Using Social Media Network Analysis to Detect Bank Application Fraud

Using Social Media Network Analysis to Detect Bank Application Fraud

As of April 2018, the global population is 7.6 billion and 4.2 billion of us reportedly use the internet. There are 3.3 billion active social media users, which means that 70% of people using the internet also have one or more social media accounts. This number is expected to increase to 90% in the next three years. As a fraud analytics professional, this tells me the majority of people who have access to the internet may also be trackable on social media.

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Naughty or Nice: Who Made the List in 2016?


Emily Primeaux, CFE
Assistant Editor, Fraud Magazine

He sees you when you're sleeping. He knows when you're awake. He knows when you've been bad or good...

"He," or "she," of course, is the ever present fraud fighter. And in 2016, fraud fighters saw a slew of unsavory characters who clearly ignored the elf on the shelf and instead stole, bribed or colluded to illegally line their own pockets. But for every bad apple, there are unsung heroes — the whistleblowers, journalists, investigators ... the list goes on and on. These heroes go to battle in the trenches every day to root out the crooks and thieves.

In honor of the holiday season, let's ruminate on the past year and the characters that made it onto either the naughty or the nice list.


  1. Wells Fargo: On Sept. 9, 2016, Wells Fargo negotiated a deal to settle a lawsuit filed by the U.S. Consumer Financial Protection Bureau, the Office of Comptroller of Currency, and the City and County of Los Angeles. Though Wells Fargo didn't admit to any wrongdoing, it did confirm that employees had opened more than two million checking, savings and credit card accounts without customer approval. And in a stunning turn of events, former employees then came forward to say they had called the ethics hotline to report dubious sales practices. However, according to these accounts, some whistleblowers claimed that the bank's strategy for dealing with whistleblowers was to find ways to fire them in retaliation. Though the case is ongoing, John Stumpf has stepped down as the bank's chief executive.
  2. Andrew Caspersen: On Nov. 4, 2016, this disgraced scion of a wealthy Wall Street family was sentenced to four years in prison for robbing his friends, family and a large hedge-fund foundation in a Ponzi-like scheme. The judge who sentenced him? None other than the ACFE's 2016 Cressey Award winner, Senior U.S. District Judge Jed S. Rakoff. Looks like Caspersen most likely received coal in his stocking this year.
  3. The Panama Papers: A giant leak of more than 11.5 million financial and legal records from the world's fourth biggest offshore law firm, Mossack Fonseca, detailing financial and attorney-client information for more than 214,488 offshore entities ... otherwise known as the Panama Papers. According to the papers, the leak "exposes a system that enables crime, corruption and wrongdoing, hidden by secretive offshore companies." The leaked documents outed scores of politicians, business leaders and celebrities for fraudulent business practices, including Iceland's Prime Minister, Sigmundur David Gunnlaugsson. He stepped down after documents revealed that he and his wealthy wife had sheltered money offshore.


  1. The Panama Papers: The papers themselves were a great feat of international cooperation when the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and more than 100 news organizations released the Panama Papers. These are the good guys.
  2. Tyler Schultz: When he discovered that Theranos, a health technology and blood-testing company, was using proprietary Edison machines that frequently failed quality-control checks and produced widely varying results, Schultz (an employee of the company at the time) decided to speak up. He drafted an email to founder Elizabeth Holmes to complain that Theranos had doctored research and ignored failed quality-control checks. What makes this move even more incredible is that Schultz is the grandson of George Schultz, a Theranos board member. Since then, a major investor has sued Theranos for fraud and the company has had to stop blood tests, shut down labs and cut jobs. 
  3. Clare Rewcastle Brown: In 2010, Rewcastle Brown founded The Sarawak Report and Radio Free Sarawak to disseminate news that concerned the Sarawak region of Malaysia and eventually, news surrounding the emerging 1MDB (1Malaysia Development Bhd) scandal. 1MDB is currently being investigated by Swiss, Singh and U.S. authorities. And she's not backing down, despite a Malaysian court issuing a warrant for her arrest for "activities detrimental to parliamentary democracy" and the "dissemination of false reports." She'll be speaking about the scandal at the 2017 ACFE Fraud Conference Europe in London, March 19-21.

The naughty list may never be empty, but at least we have those on the nice list to turn to. And while 2016 saw some pretty egregious schemes, we can enter 2017 knowing that there are those willing to investigate and speak up. Here's to the new year!

The Shared Traits of Those Committing Fraud Against Elderly Family Members


Annette Simmons-Brown, CFE

Let's examine the case of "William," the adult son of a victim. Since 1998, William's mother (we'll call her Debra) authorized him to manage her financial accounts that had a balance of $3 million to $4 million. However, she didn't authorize William to withdraw funds from these accounts, and she never initiated the execution of a power of attorney (POA) instrument.

