Fraud News Update 09.11.14: This week’s Fraud Solutions news update features: A tribute to America, pee-pee fraud (no kidding), a healthcare embezzlement with a familial twist, a different type of disaster fraud, a brown bag double-header, another executive with their hand in the cookie jar (Really?), speaking of cookies – Elves collecting unemployment and lastly we pass the offering plate around again with even more ministerial fraud.
Read on for more topical information and our insights, observations and unique commentary on the weekly fraud news.
Today’s fraud news update edition pays tribute to America and those who senselessly lost their lives in the 9/11 attack on our great country. We also honor those in the military, law enforcement and intelligence communities who tirelessly pursued justice for the victims and their families, while making America a safer place to live. “Never forget!”
One of the unique things about being a fraud professional is the uniqueness of the crime. Fraud comes in all sizes, types, shapes and, in this case, liquids. I’ve heard tales of this before but given what’s at stake for testing positive, its likely more common than we think. Imagine the conversation between inmates in prison:
What are you in for?
Urinalysis fraud! (Hard to look tough saying that!)
The Family that Frauds Together
We’ve written about fraud’s familial connection in the past and the number of cases where various family members are all involved. This is something you don’t see as often in various types of physical crimes. Is there a more special bond than that between a mother and her son?
In this fraud news, according to the government a mother (former CFO of healthcare company) and her son have agreed to plead guilty in a healthcare fraud embezzlement case and testify against others in exchange for reduced sentencing. Apparently, the rats never go down with the ship. The U.S. Attorneys Office felt compelled to point out that someone used $15 of the stolen funds to buy a membership to an adult website.
The possibility of reduced sentences suggests there may be A LOT more to this story. Stay tuned.
In other family fraud news…
Look, up in the sky, it’s disaster fraud, no it’s phantom billing fraud, no it’s a kickback scheme! In typical Illinois fashion (the poster child for “pay to play” politics), this fraud case has it all. In previous fraud news updates, we’ve written extensively about the growing trend of fraud committed post disasters. The twist here: the alleged fraud happened “pre-disaster” according to the government who recently arrested a Cook County employee for his role.
Brown Bag Doubleheader
In a story we’ve covered extensively in previous Fraud News Updates, this California wine connoisseur will “age nicely” for years in a federal prison for his role in making, faking and selling counterfeit wine from his kitchen.
In other fraud news of the vine, this fraud by a former Vice President at The Wine Tasting Network (a subsidiary of 1-800-Flowers.com) adds to an industry already bubbling over the counterfeiting story above.
For those of you who believe the wine industry lacks intrigue: fraud followed this individual from one wine company to another and in this case a phantom compliance scheme was used to steal from the company. Prior to sentencing, suspect fled country for 8 months and lived in Mexico before being located and arrested by the F.B.I near Puerto Vallarta.
If you think a big part of fraud isn’t reputational damage, 1-800-Flowers.com’s reaction is telling: they shuttered their Napa organization where the problem occurred and moved it to Chicago.
Who Watches the Executives?
There are so many embezzlement cases in the news right now, it’s mind-boggling. In this fraud news story, but another executive was caught with their hand in the company cookie jar. Losses at 600k (they’re lucky it wasn’t much, much more as cases are running into the millions these days). This brings up two questions:
1) Who’s watching the executives?
2) In this day and age, knowing what we know about the significant risk from insider theft, why do companies not have more oversight on positions with fiduciary responsibilities?
Wonder if Godfrey Keebler’s Rolling Over in His Grave?
In this cookie fraud news, the U.S. Attorney’s Office announced this week that 16 Keebler employees were indicted for unemployment fraud. “Oh Fudge!” The Keebler elves can’t be too happy about this. Think the Keebler public relations department, and their parent company (Kellogg), are working overtime?
Chapter and Verse
Lastly, what would a weekly Fraud Solutions news update be without a heaping spoonful of pastoral “praise god and pass the potatoes” fraud?
Speaks for itself, no commentary necessary.
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.
Those are our insights. What are yours?