LexisNexis® Joins with ACFE to Fight Fraud

GUEST BLOGGER

Larry Benson
Director of Strategic Alliances, Revenue Discovery and Recovery
LexisNexis Risk Solutions

We all know that companies, academia, non-profits and governments are defrauded each year and lose billions of dollars, as a result. The key impediments to stopping fraud are 1) knowing how to detect it and 2) knowing how to prevent it. By sponsoring International Fraud Awareness Week, the ACFE is helping to raise awareness and to educate the fraud prevention community about the resources, tools and best practices available to stop fraud.

My company, LexisNexis, is proud to be a supporter of International Fraud Awareness Week. LexisNexis is so committed to the concept of educating people about fraud that they asked me to author Fraud of the Day, a daily commentary on how fraud is perpetrated against government programs. At LexisNexis, we view Fraud of the Day as an important educational resource for government officials to learn how fraudsters are scamming the government, so they can be knowledgeable about fraudsters’ techniques and be better prepared to prevent them from succeeding.  

That’s really what International Fraud Awareness Week is all about – fostering an opportunity for fraud prevention experts to learn what works and what doesn’t in the fight against fraud. And winning that fight begins with talking about the challenges faced by the fraud prevention community. Along those lines, here’s my take on one of the most prevalent types of fraud in the government today: identity fraud.

Identity Fraud – Why the U.S. Will Continue to Suffer

Fraud is defined as a deliberate deception or cheating intended to create an advantage or a gain. Fraud requires two specific things to take place. First, a party must purposely present a mistruth or lie. Second, a different party must accept the misrepresentation as truth.

In cases of government fraud, the accepting party is always the government agency. Federal, state and local governments often depend on self-reported information coming directly from the potential beneficiary. This information, often unsubstantiated, creates an opportunity for deception.

Government program theft is a significant issue within all benefits-based programs. At the foundation of these programs is the most basic question: “who are you?” There are a number of ways to misrepresent the identity of an individual, and the legal documents to substantiate that misrepresentation are easily created or stolen.

The ubiquitous identifier for U.S. citizens is the Social Security Administration’s (SSA) Social Security number (SSN). This number has been used for decades to uniquely identify individuals for both commercial as well as government endeavors. The SSA began issuing SSNs in 1935, with the original purpose of tracking individuals for only Social Security purposes. It has since been widely adopted as the defacto national identifier.

Printed on the Social Security card (SSC) from 1946 to 1972 was the wording “Not for Identification.”  This was printed because the SSC was, and still is, not suitable for identification – it does not have a photograph, physical description or date of birth. In fact, all the SSC does is confirm that a particular number has been issued to a particular name.

So, how is it that identity fraud is so easy to perpetrate and so difficult to stop? Because the very foundation to establish an identity is easily stolen and/or recreated. As shown above, even the SSA acknowledges that the SSC should not be used as identification, no less just the number. With just a name and matching SSN, an unscrupulous individual can quickly claim government benefits under another persons’ name/identity. The enablement of technology, especially the Internet, allows fraudsters to easily register and claim benefits under the identities of others without even having to visit the agencies’ office. 

Programs ranging from tax return submissions, to food stamps to student loans face a large percentage of identity fraud. How can this be stopped? A national identification card (NIC) must be adopted that ties in biometrics and two factor authentication. A Smart Chip embedded NIC that contains one of the following: fingerprints, facial recognition, voice print or retinal scan information must be used to verify the identity of the individual presenting the NIC. The NIC should contain four critical features: a photograph, the biometric data, an internally retained PIN that is only known to the holder, and a sequencing number allowing all government agencies to look up and access the biometric data for identity verification.

Until the U.S. is ready to move away from the 20th century methodology of identification and embraces 21st century technologies, fraud will continue to grow at triple -digit rates and continue to overrun our agencies.

To read more about how government agencies can combat and prevent fraud, visit FraudoftheDay.com.

A Week of Fraud Awareness and Prevention, Nov. 11-17

GUEST BLOGGER

Scott Patterson
ACFE Media Relations

There is still a prevailing attitude in some cultures and countries that fraud is “business as usual.” It isn’t fully regarded as the risk factor and danger to businesses that we know it to be.

That's why the excitement is building at the ACFE for this year’s International Fraud Awareness Week. We call it “Fraud Week” for short, and it’s coming up soon: Nov. 11-17, 2012. This grassroots campaign to raise fraud awareness went international in 2006 – prior to that, it was strictly a U.S.-focused affair. Ever since the ACFE expanded the scope of the campaign, we’ve had organizations from all over the world sign up as Official Supporters, and we’ve seen the participant list grow from a little more than  100 supporters six years ago, to more than 600 today.

