch an open-source entity resolution project called OYSTER to be available on Source Forge later this year.”
“Someone can put many $20 bills from drug dealing into a casino slot machine, press the ‘cash out’ button on the machine and use the slip produced to get a cheque from the casino’s cashier. That produces a legitimate cheque without a direct transaction with a human being who might raise questions. FINTRAC expects casinos to combat this by noting the identity of anyone who receives a cashier’s cheque over $10,000, and reporting the transaction to the federal agency.”
“‘Now there are 72 fusion centers around the nation, analyzing and disseminating data and information of all kinds. That is one for every state and others for large urban cities. It’s connecting the dots. That’s what the thing really is,’ said Sen. Tom Wyss, R-Fort Wayne, a state and national expert on the center.”
“Wachovia admitted it didn’t do enough to spot illicit funds in handling $378.4 billion for Mexican-currency-exchange houses from 2004 to 2007. That’s the largest violation of the Bank Secrecy Act, an anti-money-laundering law, in U.S. history — a sum equal to one-third of Mexico’s current gross domestic product.”
“The identification of the patient is not always accurate in healthcare. Information for one individual may exist in one or multiple databases where it resides as ‘duplicate,’ inaccessible or unknown to those needing to see the complete or most current picture. Due to administrative errors, information on two different individuals can be ‘overlaid’ and presented as one person’s record. Linking the wrong clinical information to a person not only can cause great personal harm to the patient, but also can incur huge costs to the healthcare provider in correcting and mitigating the error.”
“‘By working with our partners across the globe, we have achieved historic advances in international aviation security – including bolstering explosives detection, strengthening the vetting of passengers against terrorist watchlists, refining passenger screening techniques and deploying tens of thousands of trained aviation security personnel—that make air travel safer for everyone.’ Among other things, the report showed that aviation security received a large boost with the implementation of Secure Flight for 100 percent of passengers flying domestically and internationally on U.S. airlines.”
“The Donaghey College of Engineering and Information Technology at the University of Arkansas at Little Rock (UALR) will host the 15th International Conference on Information Quality (ICIQ) on November 12-14, 2010. The ICIQ attracts researchers and practitioners in the academic, public and private sectors from across the globe.”
“Lottery officials say the Lottery’s Office of Security is a statewide program developed by the Lottery and executed in cooperation with local law enforcement authorities. It is designed to protect Lottery customers by ensuring that winning tickets are not wrongfully claimed by retailers or their employees without payment to the customers. The program, a sting operation in which Lottery investigators posing as customers present tickets to be checked, is ongoing and is expected to yield additional arrests.”
“U.S. property/casualty insurer financial impairments have more than tripled since 2007, the last full year before the current recession, rising to 18 in 2009, up from 16 in 2008 and from five in 2007, according to a recent A.M. Best special report (BestWire, June 22, 2010). A.M. Best has found over the past 41 years of this study that the financial impairment frequency typically rises during and shortly after periods of economic and financial market stress.”
“Updated anti-money-laundering regulations, pending trade-reporting rules and new custody rules for advisers are some of the initiatives that are raising questions about the division of compliance responsibilities. ‘Some of those lines [of responsibility have] blurred as regulators focus on anti-money-laundering,’ said Jeff Horowitz, director of compliance at Pershing. ‘Anti-money-laundering has morphed into anything to do with fraud, manipulation or low-priced securities.’”
“A recent article written by IAIABC Executive Director Greg Krohm does a great job of analyzing the effects that the Patient Protect and Affordable Health Care Act of 2010 (aka Obamacare) and the American Recovery and Reinvestment Act of 2009 are expected to have on the cost and administration of workers’ compensation programs.”
“A recent video story on KING5 in Seattle highlighted the aggressive efforts state agencies take to ferret out employment fraud. This particular story highlights an agency’s success in identifying and prosecuting unlicensed contractors. Such willingness to work around licensing regulations can also signal a cavalier attitude about providing workers’ compensation insurance to employees as required by law.”
“The IOC-2 is co-located at the Organized Crime Drug Enforcement Task Forcefusion center and the DEA’s Special Operations Division Command Center, which are both in northern Virginia. Partner agencies meet in a task force setting where they provide information and intelligence reports that might pertain to international organized crime. When Holder announced the center, he also emphasized the importance of continued cooperation with foreign law enforcement through existing police-to-police and mutual legal assistance mechanisms.”
“The state of Kansas has been conducting ’sting’ operations to prevent this kind of theft by lottery terminal clerks. Law enforcement agents fanned out across the state and presented ‘winning’ tickets at several retail lottery outlets. In five separate cases clerks told the agents the tickets were worthless and then tried to redeem the ‘winning’ lottery tickets. The undercover investigation led to charges of attempted theft and computer crime against five people across the state. Lottery officials across the country advise lottery players to check their own tickets.”
“Costa said that a more effective fight against the crime syndicates requires shifting ‘focus from disrupting the mafias to disrupting their markets’ through tighter measures to combat money laundering and corruption. He also suggested cracking down on the accomplices of crime ‘like the army of white-collar criminals — lawyers, accountants, realtors and bankers who cover up and launder their proceeds.’”
“Crown prosecutors said they will likely be able to collect about $6.1-million, about $450,000 less than what Mr. Malik owes from the original winnings, including interest. That money will be returned to the Ontario Lottery and Gaming Corp., which paid the money to the real winners, plus interest, when it discovered Mr. Malik’s fraud.”
“ICE’s experience in trade-based money laundering investigations has shown that one of the most effective ways to identify instances and patterns of trade-based money laundering is through the exchange and subsequent analysis of trade data for anomalies that would only be apparent by examining both sides of a trade transaction.”
“McClain heads up Contractor Compliance for the agency and has just 27 inspectors to cover the state. The agency registers 55,000 contractors each year, so reigning in folks like Mulinski is a difficult task. ‘Finding them working on a job site is a real challenge,’ he said. Once we find them there, knowing that they are registered, who are employees and who are workers?’”
“Department of Homeland Security (DHS) Secretary Janet Napolitano today announced that 100 percent of passengers traveling within the United States and its territories are now being checked against terrorist watchlists through the Transportation Security Administration’s (TSA) Secure Flight program—a major step in fulfilling a key 9/11 Commission recommendation.”
“The center, which is housed in the FBI’s Fort Myers office near Gateway, is designed to digest and compare data from across the region. Once complete, Storrar said the center will help local officials bridge jurisdictional, historical and technological barriers. It will help law enforcement, fire and health officials look for red flags, connect dots and provide threat assessments, Storrar said.”
“In the case of Teodoro Nguema Obiang Mangue, the son of the president of Equatorial Guinea, the report said two lawyers helped him bypass anti-money-laundering laws by allowing him to use shell company accounts as conduits for his funds without telling U.S. bankers that Obiang was using the accounts. ‘If a bank later uncovered Mr. Obiang’s use of an account and closed it, the lawyers helped him set up another,’ it said.”
“Officials said health care providers at the centers who demonstrate ‘meaningful use’ of EHRs could be eligible for federal incentive payments through Medicaid and Medicare.”
Infoglide Software provides entity resolution and analysis solutions for retail, banking, insurance, government, and law enforcement. Without the need for data cleansing or warehousing, Infoglide Software's Identity Resolution Engine™ (IRE) analyzes all of the information relating to individuals and/or entities from multiple sources of data and then applies...
Subscribe to this blog