FraudJournal Blog

April 9, 2014

“My website was hacked & on sale…”

Filed under: Author's Post,Fraud,Fraud Alerts,Fraud Schemes,Fraud Trends — fraudjournal @ 2:43 PM
Tags: ,

There are multiple stories of identity theft, embezzlement and other sad stories of lives undone and upturned by fraudsters. What you don’t usually find is a well written article from the victim stating the shock and surprise of finding out via ‘luck’, from someone who was paying attention and informed them. You also don’t usually find a well written article that helps you understand the seriousness of the situation and the long and required attention to details to doggedly follow the trails and fight the good fight of stopping and retrieving back their life and this case, their livelyhood.

Please take time to read through this person’s website article by Jordan Reid of Glamshackle Glam. She is articulate and shows the fiery spirit of an entrepreneur fighting for the right to make a living online.

Keep up the fight against fraud. Trust but verify.

 

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April 13, 2013

What Makes a Fraud Investigator a Professional – Experience or Education


Fraud Fighters Become Cool!

As the economy continues to sequester most of us, fraudsters seem to be engaged in an all out frenzy of activity. Today you can’t seem to get away from reports of economic losses caused by embezzlers, identity thieves and scams on the vulnerable. This has resulted in a public outcry of “not on my watch.” And the response is government agencies, such as the IRS and FBI, are hiring people proficient in IT and financial fraud. Companies now search for individuals trained in fraud-risk-compliance. So who are the next wave of fraud professionals? Where are they coming from? And, how does this effect those of us already in the trenches?

First, the next wave are a mixed set of young professionals and re-established professionals. Many are students who have been drawn in by television shows such as CSI, NCIS, Bones and the numerous real-life drama shows on forensics and assorted documentaries. Others are established professionals that are either looking forward to making a career change, enhancing their current position or putting out a shingle as self-employed. What was once a profession of unknown behind the scene investigators has become the “now” profession. I am often asked about fraud fighting and how to get into the field. Most of my answers tend to result in raised eyebrows or dropped heads of frustration once they learn that the road requires not just a degree, but years of work and life experience and a high level of intuition and common sense. It’s not glamorous and a win every time. There are no hero medals and it’s tedious and requires high attention to detail. Something which I find many young professional are frustrated with in the beginning.  If you Google what it takes to be an expert, you find it takes close to 10,000 hours of practice or work experience for anyone to become considered an expert in their field of choice.

Second, quite a few colleges challenge this by advertising they can get you there with a degree in forensic accounting, criminology or fraud expertise. Many students are now able to earn their business or accounting degree with an emphasis in fraud. Some earn a certificate or added credential/degree in fighting fraud. I endorse educating the masses on how to thwart the creativity of thieves but it does not replace experience.

Learning the theory of detecting, deterring and defending against fraud provides a good base from which to launch the beginning of a career through internships and mentored case work. Expertise allows one to think outside of the box because experience has repeatedly engrained their understanding to a level that is second nature while maintaining their ethics to work within the required rules and regulations. And with time and diversity of experience, either across the board or in a specific arena of understanding, there remains the levels of novice, advanced, master and expert.

I Have a Point – Honest…

Here is my point; fraud work is a field that requires not just classroom education but repeated experience, careful mentoring and the passion to roll up ones sleeves, get into the dirt of the devil’s activity and all the while remain clinical. It is about making a difference while serving the public.  As individuals seek out the next trend in careers, they look for what brings income while raising peer acceptance. Young professionals seek out the career goals that take them forward in both income and position. And those that are stymied by hiring freezes and worse sudden income loss seek out ways to reinvent or augment the current situation. This means that there are many more people focusing on the world of fraud fighting but lack the necessary level of skills. This concerns me.

This is not about being competitive. It is about the safety of the public including those impassioned to enter the field of fraud fighting. There is a high level of liability that fraud work brings. Technology growth is constantly challenging our knowledge base not to mention the ever-growing level of global connection. The subtleties of culture, ethics and business models come with job maturity and work diversity. Knowing when someone is being polite by not looking you in the eye verses being nervous and avoiding eye contact can change the way investigative interviews are conducted. One must also consider the sequestering  of public agencies and enforcement officers resulting in the near stuttering to a stop of processing growing crimes.