It is free to sign up as an Official Supporter of Fraud Week, and the ACFE provides training tools and other resources to help your organization shine a spotlight on fraud.  This is truly a win-win proposition. First of all, it positions your organization as one of the key players in a movement taking a stand against fraud.  

Secondly, involvement in Fraud Week provides an opportunity for your organization to strengthen its own fraud detection and prevention methods. By educating employees about fraud and communicating the risk factors and red flags, business owners and managers are setting a strong anti-fraud “tone at the top.”

Supporters host various activities during the week to help support the cause. For example, last year, the Montana Department of Administration, Risk Management & Tort Defense Division hosted a four-hour seminar on fraud prevention awareness for managers. More than 400 managers participated in the event. This year, a collaboration between Franklin University, the National White Collar Crime Center, the Ohio Ethics Commission, the Ohio Inspector General’s Office and the Ohio Investigators Association will present a two-day training conference:  “Targeting Fraud – Safeguarding Integrity.”

Some organizations use the occasion to survey their employees to assess levels of fraud awareness within their organization. One easy way for businesses and government agencies to spread the word is by including anti-fraud information in blogs, social media, e-newsletters and other communications (among employees, clients and/or the public). There are also opportunities to contribute to awareness through media exposure.

We have a freshly redesigned website and new resources available, including a tip sheet for implementing an anti-fraud program and a “Fraud of the Day” feature (provided by LexisNexis) for government organizations. There is no better time than now to get involved and plan your Fraud Week activities.

To learn more about International Fraud Awareness Week and to add your organization as an Official Supporter, visit FraudWeek.com.

Fighting Fraud in Mumbai

GUEST BLOGGER

Alani Mundie, CFE
ACFE Law Enforcement Liaison

With more than 20 million residents and an immense array of flavors, scents and sights, Mumbai, India, is a city that overwhelms the senses. Sidewalks teeming with tourists, shoppers and vendors selling scarves, artisan crafts, fruits and jewelry border the even more crowded streets filled with Mumbai’s noisy traffic. Cars, rickshaws, busses, motorcycles and bicycles travel within inches of each other with little regard for marked traffic lanes, making transportation in Mumbai an adventure of its own.

On a recent trip to Mumbai, John Gill, J.D., CFE, ACFE’s VP-Education, and I were able to experience the chaotic traffic adventure en route to a meeting with the ACFE Mumbai Chapter. Amidst the bustling streets, the chapter is busy supporting its membership and anti-fraud efforts in the region. Chapter President Arpinder Singh, CFE, Partner and National Director of Fraud Investigation and Dispute Services at Ernst and Young, has grown the Mumbai Chapter significantly since it was formed in January 2011. Along with Chapter Secretary and Treasurer Amit Rahane, Associate Director of Fraud Investigation and Dispute Services at Ernst and Young, the two chapter leaders are actively expanding the anti-fraud training opportunities available to their members.

There are currently three ACFE Chapters in India: Mumbai, Delhi and Bangalore. The Mumbai Chapter is one of the largest, with more than 220 members from various professional sectors such as the big four accounting firms, banks, regulatory agencies and law enforcement. As the chapter continues to grow and attract professionals from in and around Mumbai, Singh and Rahane are working to keep pace with their impressive membership growth by providing an array of anti-fraud training opportunities. Chapter events for this year include a seminar on banking and insurance fraud and a conference that tackles several pertinent issues, such as: trends in retail fraud in India; the role of technology in preventing and detecting frauds; bribery and corruption; proactive fraud prevention; and many other important fraud-related topics.   

In meeting with our Mumbai Chapter, we learned of the growing presence of anti-fraud awareness in India and experienced first-hand the tremendous role that chapters have in enhancing that awareness locally. There are nearly 1,100 ACFE members in India and as our Indian membership continues to expand, we look forward to working with Indian chapter leaders to support the growth of anti-fraud efforts throughout the country.

