The Issue of Agenda Electricity Theft - Tampa Bay Chapter Utility frauds.pdf · 5/11/2011 1 The...

5/11/2011

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The Issue of The Issue of Electricity TheftElectricity Theft

Applications for CFEs

Presented by: Johnnie Huneycutt CFE, CPP

AgendaAgenda

• Slides 1 through 8 = Potatoes

• Slides 9 through 21 = Meat & Potatoes

• Slides 22 through 25 = Meat or Vegetarian Delight

Electric & Gas Industry Electric & Gas Industry StatsStats

• Approximately 3,275 currently regulated Electric and Gas entities in the U.S.

• Divided into – Investor owned – publicly owned –Cooperatives – and Federal utilities

• Investor owned Electric utilities (about 6.5% of total U.S.) = $253 Billion in Revenues & account for 65% of all power production and serve approximately 71% of ultimate consumers.

• TECO ENERGY = Investor owned 3.5 Billion – Approx. 675,000 electric and 1 million total for electric and gas customers.

From Fraud MagazineFrom Fraud Magazine

TEC Departments TEC Departments Thefts and Fraud Common to UtilitiesThefts and Fraud Common to Utilities

• Copper Theft & Electricity Theft

• Customer Representative / Billing schemes

• Credit card Payment fraud & ID Theft

• Customer Credit policy related fraud

• Debit & Credit card fraud

• Purchasing & Contracts Fraud

• Employee theft issues

• Ethics & Compliance issues

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Role of Corporate Security at TECRole of Corporate Security at TEC

• Security Consulting

• Emergency Management

• Workplace violence

• Investigations o Crimes Against Company

o Internal Thefts / Fraud

o Due Diligence

o Incident handling

o Liaison with Risk Mgmt.- EEOC- H/R & Revenue Protection (Electric Theft Group)

• Guard Force Management

• Executive Protection

• Security Compliance & Cyber Security

Role of the Corporate Role of the Corporate InvestigatorInvestigator

• Have a comprehensive knowledge of the Corporation and its assets

• Have a thorough understanding of Risk, Liabilities, and Mitigation strategies.

• Effectively provide viable security solutions on behalf of the Corporation.

Electricity Theft Electricity Theft -- A Global ProblemA Global Problem

• World wide problem

• Often called “line loss” – no exact means to measure

• Is both “Commercial and Residential” problem

• 2 general means of theft – before Meter and at Meter

• Generally prosecuted as a misdemeanor

“Trespass and larceny with relation to utility fixtures; in most states. - Florida FSS = 812.14 (2) (C)

Any person who willfully violates paragraph (2)(a), paragraph (2)(b), or paragraph (2)(c) commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.

Common Common motivations aremotivations are: : CresseyCressey Fraud TriangleFraud Triangle

• Justification /rationalization “Company is so big / should be free”

• Opportunity – meter usually on the back of house – out of sight

• Needs based – Can’t afford it -common for low income & residential

• 50 % er’s - if not for free – I will pay half – but that is all!

• I have a grow house and don’t want to be detected by extreme use

Marijuana Inc.Marijuana Inc. Indoor Hobby Indoor Hobby

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Some BudsSome BudsMy Best Bud !My Best Bud !

Single timer Single timer –– Multiple Multiple lights lights

Multiple TimersMultiple Timers

Elaborate Relay PanelsElaborate Relay Panels Tap in front of Meter Tap in front of Meter

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Some Dangerous Some Dangerous SituationsSituations

Stolen meter / switching meters Stolen meter / switching meters

(50%)(50%)

Remote Switch to turn off Remote Switch to turn off and onand on

wire / hole in glasswire / hole in glass

Price of Admission for Price of Admission for One Crime!One Crime!-- 10K10K Industry ResponsesIndustry Responses

• Automated / Remote metering

• Specialty locking rings & other tamper resistant devices

• Specialized training – ie. Law enforcement type

• Specialized teams of personnel within the utilities

• Media attention

• Smart Grid Technologies

• Electric Theft organizations (Furpa – Surpa)

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Impact for CFE’sImpact for CFE’s

• Confrontational interactions

• Knowledge of Statutes – applicable laws

• Interview & interrogation techniques

• Discovery and rules of evidence – real & forensic

• Reliance on law enforcement

• Liaison with States Attorney

• Case management & investigation reports

• Court proceedings & presentations & testimony

• Restitution claims & judgments

Questions