Grassroots Solution?

I would like to challenge state and local government agencies to consider establishing internships for professionals (with proper vetting of course), to handle the back load of financial crime work. I would like to see a community grassroots approach of the educational system with the work programs that allow work experience that offsets educational costs, which would provide serious young professionals the opportunity to gain real-life lessons-learned experience. By establishing a contractual agreement of a time period for and vetting, we could put many individuals into the field with both mature and novice experience together. Establishing a certification program that also requires work experience for credentials and a mentoring process that signs off on professional understanding will provide both work, education and strongly enforced ethical standards for work ethics and case work. It takes the overwhelming level of paperwork and case load to a more manageable level and helps ensure that new professionals are properly trained and given the diversity of case experience.

What are your thoughts? How would you provide a means to education coupled with mentoring and job opportunities while maintaining the high level of expected ethical standards? Sound off!

 

October 10, 2011

Calling All Detectives…Elder Exploitation Really is a Crime


First, I want it on the record that this posting is about one or two individuals who felt elder exploitation was not a crime, but rather a family matter. Whether or not they thought about their response in detail it still makes one wonder just the same; what are you thinking?

I have been assisting from time to time on a particular elder financial exploitation case, where the children are exploiting their mother. And here is the kicker. We are having trouble getting the detective to accept the case because this is a family matter and law enforcement are about catching and putting the bad guys in jail; not resolving family matters. This individual was sure elder exploitation was a crime to prosecute. The prosecuting attorney who is willing to take the case, can only wait until a detective processes the case and forwards the case for prosecution. And now once again, another elder exploitation case is pending. Pending a detective to accept the case and apply the necessary due diligence to present the case to the prosecuting attorney.

Now in defense of law enforcement, their fraud case backlog is huge. And I really do mean its a big problem. The people needed to process the cases, with the right skill sets, are few and far between. Funding is next to nothing, all cases are prioritized for the level of community threat, and frankly, elder exploitation is not sexy. Unless there appears to be a possible hastened death situation, their priority is child abuse, murder, rape and the war-on-drugs.

Having said this, let me explain some items that you might not know. First, before any case can get to court, it must first receive a case number from the police department that has jurisdiction in the case. This how it gets tracked, noted, filed and if necessary transferred to the proper jurisdictions. No case number, no detective to process, no litigation.  But I digress, the issue is that the detective felt there isn’t  new laws that make it a crime to exploit an elderly person. It was a family matter to be litigated privately. This individual was also surprised to find out that in WA, there recent changes to state law which gives law enforcement and attorneys the ability to better prosecute for elder exploitation and abuse. This means even if there is not, law enforcement are now able to check in on a vulnerable adult and if necessary, take steps to insure their safety from potential harm whether financial or physical.

The recent set of economic setbacks to all local, county and state agencies has greatly reduced the number of qualified staff able to work the high case load. I understand why the fraud case loads are continuing to back up and that they are as frustrated as the rest of us that there is not enough time in a day to process these cases. I and my fellow fraud fighters understand that public servants need to keep the rapists, murderers and drugs off the streets, but I am concerned that I continue to hear from my colleagues this type of response from veteran detectives/law enforcement officers. Really? This is really how you feel?

I am willing to consider that these few individuals were not thinking clearly; that maybe that cup of coffee was not fully loaded with enough caffeine to engage critical thinking. But this response tends to come from older and more experienced law enforcement personnel, and this concerns me. Why? Because they the men and women that the younger professionals are watching and learning from as they strive for excellence to become viable law enforcement professionals.

As the “Boomer” generation continues to age, their level of vulnerability is going to grow exponentially. This means that they are prey for healthcare fraud, ID theft and of course, abuse and exploitation from friends and family.And they are going to need all of our help.

So my challenge to all of you who continue in the fight against fraud and abuse… please help our law enforcement officers & detectives to believe that elder abuse and exploitation is really a crime worth punishing. That the next vulnerable adult they investigate may be the relative of a friend or neighbor; that they just  might save someone from loosing their home and quite possibly their life.

Thank you for listening.

