FraudJournal Blog

May 12, 2010

Copiers Contribute To ID Theft

Filed under: Author's Post,Fraud,Fraud Alerts — fraudjournal @ 10:07 AM

One of the ways fraudsters get better at their jobs is by bloggers and media explaining how fraud is committed. The internet is the best archival source of anything and everything you could possibly want to learn. Having said that, it also is one of the best ways to educate the general public and in my case, share info with those who are focused on fighting fraud.

Today, I was forwarded from a colleague at a video she received from another colleague at The original video was aired by CBS News in April 2010 about the security risk of personal and commercial information stored on the hard drives of copy machines. Most of us know that computer hard drives can be searched using forensic software for information during investigations. But most of us don’t think about all the copy machines we use either at a drug store, library, school or copy place. Often these machines are leased and when no longer needed or out dated, are returned to be refurbished and then resold. They usually go over seas at the low prices of under $500 each since they are bought in large quantities at a time to be resold in smaller shops for local businesses.

In the defense of the Copier Manufacturers (such as Sharp as stated in the video), some offer a separate package to erase the information from the hard drive to reduce security risk. Most businesses however, find this cost unnecessary or too expensive at the time of the purchase. It could also be that the sales agent, doesn’t know or offer this. So it is important to know about this and to ask if the package or add-on is available. The bottom line is it’s up to each of us to manage our own personal and business identity risk.

I chose to add this post to the blog to initiate discussion and to get everyone to ask the question about where they last copied a document containing private information, and to inform other as well as their place of work about this risk. Same goes for those recycling places. It isn’t up to them to keep your information safe. Have the hard drives of any pieces of technology cleaned before handing them off. This includes cell phone, video cameras, computers and copiers. Most of the information requires sophisticated software to remove the data and put it into a format that is readable to you and me, but we all know that fraudsters manage to locate and utilize unusual methods tools for their trade. After all, they have the time to do nothing but be creative about their means and methods.

Your homework is to verify your own information security risks. Go to the links below to see the video.


May 6, 2010

Fraud-America’s Financial Termite Infestation

Filed under: Author's Post,Fraud,Fraud Trends,Insurance — fraudjournal @ 5:12 PM
Tags: ,

One of the reasons I started this Blog was to keep people educated, connected and supportive of those fighting fraud. I share trends and information to keep everyone updated and to initiate discussions. One of the latest discussions is a direct reflection of the economy and the impact on those that investigate and prosecute fraudsters.

As law enforcement and the legal system becomes more and more inundated with fraud cases, and their budgets and manpower continues to be reduced, fraud victims are finding they are left on their own to do the leg work to get their cases heard. Insurance companies no longer cover fraud loss without a conviction, and financial institutions consider fraud the cost of doing business. This puts the general public and business owners in limbo as they try to determine whether it’s worth it to prosecute or just be made whole by mediation/restitution; which means the fraudster gets to go on to greener pastures.

The best way I can describe this scenario is to consider fraudsters as financial termites that eat away at the foundation of our economy. If the house next to you does not to their due diligence to reduce the risk of or stop fraud, the infestation is able to travel from house to house to house until they bring down an entire area. And just like pest exterminators, fraud fighters want to go after the top termite. The little soldiers that get sent out to search and destroy definitely do their damage, but they can get replaced on a regular basis.

And this scenario works for identity theft, white collar crime both big and small, and terrorists (which many fraudsters are connected with). Osama Bin Laden doesn’t have to walk into a bank to get money. He just has to get his soldiers to commit ID theft enough times to fund a beginning of a cell’s activity. Does this pop your eyes out of their sockets yet? It should.

At a recent fraud conference, I spoke with investigators, detectives, and other CFE’s about how they were dealing with the increase in fraud. Most of them looked like they could cry. Or get spitting mad. They were embarrassed that they couldn’t even provide a fraud victim with a decent answer of when and how they would be able to get to their case. “It’s physically and mathematically impossible for seven detectives to investigate over 8,000 cases a year,” Sergeant Justin Newsom stated to Amy Johnston of KVUE News in Austin, Texas, in an article from December 16, 2009 on the internet (1). Yes, that was in 2009.

So what is the purpose of this post you ask? Well, it is to let you know that fraud is on the rise and the general public needs to understand that a case number is no longer sufficient to get their fraud case handled or paid by insurance companies. Each State, City, County or Town has their own criteria for what makes a fraud case sexy enough to handle. Just like the FBI, if its big dollars and they can pull down more than one individual, they are more likely to get the case to go up the ranks to get funded for handling. That means, those cases that seem big money to you and me, may not meet the criteria and end up being set aside when they have more time or more funding or manpower.

In January 10, 2010, Levi Pulkkinen of the Staff posted an online article reporting on MV Maersk Inc. getting hit by an embezzler to the tune of an estimated $263,000 dollars. You may remember the company as they were hit by pirates off East Africa last April. The embezzler, a Sumner resident (located in Western Washington State), did so from about June 2006 to June 2009, when she was terminated. Prosecutors stated she repeated the frauds at least 116 times. (2)

So my request, nay my expectation after you all read this, is to do your homework. Take a hard look at your business and personal life. Do you know who to contact if you suspect fraud? Where would you go to report fraud? How at risk are you? And what can you, the general public and hard working Americans do to help your fellow fraud fighters? If it means contacting your local and state government then do it. If it means contacting someone show can assess your fraud risks, then do it. Take a moment, and consider what you would do to protect your home from termites, and then how that translates into fraud control in the house of American business and personal safety.

Here are the articles referenced and some sites for more information/education:

  3. For references for find a CFE for fraud risk assessments
  4. For information on Consumer ID Theft information
  5. For more information of fraud scams

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