Pictured (from left to right): Vinay Garodiya, Senior Manager, Fraud Investigation & Dispute Services, Ernst & Young; Amit Rahane, ACFE Mumbai Chapter, Secretary, Treasurer and Associate Director, Fraud Investigation & Dispute Services, Ernst & Young); Nandkumar Saravade, Director, Citi Security and Investigative Services, South Asia; Arpinder Singh, ACFE Mumbai Chapter President and Partner and India Head Fraud Investigation & Dispute Services, Ernst & Young; John Gill, ACFE VP - Education; Alani Mundie, ACFE International Law Enforcement Liaison; Satish Shenoy, Jt. General Manager,Corporate Audit Services, Larsen & Toubro Ltd.; Mukul Shrivastava, Mumbai Chapter Board Member and Executive Director, Fraud Investigation & Dispute Services, Ernst & Young

ACFE Heads to London for European Fraud Conference

AUTHOR'S POST

Mandy Moody
ACFE Social Media Specialist

The Summer Olympics will not be the only world-class event in London this year. The ACFE will bring to town a gathering of European anti-fraud professionals and world-renowned speakers at this year’s ACFE European Fraud Conference, March 25-27. From a Pre-Conference featuring the ever-changing world of social media to a Main Conference highlighting internal investigations, economic crime and the future of fraud, this year’s European Conference is a one-of-a-kind global event.

The keynote speakers present will be:

Stephen Harrison, Chief Executive, National Fraud Authority

Harrison is responsible to the Home Office for the development and delivery of 'Fighting Fraud Together,' the national fraud strategy via the work of the NFA and its partners, aiming to make the UK more resilient to, and less damaged by, fraud through an increased focus on prevention and disruption. Harrison will be presenting on how fraud-fighters from anywhere in the world can work to fight fraud together.

Carman L. Lapointe, CFE, CIA, CCSA, UN Under-Secretary-General, Office of Internal Oversight Services (OIOS) 

Lapointe was appointed as Under-Secretary-General for Internal Oversight Services in September 2010. Lapointe was Auditor General of the World Bank Group from 2004-2009 and held chief oversight positions in IFAD and a number of Canadian crown corporations, including Canada Post, the Bank of Canada and EDC. You can find more about Lapointe’s keynote about the challenges of investigation in her recent interview with ACFE Insights.

Cynthia Hetherington, CFE, President, Hetherington Group

Hetherington has more than 17 years of experience in research, investigations and corporate intelligence. She is the founder of Hetherington Group, a consulting, publishing and training firm focusing on intelligence, security and investigations. Hetherington will be leading the Pre-Conference session, Effectively Using Social Networks and Social Media in Fraud Examinations.

James D. Ratley, CFE, President and CEO, ACFE

In 1986, James D. Ratley left the Dallas Police Department to join Wells & Associates, a forensic accounting practice, where he was in charge of fraud investigations. In 1988, he was named Program Director for the ACFE and oversaw all aspects of the ACFE's training and education programs. In 2006, Mr. Ratley was named president of the ACFE. Ratley will be beginning the Main Conference by addressing the importance of conducting a strong and successful internal investigation.

Read the complete speaker bios and find more information about the upcoming 2012 ACFE European Fraud Conference.

And the ACFE's No. 1 New Year's Resolution Is...

PRESIDENT'S BLOG

James D. Ratley, CFE

ACFE President and CEO

And the ACFE’s #1 New Year’s Resolution for 2012 is…

#1: Continue to be the Best Anti-Fraud Organization in the World

From the moment we began the ACFE more than 20 years ago, we have always maintained that we don’t want to be the biggest organization, or the fanciest, or the most exclusive. We simply want be the best. We strive to provide the best benefits, the best education, the best events, the best products and the best people around to assist a membership we are proud to say spans borders, cultures and professions.

As we look ahead to a promising year, I can’t help but reflect on the record-breaking year we had at the ACFE in 2011. We had more than 2,200 attendees at our ACFE Annual Fraud Conference in San Diego, Calif., last June, setting attendance at an all-time high. Our Asia-Pacific Fraud Conference took place for the first time in Singapore last October, and we welcomed a record-number of new CFEs to the organization. We launched a newly-designed ACFE.com and continue to hear how much easier the site is to navigate and how the updated look reflects our growing and changing membership.

I encourage those of you who have “Becoming a CFE” on your list of resolutions to take advantage of the resources and people we have available here at the ACFE to help you achieve your goal. Whether you need a coach, a Review Course, tips and tricks, an organized plan or just a learned ear, we are here to get you moving in the right direction.

So, while looking ahead is exciting and a necessary step to remaining the best anti-fraud organization in the world, we also look at the many achievements and changes we have made over the last year that remind us of all that can and will be accomplished in the years to come.

Here is a recap of exactly how we plan to remain on top:

• Grow the ACFE Advisory Council
• Continue to Provide New and Relevant Courses and Events
• Expand Our International Presence
• Improve the Design and Content in Fraud Magazine

What are you hoping to achieve this year? Leave us your comments below.