August 22, 2011

Is Ethics Hard-wired or Learned


I was reading a posting in LinkedIn by Fernando A., in the ACFE group, titled “Pants on Fire! Children and Lying“. The link led to a site called delanceyplace.com 8/18/11 – children and lying. The article a study into the frequency of children telling lies and whether this was indicative of a future problem. It seems that children who lie well are cognitively more advanced and are able to hide their tracks better. They tend to grow up and be more capable of dealing with complex situations, such as employment that requires quick problem solving or outside of the box thinking. The article suggested they might become bankers; I wondered about other financial positions that have recently been in the headlines for manipulation of funds and factual information.Then I thought about the recent trends in education for forensic accounting and fraud investigation. And what about learning to understand the federal tax code and recent gloable accounting issues.

Today’s generation is faced with making choices for more than which college to attend or job for a career. They have become a self-monitored social network of information and ideas. They want their lives to have impact, their efforts to matter, and their path to move at the rate that technology limits them. And I ask myself, what were they like as children? How did they interpret whether to help each other to obtain the advancement they rationalized as necessary to reach either their own goals or their family’s goals. I mention family because so many children now have been pushed through the process of high grades for college and then a better future. Does all of this push to succeed on a fast track impact their view of ethical standards?

Last week I was talking with a college professor who teaches at North Seattle Community College. They have created a new Certificate of Fraud to help students prepare for a career in fraud fighting. One of the topics discussed was about how students’ views of ethical behavior is changing nationwide. Does this generation of students feel differently about sharing information and taking risks that a previous generation might see more black and white. And if so, will that impact how they investigate fraud?

I don’t have an answer, but it poses the question of whether the “perceived need” to commit a fraudulent act will need to be redefined into less black and white and into more levels of grey. I hope not, but as those of us currently in the trenches age, and others come into the roles of leadership, what do they interpret ethical behavior to mean.

So now I am back to whether or not ethics is hard-wired or learned at an early age and how does that affect the fight against fraud. Employers are already being challenged by young professionals on what they expect as employees. Perhaps this generation of young professionals will need to show the veteran fraud fighters what they see as the solutions to a potential fraud wave looming in the future. Elder abuse and exploitation, cyber crime, and white-collar crimes will continue to rise as there is a shift in which population is taking the lead.

My vote is on this upcoming generation of professionals to take everything to the next level with technology and all its trappings. And I still ask, what were they like as children? Were they good liars too?

August 8, 2011

Restaruant Breach Leads to Fraud Article


First, thank you to all who inquired to why my lack of posts; we had a death in the family that required my attention.

THIRD PARTY SECURITY RISKSWhy Compliance is Key for Everyone

Those of you who deal with fraud in the retail and restaurant industry are very familiar with skimmers; for those who don’t, we are talking about the hand-held devices that skim the financial information from your credit cards. These little devices are the bane of fraud fighters around the world. And they are getting smaller and more invasive every day. But the recent problem to hit the fraud newsletters and blogs (see article: Restaurant Breach Leads to Fraud by Tracy Kitten, Managing Editor at Bank Information Security), is the breach at a Texas restaurant from a hacker that gained access to the third-party vendor who processes their credit card transactions.

Restaurants have worked hard to make sure their customers’ credit/debit card information is safely handled, that their employees are following the rules, and all the while attempting to keep up to date on technology. However, the costs to upgrade each time a new software comes out or piece of equipment is available, makes a small business wince. And by nature, restaurants are just plain vulnerable to fraud due to the high level of transactions and tendency for high employee turn-over.

But the recent talk of the town is the breach in Texas; not by skimmer, but a third-party vendor that handles the point-of-sale (POS) system information for the restaurant. The Sheriff’s department are reviewing the details with the Secret Service, but they have come to the conclusion that back in early April and mid-May, the electronic information was intercepted by the hacker who had infected with POS system with a virus to steal payment card transaction data. By July, fraudulent charges began appearing. The most recent restaurants hit in the Walker County, have been “fast-casual diners and pizzerias”.

Mr. Neal O’Farrell, founder of the Identity Theft Council stated that “small businesses are often as much the victim of the breach as their customers are”.  As more and more security breaches become types of cyber attacks, small businesses need to start taking a look at their vendors and asking the hard question of “what are they doing to reduce fraud risk” and “how can we collectively reduce the risk”. Merchants that provide the readers might help by offering better trade-in offsets to reduce costs and promote use of the newer equipment and software available. I can’t remember when it was, but I remember I was shocked to find a business that still had a merchant device that printed out the entire credit card number on my receipt.

