Archive for the ‘financial crime and fraud’ Category

Assessing the Merits of Photo EBT Cards in the Supplemental Nutrition Assistance Program

March 31, 2015 Comments off

Assessing the Merits of Photo EBT Cards in the Supplemental Nutrition Assistance Program
Source: Urban Institute

In seeking to reduce the trafficking of benefits in the Supplemental Nutrition Assistance Program (SNAP), states are considering policies to require that SNAP electronic benefit transfer (EBT) cards include a photograph of the household head. Such policies have sparked controversy, placing in direct conflict the desires to bolster program integrity with the statutory rights of SNAP household members to utilize their program benefits and receive equal customer treatment. Drawing on Massachusetts’ 2013 implementation of a photo EBT policy, this brief suggests that such policies are not a cost-effective means to promote program integrity and may hinder benefit access

Annual Report of the Departments of Health and Human Services and Justice: Health Care Fraud and Abuse Control Program FY 2014

March 26, 2015 Comments off

Annual Report of the Departments of Health and Human Services and Justice: Health Care Fraud and Abuse Control Program FY 2014 (PDF)
Source: U.S. Department of Health and Human Services/U.S. Department of Justice

During Fiscal Year (FY) 2014, the Federal government won or negotiated over $2.3 billion in health care fraud judgments and settlements , and it attained additional administrative impositions in health care fraud cases and proceedings. As a result of these efforts, as well as those of preceding years, in FY 2014, approximately $3.3 billion returned to the Federal government or paid to private persons. Of this $3.3 billion, the Medicare Trust Funds3 received transfers of approximately $1.9 billion during this period, and over $523 million in Federal Medicaid money was similarly transferred separately to the Treasury as a result of these efforts. The HCFAC account has returned over $27.8 billion to the Medicare Trust Funds since the inception of the Program in 1997.

In FY 2014, the Department of Justice (DOJ) opened 924 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 496 cases involving 805 defendants. A total of 734 defendants were convicted of health care fraud-related crimes during the year. Also in FY 2014, DOJ opened 782 new civil health care fraud investigations and had 957 civil health care fraud matters pending at the end of the fiscal year. In FY 2014, the FBI investigative efforts resulted in over 605 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 142 health care fraud criminal enterprises.

NGOs and money laundering: Adapting EU rules to engage NGOs better

March 17, 2015 Comments off

NGOs and money laundering: Adapting EU rules to engage NGOs better
Source: European Parliamentary Research Service

Money laundering (ML) is a major global concern. The minimum identifiable direct costs of organised crime in the European Union (EU) are estimated at around €166 billion a year. Europol, the EU’s law enforcement agency and Eurojust, the EU’s Judicial Cooperation Unit, estimate the minimum costs of fighting organised crime at EU level amount to €210 million a year.

To efficiently tackle ML the EU has stepped up cooperation with civil society, including non-governmental organisations (NGOs). NGOs are engaged as collectors of relevant information on illicit activities, and in developing standards and implementing anti-ML rules. At the same time, however, NGOs are considered ‘subjects at risk’ in the ML framework, either as fronts for terrorist organisations that raise and transfer funds, or as legitimate enterprises that indirectly support the aims of terrorist organisations.

This double-sided position for NGOs may impact on the efficacy of the measures currently in place at EU and international level to certify their transparency and accountability. NGOs, in turn, see such attempts to regulate their activities as a threat to their independence, and thus occasionally resist them.

Minding the Identity Gaps

March 16, 2015 Comments off

Minding the Identity Gaps
Source: Social Science Research Network

In inclusion circles, the issue of digital identity tends to be dominated by the perspectives of law enforcement (anti-money laundering and – terrorist financing), legal compliance (how long records need to be kept), and technological implementation choices (phones or cards, biometric or not). But what needs to be at the center is how to manage the competing interests of providers and their clients over customer information. We examine three distinct trust gaps that define the core problem of digital identities: the confidence – or security – with which identities can be asserted and confirmed, the control – or privacy – with which personal information associated with one´s identity can be revealed and distributed, and the relevance and accuracy of the inferences – or reputations – that are drawn from people´ personal information and the history of interactions.

CRS — The EMV Chip Card Transition: Background, Status, and Issues for Congress (February 26, 2015)

March 13, 2015 Comments off

The EMV Chip Card Transition: Background, Status, and Issues for Congress (PDF)
Source: Congressional Research Service (via Federation of American Scientists)

Consumer financial card fraud due to data breaches of card information is an ongoing problem in the United States. The majority of breaches are carried out against point-of-sale (POS) systems, and are facilitated by what many consider to be the weak link in the U.S. retail sales payment process: the continued use of magnetic stripe cards (also referred to as stripe-and-signature cards). These cards are what most U.S. consumers think of when referring to financial cards.

In much of the rest of the world, cards that provide a much higher level of security for conducting sales transactions are used: EMV cards, named for the coalition of Europay, MasterCard, and Visa (the EMV Coalition or EMVCo) that developed the specifications for the system in the 1990s. EMV cards store card information on an embedded microchip and are more commonly called chip cards. With these cards, instead of swiping and signing to make a payment, the cardholder inserts the card into the POS machine, then either enters a personal identification number (PIN) or signs to verify the transaction. Fraud is significantly more difficult to carry out against chip cards, but financial institutions in the United States have until recently issued stripe cards almost exclusively.

TIGTA Testimony: “Tax Schemes and Scams During the 2015 Filing Season” (Senate Finance Committee)

March 12, 2015 Comments off

Testimony: “Tax Schemes and Scams During the 2015 Filing Season” (PDF)
Source: Treasury Inspector General for Tax Administration (before the U.S. Senate Finance Committee)

Tax scams are nothing new. For at least the last decade, the IRS has provided the public with information about what it sees as the “Dirty Dozen” tax scams on its website. These scams range from offshore tax avoidance to fake charities and inflated refund claims. Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter. However, many of these scams peak during the filing season as people prepare their returns or utilize the services of paid preparers.

The 2015 filing season has unfortunately brought more of the same. However, there are two tax scams in particular that are among the most pernicious and dangerous. They have proven to be surprisingly effective and fast ways to steal taxpayers’ money, and in this fast-paced electronic environment, the money can be gone before the victims ever realize they have been scammed.

The phone impersonation scam has proven to be so large that it is one of my agency’s top priorities, and it has also landed at the top of the IRS’s “Dirty Dozen” tax scams this year.

The lottery winnings scam we are seeing this filing season is a continuation of an older scam. It starts with an e-mail or telephone call stating that you have won the lottery and in order to collect the winnings, you need to send money to prepay the tax to the IRS.

Identity Theft Tops FTC’s Consumer Complaint Categories Again in 2014

February 27, 2015 Comments off

Identity Theft Tops FTC’s Consumer Complaint Categories Again in 2014
Source: Federal Trade Commission

Identity theft topped the Federal Trade Commission’s national ranking of consumer complaints for the 15th consecutive year, while the agency also recorded a large increase in the number of complaints about so-called “imposter” scams, according to the FTC’s 2014 Consumer Sentinel Network Data Book, which was released today.

Imposter scams – in which con artists impersonate government officials or others – moved into third place on the list of consumer complaints, entering the top three complaint categories for the first time. The increase in imposter scams was led by a sharp jump in complaints about IRS and other government imposter scams. Debt collection held steady as the second-most-reported complaint.


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