Imagine that you bank with National Credit Union. Over time you begin to notice funds slowly dissipating from your account, almost unnoticeably. When you analyze your bank statements it is clear that unauthorized transactions have been taking place. You panic and immediately begin to believe that you are the latest victim of identity theft. Not knowing how to approach the problem, you contact the Credit Union, who is of no help. Unbeknownst to you and the credit union, there is a criminal among them who has helped themselves to your hard-earned money. You are not a victim of identity theft but you are, however, a victim of embezzlement.
Embezzlement is defined by Cornell University as “the fraudulent taking of personal property by someone to whom it was entrusted”. Embezzlement transactions may be so small that it goes unnoticed by most people; the offender takes a minimal amount out of each client’s account (often referred to as “skim off the top”) and ends up with a huge score without raising any red flags. How is this scheme possible? The scenario given above is an actual case. The Federal Bureau of Investigation (FBI) of Pittsburgh has reported a female Corporate Executive Officer (CEO) of the National Credit Union in West Virginia was taking money out of user accounts to pay family members’ credit cards, personal expenses, and purchase luxuries. She was also using the bank’s status to forge checks from the Valley Credit Union. As of January 2010, she has pled guilty to embezzlement and money laundering in the amount of $8,989,484.00.
The Business Journals Serving the Greater Milwaukee Area states that the average embezzlement case in 2009 was in the amount of $1 million; whereas, in 2008 the average reported case of embezzlement was $2.2 million. This drastic drop could be due to the lack of reporting or the lack of catching the perpetrator taking money from a business. The Business Journal also reports that 63% of embezzlement perpetrators are women, but men tend to embezzle two times more money when they commit this crime. Reports also indicate that most perpetrators are in their 40’s when they develop an embezzlement scheme. Reasons for this age group committing embezzlement are not described in detail but it could be attributed to a mid- life crisis or the falling economy.
The problem with embezzlement is that we entrust someone with our property and/or monies. When someone abuses that trust on such high levels, it is hard to come to terms that we misjudged the source and handed them everything of value to us. The person can be a friend, employee, spouse, co-worker, professor, or virtually anyone with status. Many people see discrepancies in the work place or in personal accounts and chose to create their own theory as to how it happened. White collar offenses are ruled out all together because we choose to believe that we have been victimized by a stranger rather than a friend or acquaintance.
According to lawyershop.com there are four points that must be proven in order to create a case against embezzlement:” 1) The relationship between the defendant and the aggrieved party was a fiduciary one, 2) The lost property came into the defendant’s possession through that relationship, 3) The defendant fraudulently assumed ownership of the property or transferred it into the ownership of another,
4) The defendant’s misappropriation of the property was intentional.” In many embezzlement cases it is difficult to prove all four of these points. Lawyershop.com lists certain signs that may help detect if a person is embezzling funds: “missing documents, holes in accounting records, a large drop in profits, a jump in business with one particular customer, customers complaining about double billing, repeated duplicate payments, numerous outstanding checks or bills, disparity between accounts payable and receivable, [and the] disappearance of petty cash.” Smaller indicators that may give the perpetrator away are: “they go out of their way to work overtime, spend more lavishly than their salary might indicate, [or] has the same address as a vendor” (lawyershop.com).
Many of the businesses that have filed claims against employees for embezzlement have been investigated by the Internal Revenue Service (IRS) before they even suspected that there was an inside source involved in missing monies. In other cases the business was in the process of being liquidated due to a large deficit acquired as a result of the embezzled funds Much of the prosecution of embezzlement depends on the findings of the employer. If an employer suspects that embezzlement is going on within their business it is up to them to report it to the FBI or the IRS so that a thorough investigation can be carried out immediately. The employer has the responsibility of locating which employees are suspects in the crime, who had access to the missing funds, and evidence to back up their claims, such as discrepancies in accounts or logs. Embezzlement is one of the most overlooked crimes because it is a crime of opportunity and is usually carried out by a trusted source. It is impossible for businesses to avoid hiring someone that has the capability to slowly swindle victims; it is a very undetectable trait. Those that commit embezzlement do not plan on getting caught, and many do get away with this crime. As long as people are greedy and conning, embezzlement is here to stay.
