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Busting Fraud Rings: The Cases of Healthcare & Financial Services
October 9, 2013
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Criminal assaults on healthcare and financials services
It’s about to get a lot worse…
All Content is Confidential and/or Proprietary; © 2011 Bluewater InternationalAll Content is Confidential and/or Proprietary; © 2011 Bluewater International
Bad Actors Not Constrained by…
Bad Actors Know…• Thresholds for action so that investigations &
prosecutions not triggered• Information sharing limitations• How to appear legitimate – customers,
companies...• Softer targets• How long it takes to discover schemes• Vulnerabilities of processes and supply chains• Identities – real & synthetic - can facilitate all
criminal activities
Bad Actors Modus Operandi…
• Most schemes are variations of old ones – bust outs, money laundering, insider threats, provider fraud.
• Recycle data elements in complex cases• Not lone wolves – work in formal or informal
rings and groups– Specialized skills– Communications– Conduct “commerce”
• “Adopt” and compromise new technology
Fraud Prediction: NJ Synthetic Identity Bust-Out Case
Synthetic identities, created through the recycling of real identity information, are the key to credit bust out schemes. Case summary:•Fraud ring of 18 individuals perpetrated a bust-out scheme using synthetic identities, netting over $200 million •Set up legitimate looking accounts and built credit over several years (2008 – 2012)•Utilized synthetic identities but many of the data points were used repeatedly•Magnitude: 7000 fake identities, 25,000 fake credit cards, and 1,800 fake drop box accounts for receiving snail mail opened•Scheme also included fraudulent bank accounts, over 80 phony companies, and collusive merchants
Healthcare: Florida Medicare & Medicaid Fraud Case
• Health Care Solutions Network billed $63M for purported services from 2004 – 2011
• Therapists and staff altered, fabricated, & forged thousands of documents to support scheme.
• “Therapy” – Disney movies, bingo, & BBQs. • Company paid kickbacks to assisted living
facilities in exchange for patient referral info.• 15 defendants convicted in two Florida
locations & in one in North Carolina.
SNAs Game-Changing Predictive Analytics
• Flag schemes before they do harm, e.g. stop schemes before they bust out.
• Detect schemes earlier to reduce victimization and losses.
• Identify relationships between internal threats and external threats.
• Provide opportunity to perform “continuous analytics” after initial analysis.
• Reduce risk, fraud, and false positives.
Game-Changing Coming Attractions
• ID Fraud Pilot: One or two of the largest banks in the world
• Fraudulent Claims Pilot: National Center for Disasters
• Healthcare Risk Pilot: Florida Provider Fraud – commercial and Medicaid