As the economy gets tighter and continues to stretch our budgets, fraudsters are going to find the chinks in our armor as we become tired a lacx in our effort to be careful; we need to be diligent about consistently finding ways to reduce the risks of fraud. We have to find new ways to help each other out and not rely on the credit card companies to solve the problem. It’s hard to cheat an honest person, they take the time to notice what is going on around them, and they ask questions. Let’s all take time to think about how we can become better at detecting and deterring fraud so we don’t end up having to defend against it.

 

April 11, 2011

Fighting Fraud By Connecting and Detecting Globally


As the world gets smaller from people traveling more, gaining greater access to information via the internet, movies, television and cellphones, we seem to be sharing at a rate that astounds and thrills the number crunchers. We now share everything from secrets to solutions, inventions to investigations, and things that shouldn’t be mentioned let alone take place. This includes new ways and means to commit fraud including establishing complex webs that challenge the best of us in fraud investigation, as well as ways to counterfeit almost every product manufactured. But as fraud fighters, we are learning how to use that to our advantage. As much as the internet causes us to throw our hands up in the air in frustration we also have shouted loudly with joy when a fraudster unwittingly leaves a trail for us to follow. And we thank them for that.

The best way each of us can reduce the risk of fraud is become educated, connect with each other and work together as transparently as possible. The more we leave the old ways of hoarding our tips and tricks, the stronger we become in unity. By now, most cities, counties and states as well as federal agencies are beginning to understand this and the old network of closed doors is opening up to free-share ideas and solutions. But even better than this is that a new level of young professionals have grabbed onto the possibilities and are both teaching and putting into place ways to be more efficient and effective in the fight against fraud. I applaud all of you who work to share your concerns and network to find solutions. In my effort to continue sharing, I have listed below some sites I have come across recently for you to review and share with each other. I by no means participate in them, or receive any benefit from them. Nor do I present them as the perfect find, but I do find the information to be interesting and provide some ideas to pursue for further consideration and self-education. Keep up the good fight and continue to stay true to your morals and ethics as we all continue to be challenged in life as times become more difficult and trying of faith and patience.

http://blogs.gartner.com/avivah-litan/2010/12/15/2011-threats-and-trends/

http://threatmetrix.com/threatmetrix-announces-fraud-prevention-trends-for-2011/

http://news.hostexploit.com/cybercrime-news/4794-changing-internet-fraud-trends-highlighted-in-ic3-2010-report.html

http://www.publishingtrends.com/2011/04/bloggers-weigh-in-on-the-kindle-swindle-and-new-fraud/

http://www.nlets.org/press/internet-crime-trends-the-latest-report

March 26, 2011

Potential for Elder Fraud on the Horizon


Hello Everyone. I know its been awhile. Today I would like to share concerns from various conversations with others in the elder care community. This group includes tax preparers, CPA’s, business litigators, caregivers, senior care facilities (both assisted living residential and commercial), and health care workers, and fraud investigators. Why?

Well, as most of you have heard that the number our seniors that have aging parents now needing to place them into assisted care and skilled nursing homes and facilities are increasing. Most locations have been able to accommodate the ebb and flow of family and friends seeking help for their aging parents, spouses, partners and family members. Recently I was visiting an assisted living facility and the executive director commented that he no longer has rooms for the growing number of requests he receives on a daily basis. In fact, he now has had to create a waiting list without any way of assuring the families of a time frame when their loved one can be cared for by skilled staff and in a safe environment.

Which brings me to the next point. Due to the huge and I mean that quite literally, huge upcoming increase in senior/elder care needs, locating affordable and qualified care will be in high demand. This creates a large pool of vulnerable adults open to be preyed upon by the fraudsters in the health care field. This includes medical billing, quality care and safe environments where abuse is not tolerated or able to take place, qualified and vetted personnel (as in proper background checks and monitored activity), not to mention reasonable costs for the care received.

