From the President

Gold standard for inspectors general

Michael Horowitz, the inspector general for the U.S. Department of Justice, has been described as the gold standard for his profession, a fair-minded straight shooter and a skilled investigator who sticks to the facts. From his time as a junior prosecutor hunting down corrupt cops in New York City in the 1990s to his most recent role as chair of the Pandemic Response Accountability Committee (PRAC) — the federal watchdog created to oversee $5 trillion in COVID-related emergency funds — Horowitz has spent decades fighting fraud and corruption. He’s this year’s Cressey Award winner, which the ACFE bestows annually for a lifetime of achievement in the detection and deterrence of fraud, and the subject for this issue’s cover story in Fraud Magazine.

Horowitz estimates that over $100 billion of the COVID-relief money was siphoned off improperly, though it may be years before a final number is tallied. As many of us know, governments around the world provided relief to individuals and businesses, throwing many controls out the window to get monies to those impacted by the pandemic as quickly as possible. With little or no effort made to identify recipients of those funds, the situation was “an open door for fraudsters to walk right in,” says Horowitz.

To help PRAC in the daunting task of identifying fraudulent activity amid this massive influx of cash, Horowitz and his team took a page out of the successful but now obsolete data analytics platform used to track the distribution of aid money during the Great Recession. Among other things, that old platform allowed inspectors general to mine data linked to contractors and grantees, and quickly make checks against criminal records. However, PRAC’s new Pandemic Analytics Center of Excellence (PACE) platform does that and more.

In one month alone, PACE identified more than 69,000 questionable Social Security numbers that were used to obtain $5.4 billion of pandemic loans and grants. PRAC’s use of data analytics underscores the importance of technology in fraud detection and prevention. Indeed, the duration of fraud in organizations with proactive data monitoring and analysis was less than half when compared to those that didn’t employ this control, according to the ACFE’s Occupational Fraud 2022: A Report to the Nations.

And organizations are quickly adapting to the new technological landscape. The ACFE’s 2022 Anti-Fraud Technology Benchmarking Report found that the use of artificial intelligence and machine learning in anti-fraud programs is expected to more than double over the next two years, with 60% of organizations eyeing an increase in budgets for anti-fraud technology over that period.

Horowitz has called PRAC a new model for conducting oversight. That’s partly thanks to its data analytics but also due to its collaborative efforts with other federal, state and local government agencies. Fraudsters have taken advantage of poor communication among state and local agencies to falsely apply for aid in multiple jurisdictions. Information sharing across government, or indeed at corporations, will go a long way toward catching fraud sooner, or hopefully, stopping it altogether.

CFEs are often asked about the amount of fraud in the world and whether it’s worth their efforts to fight it and prevent future crimes. As Horowitz says, it isn’t an all-or-nothing approach. Rather, the more we do, the more we can stop.

Bruce Dorris, J.D., CFE, CPA, is president and CEO of the ACFE. Contact him at: