Fraud News Update 07.31.14

Fraud News

Fraud News

Fraud News Update 07.31.14: 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.

Old Habits Die Hard

A woman previously convicted on burglary and forgery charges in Prince Georges County, Maryland for posing as a realtor and renting houses she didn’t own missed her sentencing last week but claimed that was due to an illness. In support of her sickness, and missing the court date, she subsequently submitted a doctors note to the court.

What do you think the odds are that the doctors note she presented to the court was fake? If you said 100%, you’d be absolutely correct. Facing 25 years for forgery related crimes, should we really be surprised by this?

According to Maryland State’s Attorney spokesman, John Erzen, “The attending physician and the admitting physician who are listed on the paperwork hadn’t practiced at that hospital in over two years, and further, the actual paperwork itself was not even the correct paperwork for that hospital for discharge information.”

Having worked in the disability insurance industry for years, medical related forgeries are nothing new. It isn’t uncommon to see fake diagnoses, fake prescriptions and fake treatment records in support of a disability or attempt to collect an insurance benefit. With a little due diligence and close examination of the information provided, it really isn’t difficult to unravel faulty medical documentation like this. It looks good on the surface but doesn’t hold up under intense scrutiny.

Synthetic ID Theft On the Rise

In ID theft related fraud news, according to the Federal Trade Commission (FTC) synthetic ID theft has rapidly surpassed more traditional “true name” ID fraud, now accounting for the majority (upwards of 85%) of all ID theft cases.

In support of the growing trend, our Canadian neighbors to the north claim that the use of synthetic ID’s has resulted in losses of 1 billion dollars per year to Canadian citizens.

Much harder to detect, because synthetic ID’s fragment your personally identifier information (PII), synthetic ID theft poses other fraud detection challenges for individuals as the fragmented nature of the information used to create an identity flies under the radar of traditional credit reporting agencies (CRA’s) monitoring tools which are tied to real information and your actual identity.

Who says Fraud is a Paper Crime

Many people think of fraud as a victimless, paper crime. However, the reality is that fraud schemes have the potential to kill, maim or injure unwitting and innocent victims.

I was reminded of this yesterday when an indictment was announced for three individuals allegedly involved in the billing of $50,000,000 of unneeded medical procedures. This isn’t the first time this has happened and where big money’s involved it won’t be the last. Certainly however, for the indicted ring leaders, the financial rewards they reaped during the insurance fraud, outweighed other peoples risks and that’s a sad commentary.

According to the Coalition Against Insurance Fraud, “Health care scams cost Americans billions of dollars each year. Taxpayer-funded programs such as Medicare, Medicaid and others are among the biggest victims. This makes health-care fraud one of America’s largest taxpayer ripoffs.”

Healthcare fraud is “big business” as “Organized crime rings hatch many schemes. Hospital chains, individual employees and even patients can be involved — as victims or perpetrators.” Watch for more organized healthcare related schemes in our coverage of the fraud news.

Charles Ponzi is Alive and Well

Charles Ponzi may have died in 1949 but the scheme he made famous almost 100 years ago lives on and on and on. Unwitting victims, driven by greed and incredible, “quick hit” returns on their investments, continue to fall for this scam.

I was reminded that Ponzi schemes come in many different unique shapes and sizes as this week while reading a fraud news story about a Ponzi scheme involving financing for tractors and farm equipment which resulted in a $33,000.000 loss to its victims.

It’s interesting to me that Ponzi is dead but the “tried and true” method he invented for ripping people off has survived the test of time despite all the information campaigns designed to educate investors. The scheme changes slightly over the years, due to the crook’s individual flair, but the fundamentals remain the same. Wouldn’t you think that investors would have caught on by now? Are we still going to be talking about Ponzi in the fraud news 100 years from now? I certainly hope not.

Fraud In the Digital Advertising World

Last week’s blog featured a piece I wrote: Pay Per Click Fraud: The Blame Game. Fraud in the digital world is growing as are the losses. The industry has taken notice. Companies must start taking a new anti-fraud approach to this problem because the current methods clearly aren’t working.

Brown Bag Optional

In closing, I couldn’t help but talk about this story. I’ve written a lot in the past about how diverse fraud is and this news totally proves my point. Making fake wine in your Los Angeles kitchen and then pawning it off as “vintage? $20,000,000 in losses… Really?!

According to an article in, “FBI agents knocked on Kurniawan’s door, arrested him and conducted a protective sweep of his home. They found hundreds of bottles, labels, corks, stamps and notes that looked like the raw materials for making rare wines.” Harkens back to prohibition days of making beer in your basement.

This is apparently the first prosecution of its kind in federal court which is saying something to be sure. Aside from the counterfeiting charges, other charges included mail fraud, wire fraud and defrauding a finance company.

The reality is, there are so many different types of fraud and ways to commit it. Fraud comes in all sizes, shapes and in this case “flavors.”

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.