One women in a caregiver support group was aghast when she found out that a facility wanted to charge her a very large administration fee, first and last months space/care fee, a cleaning deposit, and a slush fund for small care needs. This amounted to over $10,000 up front for the first month of care. Most families can barely cover the costs of taking time off to care for a loved one let alone the initial upfront costs to begin care. This was a residential home that was set up to care for six elderly residents, and was part of an LLC that included six other homes just like it. There are many of these homes that work very hard to take very good care of their residents. But this home was not well maintained and the individuals that ran the home allowed family members to come and go and hang around as if it was a normal family home, served only their ethnic foods and was not keeping up the care on the home. This was very disconcerting to the woman and she did remove her mother from the home and chosen to take care of her herself. Which is what many are choosing to do because the costs end up meeting the same as the income they were trying to earn in the first place.

Now, having said this, I know for a fact that a qualified care facility with little turn-over and properly maintained premises is not cheap. Paying the staff what they deserve for the hard work, and think about it, it is hard work otherwise we would not have the need for these types of residential and commercial care locations, are key to running a safe and clean environment. Familiarity or routine is key to helping the elderly feel safe and willing to participate in the care they need. One director told me it takes close to $2000 per new employee to get them properly trained at the level he felt was key to providing the care expected for the fees charged and to remain in compliance with state laws and regulations.

Which brings the next point. There are no standards for care and costs regarding taking care of our elderly citizens aside from the currently established medical and government codes and regulations on running a business or medical practice. That puts the burden on the family to research, vet out and locate places they can both afford and feel their loved ones are safe. This also means they are relying on the homes and facilities to do their ‘due-diligence’ regarding their personnel and policy and procedures.

So here is my final point – the biggest potential for fraud is that the needs will over run the availability of qualified personnel to care and monitor our vulnerable adults. Recent economic conditions create a situation ripe for fraudsters to prey on the elderly either directly or through their caregivers as everyone gets stretched beyond their limits. So here are some ideas that I would like the fraud community to spark conversations on to build a grassroots approach to keeping our loved ones safe and out of harms way.

First, educate as many of those around you on what elder abuse looks like and who and where to report it. Each local city/county has an organization to connect you to the resources available. Second, if you know of someone you think is being targeted or IS unsafe, please reach out to the local law enforcement and ask for them to check in and verify all is well. They have access to governmental agencies for support. Third, ask questions if you need answers regarding the cognitive skill level of our seniors. Early signs may be there and steps need to be taken so they do not become pray to neighbors, family, and other commercial entities looking for easy targets. This includes those of you working in banks and stores.

Now for financial exploitation – this is going to be a very serious situation in the next years ahead. The generation of seniors that are now reaching increased levels of dementia were raised during a time when they understood they needed prepare for retirement. This means most of them have squirreled away some sort of funding to cover their final years. These savings have become an easy target for family, neighbors, and I am sorry to say fellow members of religious organizations to zero in on for support. Befriending the elderly can be easy because they believe in giving people the benefit of the doubt, which means most of them if they are lonely, and they usually are, end up trapped before they know and then have no means to reach out in time to protect themselves from the leeches they have welcomed into their homes and life. Not to mention, if they are in a state of dementia they will not remember what they recently did or agreed to at the time they were parted from their financial future.

Here are some sites to research and get your selves prepared to protect our seniors from harm:

http://helpguide.org/mental/elder_abuse_physical_emotional_sexual_neglect.htm

http://ctwatchdog.com/category/finance/elder-care

http://www.ncea.aoa.gov/ncearoot/Main_Site/index.aspx

http://www.apa.org/pi/aging/resources/guides/elder-abuse.aspx

http://www.calbankers.com/post/preventing-elder-financial-exploitation-how-banks-can-help

http://www.elderangels.com/

http://www.elderangels.com/

 

August 24, 2010

Fraud & Forensics: Times are changing…are we?


Most of you are familiar with the CSI shows on television. And you have read articles on fraud examiners catching the Madoff’s of the world lately, but most of you don’t know the process forensic accountants, fraud examiners, and law enforcement go through to quantify or qualify the information for their clients and the court. It’s not a glamorous process and it doesn’t happen in sixty minutes let alone sixty days. It’s a tedious and detail oriented process that requires pulling hundreds if not thousands of bits of information into one historical reference, and the process has been in place for a very long time. But Dylan was right, times they are a-changing.

The recent shifts in technology have made the amount of data exponential, and this means the time to manage and analyze have also become exponential. Cases now span years instead of months. Imagine an embezzlement case over five years with one hundred clients and their historical information. So how do you provide your clients with a work product using what I call the F.E.E. principle: Focused, Efficient & Effective?

