Persistent Whistleblower Works to Expose VA Health Care Fraud

FROM THE PRESIDENT

James D. Ratley, CFE

I've met many whistleblowers in my time, and what’s always resonated with me is that they persist despite nearly impossible odds. Dr. Sam Foote, a physician with a genius mind and audacious spirit, persisted when he found himself facing Goliath: the Phoenix Veterans Affairs (VA) Health Care System. When scandal rocked the department in Arizona, he didn’t back down.

In 2011, Foote penned his first letter to the VA Office of the Inspector General (OIG) to report waste, fraud and abuse by Gabriel Perez, then-director of the Phoenix VA. Foote had heard rumors that Perez’s mismanagement of funds had put the hospital $12 million in the hole. The national inspector general for the VA investigated the allegations that same year and Perez retired while inquiries were underway.

Any whistleblower would sigh with relief at this point: The OIG listened, the alleged fraudster was ousted, and now Foote and the hospital could move on. However, during Perez’s tenure, seven physicians left the hospital, and he never replaced them, which left the hospital with a provider shortage.

In 2012, Sharon Helman, who’d previously served as director of the VA hospital in Hines, Illinois, joined as head of the Phoenix VA and nearly a year later was reporting a decrease in patient wait times. But in the next year, Foote discovered secret patient wait lists. “In April of 2013, they [Helman and senior staff] made two lists: They made one electronic list that they would take on and off about 150 names that they actually reported to central office,” says Foote in Fraud Magazine's latest cover article. “Then they had another electronic list that did not report to central office.” Helman and the other administrators were claiming bonuses for decreased wait times — and patients were dying while waiting for care.

Foote again brought his concerns to the attention of the VA OIG, but this time he faced some resistance. He then sent letters to several government officials, including Sen. John McCain, R-Ariz. Eventually, the office of then House Rep. Jeff Miller, R-Fla., the chairman of the Committee on Veterans’ Affairs, responded. Miller put Foote in touch with a CNN producer, and on April 23, 2014, CNN broadcast an interview with Foote, and the story went viral.

Thanks to Foote’s tenacious efforts, further investigations would reveal that 293 veterans died while waiting for care. Multiple high-ranking officials, including Helman, have been placed on administrative leave or fired. And Foote continues to speak out as the VA saga continues.

At the 28th Annual ACFE Global Fraud Conference in Nashville, Tennessee, this past June, Foote received the 2017 Cliff Robertson Sentinel Award “for choosing truth over self.” He might have taken on Goliath, but just like the result of that epic battle, Foote is taking down the giant.

Resources You May Have Missed During Fraud Week 2017

Shared by KPMG India on Twitter

Shared by KPMG India on Twitter

AUTHOR'S POST

Mandy Moody, CFE
ACFE Content Manager

The ACFE would like to thank all International Fraud Awareness Week Official Supporters, supporting media, bloggers, tweeters and social media posters for their amazing participation in Fraud Week.

We would also like to thank our Fraud Week Ambassadors this year: Abu Dhabi Accountability Authority, Loomis, First Abu Dhabi Bank, Virgin Media, Calpine, Magellan Health, Voya Financial, UAE Banks Federation, Maersk, Kenaga, Mashreq Bank, Oman Insurance Company, Orange, Standard Chartered and Millicom. The success of Fraud Week could not have happened without all of these dedicated people working together around the globe to spread the message that fraud can be prevented and detected.

Even with the many articles and resources shared, you might not have seen all that was done to highlight fraud detection and prevention. Here are some Fraud Week highlights you might have missed:

  • Video - Fraud Week video, Cerebra CPAs and Advisory, Turkey
  • Instagram Graphic - Password Tip Instagram post, 1st Choice Savings and Credit Union, Alberta, Canada
  • Phishing Explainer Photos - Sun Coast Credit Union, Florida, U.S.
  • E-Book - Are your fraud operations ready for digital banking fraud? NetGuardians, Switzerland
  • Article - Best practices for stopping contract and procurement fraud, SAS, U.S.
  • Events - Check out all of the events, from Facebook Live sessions to workouts, that happened all over the world this week, ACFE

Remember, fraud awareness doesn't begin and end with Fraud Week. It is a year-round effort being supported by fraud examiners all over the world. Thank you all again, and we look forward to next year’s event!

