Fraud News Update 08.14.14

Fraud News

Fraud News

Fraud News Update 08.14.14: In reviewing our weekly fraud news feed, we’ve noticed quite a few stories that tie nicely together with posts we’ve written on a particular topic. This presents us with an excellent opportunity to update stories or themes we’re focusing on each week and enhance the content provided to readers of the Fraud Solutions blog.

Theft of Trade Secrets “Drones” On

One of the themes we’ve been writing about lately involves industrial espionage, the theft of trade secrets and intellectual property loss. Drones are hot right now and have cool names like the RQ-21A Blackjack.

So, consider this scenario: let’s say you get hired to write a maintenance manual for a company’s technical product. When the project is completed, as a little going away present to remember you by, you steal a ton of their trade secret information.

Then, to be forthright, you contact the company and tell them that you stole the information and graciously offer to sell their own information back to them for $400,000. Oh, and along the way you contact foreign governments to see if they’re interested.

Sound far-fetched? Well, that’s exactly what happened in this case. When faced with this kind of situation, what’s a company to do? Contact the Feds. You don’t have to “pay to play.”

Family Fraud

In a recent blog post we wrote, we briefly examined the relationship between fraud and family. Aside from the fact that both words start with the same letter, there seems to be a direct correlation. In that piece, we looked at the role that parents and their children play in committing fraud crimes.

In this family fraud affair, the feds allege that it’s purely a husband-wife deal. Some of the kids used in claims for benefits  fictitious while one of the couple’s real children disappeared under what authorities are describing as “suspicious circumstances.” What a tangled web we weave.

While Tony Soprano might say “Fa Get About It” local authorities aren’t forgetting about the disappearance until they solve the case.

Deepwater Horizon Disaster Fraud Convictions

In our fraud news update recently we discussed convictions associated with disasters and the Deepwater Horizon oil spill. The convictions from that incident spill on years after it occurred. Unlike some jurisdictions, where US Attorney’s Offices have large case loss prosecution thresholds, authorities are showing no mercy for the theft of small loss amounts as evidenced by this case.

As If Cars Don’t Cost Enough Already

Parts is parts… well, maybe not. When automotive parts are more expensive than they should be and an international group “conspires for ten years to rig bids and fix prices” people eventually take notice. To date: 36 individuals have been charged, 27 companies have already plead guilty, or agreed to plead guilty, and pay fines exceeding over 2 billion dollars.

The first individual has taken a plea and the rest will now topple like a house of cards. The auto supply price-fixing probe is described as being the biggest in U.S. history.

BTW, This Isn’t New

Kansas First News, recently wrote about hacking voice mail accounts. Contrary to the title there’s nothing new about this. It’s not even new in Kansas.

In fact, this type of fraud is so old it dates back to the days of kids talking through two cans and a string! In all seriousness, we said it was old in the mid 80’s when I was working in the telecom industry and that was over 30 years ago.

What this story does prove however is that there are very few really news things in the fraud space. Calling Mr. Ponzi. Being “retro” means that quite a bit of what we see now are simply new versions of old tricks. Case in point, there’s talk that “bell bottom” jeans are making a comeback. Just when you thought it was safe to clean out your closet.

Committing Fraud to Get Out of Fraud?

Individuals often stage their own deaths to collect on the proceeds of life insurance policies. Occasionally, deaths are also staged when individuals want people to stop looking for them for one reason or another. And boats are an excellent vehicle for faking your own death because the boat sinks and the body’s never recovered. Gives new meaning to the phrase “keeling over!”

Authorities suspect “foul play” here as the missing individual from this boat crash is allegedly facing fraud and theft charges in connection with services not provided to customer’s at the business where he worked. A business partner has already been charged with related crimes in that case.

While a staged death is certainly possible in this case, what’s interesting to me about the theory, given all the life insurance claims investigations I’ve been involved in over the years, is the presence of another person who survived and swam to shore. Staging one’s own death would certainly be easier and cleaner without the presence of another person on board however under the circumstances it’s not an unlikely scenario.

Most people think that staging your own death is a crime. Surprisingly enough, there aren’t fraud laws against doing so. Yet, people who’ve done so, and later turn up, are often charged with other crimes. Aside from any pending charges for non related activity, in these types of cases the fraud comes during the commission of the crime. i.e. stealing someone’s identity, credit card fraud, filing false claims for insurance proceeds, stealing someone’s boat/plane/car etc.

We’ll see what floats to the surface on this one…

Fraud News – The Bottom Line

Fraud – empowering people to break the law. It’s a way of life for some and every fraud has a story. At Fraud Solutions, fraud is our world and we’re passionate about prevention. Being proactive is key, so, follow us each week as we cover the fraud beat with added insights, information and unique commentary on stories making the fraud news.