In my usual internet nosing around I found this article “Follow the Money – Find the Fraud” by Tracy L Coenen, at Sequence Inc from the Wisconsin Law Journal, written by Tracy Coenen, CPA, CFF in June of this year. It’s a article about how we each must consider the complexity of our case. What are we faced with? How can we wade through mounds of documents and data and deceptive efforts to get to the facts and then put all of that into a format that educates the facts to both judge and jury. I think this article will help you ponder this thought and hopefully consider some new ideas. There is a lot out there to choose from, but in the end it is about the truth and the best and most efficient way to get to that truth. Facts speak loud, but they rarely shout ‘here I am’.

I would also like to add that technology does NOT replace the ability to interview and investigate, but it does allow us to more efficiently get to the facts to build a case and prepare that case for litigation. Remember, fraud examination and forensic accounting is not about technology it’s about the truth of the situation; the prima facie evidence necessary to present a case if you choose to go to trial.

TIP: CFF means Certified in Financial Forensics – see link above.

July 27, 2010

Is CAPTCHA Dead?

Filed under: Fraud Schemes,Fraud Trends — fraudjournal @ 2:26 PM
Tags: , , ,

One of the discussions running around the fraud blogs and LinkedIn groups is about how fraudsters have been able to get past CAPTCHA. So is it dead? That question was asked in a 2007 article when Google filed for a patent that would allow computers to read images that contained a graphic of morphed characters. (http://www.blahblahtech.com/2008/01/google-patent-captcha-killer.html)

And if you ask the internet about CAPTCHA, you will find various requests to locate a program that would essentially ‘kill’ the CAPTCHA program temporarily when dealing with other languages. So is it dead? Not yet. Businesses and websites still are using this program as a security measure. So what is the fuss?

Most of you have already experienced CAPTCHA without knowing it. This is when you are required to type in what you see on the screen (usually a set of twisted or distorted letters, numbers or combo of both) when you purchase or create an account with an online storefront or organization. If you don’t, here is a link to Wikipedia to learn (http://en.wikipedia.org/wiki/CAPTCHA).

Recently in New York, scammers created another work around by setting up a network of users to purchase tickets online from Ticketmaster. The company under indictment ‘Wiseguys.com’, purchased the maximum of number of tickets to big name concerts and events by employing a vast network of purchasers who could type in the semi-obscured graphic used as a security measure to stop scammers from purchasing more than the allowed number of tickets. These tickets were then scalped online for prices far above the normal retail value. So, now you know why some of those concerts were sold out so fast and so many tickets were for sale online.  You can read the article here: http://www.nbcnewyork.com/news/local-beat/Ticket-Scalpers-Defeat-Latest-Cyber-Security-85808497.html .

So how does this effect the fight against fraud? It means that fraud has truly become a global concern. While it creates jobs in India and China, it also allows fraud rings to branch out and work towards becoming an even bigger menace than before. If the sources of scamming is off-shore, then the process to shut them down becomes much more complicated and deals with multiple jurisdictions. Plus their costs are minimal, they have a dedicated work effort can be a 24/7, and you and I can’t see them at work. It allows them to blend in or hide in plain sight.

The economy is already creating budget havoc for everyone. Law enforcement is already overwhelmed with fraud on the grand scale, which means it is up to you and I to stay aware of what we see on the Internet and around us today. Help your local and regional fraud teams by reporting fraud when you see it. And don’t buy scalped tickets – most often they are not your everyday you and me that ended up with spare tickets. It’s guys just like the scammers ‘wiseguys.com’ that stole your right to purchase them at the retail price in the first place.

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 SeattlePi.com 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:

  1. http://www.kvue.com/news/Austin-Police-tell-a-victime-of-check-fraud-it-wont-investigate-79446868.html
  2. http://www.seattlepi.com/local/414012_WIREFRAUD08.html?source=mypi
  3. http://www.acfe.com For references for find a CFE for fraud risk assessments
  4. http://www.ftc.gov/bcp/consumer.shtm For information on Consumer ID Theft information
  5. http://www.fbi.gov/majcases/fraud/internetschemes.htm For more information of fraud scams
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