The Fraud Examiner's Latest Threats, Tools and Opportunities

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GUEST BLOGGER

Kelly Todd, CFE
Managing member and member in charge of forensic investigations at Forensic Strategic Solutions

A quick glance at the barrage of headline news related to cyberattacks, the perpetual explosion of electronically stored information and the ease with which data can be moved and shared makes one thing obvious: a new frontier has emerged for businesses. In this dynamic electronic age, the scope of risk for businesses is growing — in size and complexity — at such a rate that traditional risk management measures are simply not enough. While the “new frontier” has the potential to leave unsuspecting businesses exposed to a host of new risks, it is also creating a host of opportunities for those of us fighting fraud.  

Threat: The Trusted Employee
Frauds committed through the use of a computer and its network is one of the fastest growing threats for businesses. According to Ernst & Young’s 2016 Global Forensic Data Analytics Survey, nine out of nine industries rate the threat of a cyberbreach as a their top risk. While the latest news focuses on hackers and cybercriminals, there is an equally dangerous, but perhaps less obvious, threat to corporate assets. While trusted employees are moving, sharing and exposing corporate data just to do their jobs, the malicious employee or contractor with authorized access may be deliberately taking confidential information for personal gain or other nefarious reasons. Whether internal or external, the threat posed by these cybercriminals is real. Threats include the disruption of operations, the wrongful transfer of funds and the theft of intellectual property, confidential information or other critical assets.

Tools to Respond: Data Analytics
The dynamic nature of technology threats requires a proactive response. While external auditors and C-suite executives have long been reluctant to embrace advanced data analytics as a proactive tool — or even as a reactive tool — to ferret out fraud, the tide seems to be turning with the increased threat that cybercrime poses.

Advanced data analytics provide the ability to collect and analyze data, both structured (think transactional data) and unstructured (email, voicemail, internet logs, text messages, social media, blogs or free text fields in a database), to prevent, detect, monitor and investigate potentially improper transactions, events or patterns of behavior related to misconduct, fraud or noncompliance issues. 

As fraud examiners, we know a picture says a thousand words — and nothing tells a story better than data. The use of data visualization tools is on the rise for business intelligence, as well as detecting patterns and relationships indicative of fraud. With the explosion of electronic data, data visualization allows for communicating key aspects of complex and voluminous data in a more intuitive way. Effective visualization — which is both an art and a science — combined with advanced data analytics helps users identify patterns and relationships. 

Opportunities
With the increased acceptance of advanced data analytics — not to mention emerging technologies, such as blockchain (a topic that goes well beyond the scope of this blog) — dramatic opportunities abound for fraud examiners.

Valuable skills for the new frontier include:

  • The technical skills to understand the information systems and how to collect relevant and reliable data.
  • An expertise in data analytics to relate data from disparate systems, design queries, recognize patterns, interpret and report on results.
  • Institutional knowledge or investigative skills to understand the relevant risks and controls, and to collaborate in the interpretation of results in the context of the associated risks.

As risks continue to grow in the industry, staying up-to-date with the latest tools and resources will be critical. As we look to spread knowledge during International Fraud Awareness Week, it’s also crucial that as fraud professionals we commit ourselves to continuing our education. The biggest fraud risks are the ones we are not yet aware of, but with the right tools and expertise we can be better prepared to respond.

CFEs Share Their Most Memorable Fraud Cases

AUTHOR'S POST

Mandy Moody, CFE
ACFE Content Manager

According the the ACFE's latest Benchmarking Report for in-house investigation teams, the majority of fraud investigation teams (60%) take one month to close a case. But, as we all know, each case is different. Some can take six weeks to close and some can take six years. For this year's International Fraud Awareness Week, happening this week, we wanted to share a few of your colleagues most memorable cases. Let us celebrate the hard work and time you put in to each and every case you work on, and hear about why some cases will never be forgotten.