Over the next 11 years, William systematically transferred funds from his mother's accounts to pay his bills and to supplement his accounts. He also opened at least two credit card accounts in his mother's name and tried to hide bank statements from her. By 2009, her accounts were overdrawn. Debra — and her other adult children — finally detected William's thefts and reported them to the police. William was ultimately charged with and convicted of one felony count of theft by swindle over $35,000; he was given a stayed prison sentence of 42 months and ordered to pay restitution of $110,500.

(This is one of many cases in Hennepin County in recent years criminally charged when a POA instrument was absent; thus, the lack of a POA instrument doesn't necessarily prevent criminal charges of financial crimes against the elderly.)

The Hennepin County Attorney's Office (HCAO) in Minneapolis, Minnesota — for which I am a paralegal in its complex crime unit — has long had attorneys specifically assigned to the prosecution of financial exploitation of vulnerable adult (FEVA) crimes. A review of 15 intra-familial FEVA cases charged by the HCAO within the past three years, in which the victims were elderly and related by family to the defendants, reveals a depressingly uniform fact pattern:

  • The life circumstances of the defendants and the victims were similar.
  • The manner and speed with which the defendants accessed the victims' funds were similar.
  • The degree of the thefts was similar.
  • The mindsets of the defendants as revealed in case investigation, litigation and conviction were — you guessed it — similar.

In all 15 cases, the victims were single and either widowed or long divorced. The youngest was 58 years old — a man who had been injured by a car accident and then required assistance with daily living activities and transportation. The oldest was 90.

At least 12 of the victims required professional care for daily living and health problems, either in-home or in an assisted living facility. At least three of the victims experienced memory loss or other cognitive dysfunction.

These were the family ties:

  • Eleven of the victims were parents of at least one of the defendants (in two of the cases involved husband-and-wife defendants).
  • Two of the victims were the defendants' grandparents.
  • One victim was the defendant's aunt.
  • One victim was the defendant's sister.

Six of the 15 defendants — all of whom were responsible for paying the victims' home- or assisted-living care costs from the victims' accounts — defaulted on these payments, which resulted in the threatened termination of care or even the threatened eviction of the victims from their facilities. In six cases, the amounts stolen from the victims (within the date range of the charges) exceeded $100,000 — the lowest was $107,348 and the highest was $250,196. In eight other cases the defendants stole $14,046 to $71,500.

In every case, the defendants used the victims' funds to finance their lifestyles. They accessed the victims' bank accounts using checks, ATM withdrawals, debit card payments, counter withdrawals and online transfers from the victims' accounts straight into their own accounts.

They used the victims' credit cards for their purchases and accessed the victims' funds to pay the credit card balances. They also transferred money from victims' investment accounts into the victims' bank accounts and spent that cash.

In one egregious case, the defendant took out a mortgage on a real estate parcel that was part of her father's trust estate (for which she was co-trustee) that she and her brother were due to jointly inherit. She used the proceeds of that mortgage to pay off the mortgage on another real estate parcel within the trust estate that she was due to solely inherit. This devious move left her with an unencumbered property but left her brother with the shaft.

In 12 of the 15 cases, the victims executed a POA. Judging from the defendants' spending patterns after the POAs were executed, it's clear they all felt they "owned" the victims' funds or at least had joint ownership. They failed to remember, or deliberately disregarded, that the POA confers more responsibilities than rights. Most importantly, the fiduciary responsibility is to spend the principals' money to benefit the principals rather than themselves, always.

They also all failed to remember, or deliberately disregarded, that a financial transaction always leaves a paper trail. And when their conduct came to light, the paper trail told the story far better than an interview with an enfeebled, distraught victim ever could. And they all failed to realize that their conduct couldindeed come to light, the subtleties of modern-day money transfers notwithstanding.

In 10 of the 12 cases in which a POA instrument was present, the defendants were charged with at least one count of felony — financial exploitation of a vulnerable adult — and several received an additional felony of theft by swindle. In the remaining cases, the defendants were charged with a felony of theft by swindle of amounts over various thresholds. Seven of the cases have resulted in felony convictions, one case has been sent to diversion, two cases have been dismissed and five are pending disposition.

These examples are a fraction of elderly financial crimes cases charged worldwide. Financial crimes against the elderly are growing internationally because many countries are experiencing graying populations. I can easily see the day when crimes like these replace employee theft as the standard-issue blue jeans of fraud.

Read part one of this article on, and read how Annette looked at the growing incidence of family members who defraud their aging relatives and the similarities of these miscreants to traditional occupational fraudsters.