Asst. Editor, Fraud Magazine
Halloween may come once a year, but the tricks of fraudsters unfortunately happen year-round. I am happy, however, to report that there are some treats to be celebrated this year.
Trick: Countrywide, later bought by Bank of America, used a program called "The Hustle" to fast track mortgage loans without checking for fraud, then sold the loans to Freddie Mac and Fannie Mae, where they often defaulted, to the tune of a cool $1 billion. Countrywide did this while at the same time telling officials that they had tightened their standards.
Treat: A jury voted unanimously that Bank of America was guilty of fraud because of that program.
Trick: Abbott Laboratories actively marketed their drug Depakote, used for bipolar disorder, migraines, and epileptic seizures, for uses other than those the FDA approved. It claimed that doctors could prescribe the drug for schizophrenia and for the aggression that stems from the beginning stages of dementia. This wasn't the case that it had good evidence backing up their claims — it had conducted no studies or trials testing Depakote for these other uses. It "had in fact halted clinical trials that had been undertaken to determine if Depakote was useful in treating other issues because it found that the drug caused some concerning side effects."
Treat: The Justice Department ordered the company to pay more than $1.5 billion.
Trick: Tax return fraud is rampant - someone here at the ACFE discovered that he had been a victim when he tried to file his tax return and was told that a tax return with his Social Security number had already been filed. The Wall Street Journal reported in January that, "The Treasury Inspector General for Tax Administration last summer reported discovering an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion."
Treat: Recently, a sting in Miami nabbed 45 people accused of running a huge tax fraud scheme in which the group stole at least 22,000 identities to attempt to receive $38 million in tax refunds (around $11 million was paid).
So as you continue to fight fraud tricksters, remember that there are always treats in the form of prosecutions, arrests and restitution.