“Usually our audits are done after end of year. There was one occasion, however, where we undertook a real-time audit during a national emergency and exposed high levels of fraud and misappropriation of assets. The report was widely publicized and led to parliamentary scrutiny, which was aired live on national television for the first time in our history. In an unprecedented move, high-ranking public servants were suspended without pay for six months and recoveries of monies lost in taxes and undelivered goods were recovered.”

- Adama Renner, CFE, FCA, Deputy Audit General, Audit Service, Sierra Leone

“I’d say the one that I was most proud of was a simple travel and expense case. The company asked us for help on an investigation into an executive assistant (EA) who was using the bosses’ (there were multiple that this EA worked for) credit cards in a fraudulent manner — purchasing personal items, taking trips with friends, that type of thing. All in all it was a straightforward case, but what I was so proud of was when we finished going through all the supporting documentation, it was handed over to the general counsel, who in turn gave it to the police. When we got an update on what happened, we were told the police thanked them for wrapping it up in a nice little bow because it made the prosecution extremely easy. I guess it’s the simple things in life sometimes!”

- Michael D’Alessandro, CFE, CPA, Corporate Risk and Compliance Manager, Sony Corporation of America  

“After moving to London in 2005, I worked at the headquarters of the Commonwealth Secretariat, an intergovernmental organization. It provides technical assistance in the promotion of the rule of law and good governance with a focus on sharing best practices and capacity building. I oversaw the organization of international anti-corruption and counter-terrorism conferences and training sessions in London, Jamaica and Malaysia. This entailed close collaboration with a highly diverse range of subject matter experts, including those at Scotland Yard, as well as government officials, criminal law experts and policy researchers in various nations. We worked towards very tight deadlines across three time zones, two of which were at the opposing ends of the globe. It was equally challenging, thrilling and rewarding. Germany is not a member of the Commonwealth, which meant I could only hold a temporary position (and was the only German), but having the opportunity to work with those high-caliber passionate fraud fighters and senior lawyers was deeply inspiring and presented a lasting influence.”

- Britta Bohlinger, CFE, MA, BSc, Founding Director, RisikoKlár

Find more stories like these, as well as free videos, infographics and more at FraudWeek.com.

5 Ways to Connect with Other Fraud Fighters on Social Media During Fraud Week 2017

GUEST BLOGGER

Sarah Hofmann
ACFE Public Information Officer

One of the great things about International Fraud Awareness Week, beginning next week, is seeing how it brings fraud fighters together as they spread fraud awareness in their communities. In that spirit, we want to connect with each one of you on social media this Fraud Week. Here are some of the ways you can connect with us and your peers during this week of fraud awareness:

  1. Answer new trivia questions every day — We will be posting a new trivia question Monday-Friday on the ACFE’s Facebook page and Instagram account. Challenge your peers and see who can be the first one to comment and guess the correct answer! The answer to each question will be shared later in the day.
  2. Join the ACFE’s first Fraud Week Twitter chatJoin us on Tuesday, November 14, at 11 a.m. CST to participate in our first-ever Fraud Week Twitter chat. Our topic is “You discovered fraud — now what?” and we want to hear your best tips and methods for handling a fraud once it’s discovered. Learn how to participate.
  3. Share the latest resources — We’re adding a new video to our sharable videos library on how fraudsters launder money. This basic primer is perfect to share on your Facebook, LinkedIn or Twitter accounts so you can educate your clients, friends and family on how embezzled money is cleaned by fraudsters. We will also share a new podcast on Initial Coin Offerings (ICOs) and posting a new blog.
  4. Tell your peers what you’re doing in the ACFE’s members-only community — We will be checking in with how your Fraud Week efforts are going all week in the ACFE community. Share tips and ideas for spreading fraud awareness with your ACFE peers. You may even get inspired to adopt a new approach for next year!
  5. Tag all your #fraudweek posts with the official hashtag — We will be retweeting, reposting and sharing everything supporters are doing during the week on our Facebook, Twitter and Instagram. The easiest way for us to find your great posts is for you to add the #fraudweek hashtag or tag the ACFE’s account in your post.

For more ideas on what supporters are doing for Fraud Week, check out the Fraud Week events page. We look forward to seeing and sharing all the great things supporters like you are doing during this week, and encourage you to connect and engage with other anti-fraud professionals!