Case Studies

Phony drug rehab facilities addicted to fraud

When the U.S. Affordable Care Act was enacted in 2010, the for-profit drug rehab industry was essentially given a blank check to treat people struggling with addiction. In the decade since, many of these underregulated businesses — rife with fraud, waste and abuse — have commoditized addicts. Through the lens of a recent high-profile criminal case in California, here’s the background on the issue, and some advice from experts on how to combat this unique type of provider fraud.

No truce in cyberwars

With people increasingly living their lives online, fraudsters have never had easier access to potential victims. COVID-19 has only accelerated that trend. Indeed, business is booming for cybercriminals now focused on high-value organizations. Fraud Magazine talks to cyber expert Robert Herjavec and CFEs about how best to tackle this ever-evolving threat.

The case of the disappearing printer ink

Despite futurists’ predictions, we don’t live in a paperless business world. Printer ink and toner are still an expensive necessity. Fraudsters depend on ink costing organizations more than caviar. Here’s how to prevent this asset misappropriation and possibly save millions.

Doctoring the books

These case studies will help inoculate medical practices against fraud through sound ACFE principles — from financial oversight to segregation of duties.

Manhunters: How we took down Pablo Escobar

Mass-screening interview pivotal in targeting gunnery sergeant

At a U.S. military base, 2,400 rounds of government ammunition were missing. This NCIS special agent suspected a Marine Corps gunnery sergeant, but he needed definite proof. The special agent used an unusual mass-screening interview to discover evidence that ultimately led to the gunnery sergeant’s conviction.

Ignore waving red flags? Pay the cost

Organizations can’t afford to be oblivious. Anti-fraud professionals are trained to be skeptical. They should teach their “trust but verify” skills to all in their spheres. Here are some cases in which the players didn’t see (or refused to acknowledge) flaming-red flying flags and paid the cost in loss of cash and reputations.

‘A wink and a nod’ can’t rename high-tech government bribes

Raushi Conrad was a longtime, well-liked U.S. federal government high-tech specialist. He bucked the stereotype of the aloof, arrogant IT worker. But an anonymous email led to an investigation that showed he’d committed a one-man $1 million internal fraud scheme that involved chicken restaurants, computer viruses and “wink-and-a-nod” briberies. Here’s how to fend off similar high-tech crimes.

The overlooked factor

A business can legitimately sell its outstanding invoices for a percentage of their face value to receive money quickly to expedite cash flow. The process allows nearly $3 trillion in transactions per year worldwide. However, invoice factoring is vulnerable to fraudsters. This case shows red flags and susceptibilities.

One step forward, two steps back

Fraud examiners are always working to persuade management to search for internal fraud and adopt wise prevention controls. However, anti-fraud professionals can only give their best counsel and then work hard for a good outcome. Here are a fraud examiner’s early successes in a case and later frustrating management decisions. Regardless, he’s not daunted.

Study illicit ‘exfiltration’ and cryptocurrency to prevent fraud

Cryptocurrencies and cybercriminals aren’t going anywhere. Here’s how some fraud examiners discovered systematic patterns of attacker activity at a bank and instituted controls that protected the institution and helped a cryptocurrency exchange prevent future attacks.

Teaming with anti-fraud pros of many stripes

Opportunistic fraudsters often have an advantage over CFEs: They can freely and spontaneously select co-conspirators by skill, position and corruptibility. To level the playing field, CFEs can work more closely with other types of anti-corruption practitioners. Their experience and techniques, when combined with ours, frequently produce extraordinary synergies that outfox versatile criminals.