Fraud News Update 10.23.14

Fraud News

Fraud News

Fraud News Update 10.23.14: This week’s Fraud Solutions news update features: Lying About Where You (Really) Live (Residency Fraud), Practicing To Be A Politician (Campaign Fraud), The Other Cleat Drops (Academic Issues Continue At ND), Point-Counterpoint (GA Debates SNAP Fraud Prevention Method), Fraud Firestorm (Using Fire To Your Financial Advantage), Up In Smoke (Reefer Regulation) and Feds Bring the Spyware Heat (1st criminal case involving mobile device spyware app.).

Read on for more topical information and our insights, observations and unique commentary on the weekly fraud news.

Residency Fraud – Lying About Where You (Really) Live

Normally, we know that life imitates art…but in this case, as the story suggests, theatrical art’s imitating life. This fraud news story covers an interesting, and growing topic: school residency fraud.

If we think about fraud as a misrepresentation, which is false, and knowingly so, that is relied upon, to obtain a benefit which you aren’t entitled to, then we understand why some parents lie about where they live to get their kids into better school schools.

Public schools are public schools, right. Wrong! Not all public schools, school districts (or colleges for that matter!) are created equal.

The play: Lines in the Dust tackles the topic of residency fraud in NJ schools. But if you think that this issue is isolated to NJ schools, it isn’t. Highly rated, public school districts all around the country are dealing with the residency fraud issue and the NJ play is really the symbolic “tip of the education iceberg.”

School Enrollment Fraud Can Be Costly according to a piece on Joy Pullmann, Research Fellow, Education for The Heartland Institute concurs with her piece on residency fraud and increased academic residence verification through the use of old school investigative methods.

The fact that some parents lie about where they live is an age-old problem for K-12 schools but colleges aren’t immune from this issue either. The motive: The difference between paying in state tuition at a public college verses out-of-state tuition can be a costly one.

One user in a college-university forum at unbelievably recently posted the following question:

“Is it unethical for an out-of-state student to get in-state tuition?” (Seriously!)

I chuckled while reading one of the members responses when she said: “What is wrong is lying or manipulating the rules to gain in-state tuition. Hello, fraud!”

You nailed it, girlfriend. Yes, it’s ethically wrong, but more importantly it’s also legally wrong as well with criminal ramifications.

Interestingly, I started seeing “fraud warnings” like the one below on a number of college residency websites while researching this piece:

WARNING: “Providing false information about your citizenship, military status, and/or (Insert Your State Here) residency could result in criminal charges for perjury and/or fraud, with the possibility of imprisonment if you are convicted.”

Fraud warnings are common language on the back of claims checks issued by insurance companies as part of the regulation in many states. It appears that this language has now migrated to academic institutions as well.

Side Note: Our school district started asking us for increased proof of residency documents several years ago when our son started high school. As a taxpayer here, totally get it…protect the resources, that’s the right thing to do.

Unfortunately, however, when they contacted us about it, it was apparent that they hadn’t thought through any of the data security, access, maintenance, or data destruction issues associated with the collection of all this sensitive PII from parent’s in their district until I brought up the ID Theft ramifications to them. But that’s an entirely different article altogether.

Practicing To Be A Politician

A couple weeks ago I posted the rhetorical question: how do you know when a politician’s lying? A – “Their lips are moving.”

Clearly, while not ALL politicians are crooked, it’s easy to become jaded on the issue (living in Illinois) as the state has become the poster child for “Governor’s Gone Bad.” That, and the litany of city/state politicians who’ve been convicted for illegal acts has provided a lifetime of editorial content for the Chicago Tribune!

For once, this fraud news story isn’t about Illinois (Thank God!). However, the Florida Department of Law Enforcement must think that Yinka Adeshina was trained in Illinois because she was recently arrested and charged with several counts of fraud related to her failed political bid for (FL) Governor.

Adding insult to injury, arresting officers show up wearing garb to protect themselves from potential Ebola issues as Adeshina was returning from a 3 week vacation out of the country.

Interestingly, Adeshina’s also filed petitions to run for President of the United States in 2016. Wonder how that’s going to play out given the recent arrest.

This kind of campaign nonsense fits right in here in Illinois (vote early and often!) and ironically probably wouldn’t have even received an “Honorable Mention” award in our state’s political “Hall of Shame.” However, it appears Florida wasn’t the state to try this in.

The common theme for Adeshina’s alleged campaign donors seems to be fictitious addresses, residences, or properties that don’t exist. One thing’s certain, if she’s convicted on the campaign fraud charges there will be nothing fictitious, or non-existent, about the prison’s address.

The Other Cleat Drops (Again!) at Notre Dame

The Chicago Tribune’s reporting that the results of the academic investigation at Notre Dame, previously reported on in a Fraud News Update, are in. While the school’s not announcing the results, it’s not hard to put 2+2 together and figure out what the results of the investigation determined.

So far, several of the players have individually reported that they’re leaving the school while the fate of the others is believed to be similar but is currently unknown unless they self report.

As previously written, this issue isn’t new at Notre Dame (they’ve had several high-profile academic incidents involving athletes over the last couple years – prior to this one) AND it also isn’t new to other major D1 college sports programs either.

Academic fraud: The ball’s in ND’s court. Let’s see if their academic-athletic department response to preventing these alleged cheating issues going forward has any substance, and teeth, to it or are just empty (win at all costs) attitudes from the President and Head Football Coach. Talking strengthening academic controls is one thing…actually DOING so is quite another!

Point – Counterpoint

If this fraud news story were a 1977 edition of SNL’s Weekend Update starring Jane Curtin and Dan Aykroyd, it might go a little something like this:

“Jane: Dan, you sadistic, elitist, sexist, racist, anti-humanist pig!”

“Dan: Jane, you ignorant, misguided slut! Once again, you missed the point entirely.”

However, a debate about SNAP fraud prevention measures in GA (Will photo IDs for food stamps prevent fraud?) between State Sen. Don Balfour, a Republican, representing Georgia District 9 and Melissa Johnson, a policy analyst with the Georgia Budget & Policy Institute, was slightly more civil.

Although, with a cost estimate of almost $8,000,000 to implement the program in GA, their points of view are distinctly different on whether spending the money will reduce SNAP fraud:

Point: Photo ID’s are an effective prevention method in the battle against SNAP fraud (Balfour).

Counterpoint: Given how the crime’s committed, photo ID’s are a misguided use of taxpayer dollars (Johnson).

Myself: Do I think that introducing this fraud prevention method will help? Possibly, but at what cost and with what results? Photo ID’s likely aren’t the answer given the validity of the point about how the crime’s currently being committed and the involvement of store insiders. Johnson nailed that.

So the question is: Will photo ID’s for recipients reduce SNAP fraud at least marginally Perhaps, but I don’t think it will generate the kind of ROI they’re predicting and I offer these two words into the equation: “counterfeit cards.”

IMHO: The bang for the deterrent, photo ID buck, just doesn’t appear to be there for this one.

What side of the fence do you fall on?

Fraud Firestorm

The extent to which this San Diego couple is accused of committing fraud after the 2007 Southern California Witch Creek Fire is truly impressive in kind of an insurance-mortgage-equity loan-funding-bankruptcy fraud kind of way.

The totality of frauds committed by individual suspects across a variety of spectrum’s and individuals taking advantage of disasters are topics we’ve covered in past Fraud News Updates.

These folks just might be poker players because if they did all the things they’re accused of doing in this fraud news story after the fire, they definitely “went all in” to take advantage of the system and their original (burnt to the ground) misfortune.

Up In Smoke – Reefer Regulation

In what more closely resembles the plot from Up in Smoke, (a 1978 Cheech and Chong movie), we’ve learned that the SEC is jumping into the pot business. You KNEW this was going to happen sooner or later. Well, they aren’t actually getting into the pot business per se but initiating investigations into those involved, and investing, in the business.

According to this fraud news story in the NY Post, “The concern is that these people are better at putting out press releases and manipulating stocks (FNU: Loosely translated: blowing smoke about their company to investors) than they are at running a real business.”

The SEC isn’t investigating because it’s the pot business but because they’re tasked with market regulation and enforcement – investigating securities across all industries, which are fraudulently manipulated by investors to make profits they aren’t otherwise entitled to.

So, far no word of wrongdoing on the part of anyone involved so we’ll just follow this breaking news story around as the Labrador eats the stash.

Investigating reefer madness (Codename “Lardass” – that’s “Hard-hat”)…calling Sgt. Stedenko.

Feds Bring the Spyware Heat

Finally, in this fraud news story apparently StealthGenie wasn’t so “stealthy” because it was definitely on the feds radar screen. (Loosely Translated: They were spying on the spyware app maker). The result, a Pakistani citizen behind the StealthGenie product was arrested in LA last Saturday based on an indictment issued in August.

This DOJ/FBI Press Release describes the “first criminal case involving the advertisement and sale of a mobile device spyware (Stealth Genie) app.”

Just an indictment…presumed innocent until proven guilty in a court of law (and all that other legalese). Expect to see more of this in the future.

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?