Works Cited
Embezzlement. (2010). Retrieved August 3, 2010, from LawyerShop.com: http://www.lawyershop.com/practice-areas/criminal-law/white-collar-crimes/embezzlement/
Institute, L. I. (2010). Embezzlement. Retrieved August 3, 2010, from Cornell University Law School: http://topics.law.cornell.edu/wex/embezzlement
Justice, D. o. (2010, January 4). Former Credit Union CEO Pleads Guilty to Embezzlement and Money Laundering. Retrieved August 3, 2010, from Department of Justice Pittsburgh: http://pittsburgh.fbi.gov/dojpressrel/pressrel10/pt010410.htm
Kirchen, R. (2010, January 15). Koss victim of top 2009 embezzlement case. Retrieved August 3, 2010, from The Business Journal Serving the Greater Milwaukee Area: http://milwaukee.bizjournals.com/milwaukee/stories/2010/01/11/daily58.html
Wednesday, August 4, 2010
Monday, July 19, 2010
Plastic Creates Financial Problems
The bank calls you to inform you of a large transaction that has just occurred on your credit card. You find out that you have just purchased over four thousand dollars worth of songs from iTunes, but the irony is that you cannot remember the last time you bought anything from that site. How is this possible? You have just been victimized by credit card fraud. What is credit card fraud? Credit card fraud is defined by www.ehow.com as “.,. the use of a credit card with the intent to commit fraud. It can be committed with a person's personal card, with a business card, a stolen card or a counterfeit card.”
According to SC Magazines a recent two year investigation has resulted in the arrests of 178 people in 12 countries for involvement in an international credit card fraud ring. The arrests were a result of 84 raids that have taken place in: “France, Italy, Germany, Ireland, Romania, Australia, Sweden, Greece, Finland, Hungary and the United States”. This “ring” is just one example of how fraud stretches nationwide and is not subject to the United States alone. These people were running an underground operation where they would take credit card information through scams and manufacture counterfeit cards to make ATM withdrawals and retail purchases. SC Magazines reports that “the police have found over 5,000 counterfeit cards and over 120,000 stolen credit card numbers…[in addition] they have found 11 laboratories” that have specialized interest in creating the counterfeit cards. These people who have been placed under arrest are believed to have run many underground operations such as: “robbery with force, fraud, extortion, sexual exploitation, and money laundering, earning $24.5 million from illegal activities.” Even though 178 have been caught for this heinous act, there are many other scams, and scam artists out there that are trying to take advantage of the public’s trust in using a piece of plastic to pay bills.
An example of how a credit card number can be obtained through a scam and used for fraudulent activities is through some of our trusted corporations that we utilize monthly to pay our bills for cell phones, electricity, cable, car, insurance, and more. This can be as simple as a business that you pay every month contacting you and reporting that you forgot to sign the check, or your payment was never received and asking you if you would like to submit a payment over the phone using a credit card. This happened in Salt Lake City just this week; according to the article “Rocky Mountain Power Warns of Credit Card Fraud”, scam artists have been reaching their consumers and telling them that their checks were not signed and then they proceed to ask for the person’s credit card information. This is not how the company conducts business, they have a standard procedure of asking for a person’s account number to verify the identity of the consumer when dealing with bills. It’s important to remember how businesses usually verify account information and to recognize these procedures when you are being contacted in response to a bill that was supposedly never paid. If you have caller identification you can always check the number, and if the phone call seems phony you may want to try contacting the businesses headquarters to verify the transaction.
These acts of fraud are not always conducted by criminals, sometimes it can be friends or family members that have gained access to our accounts over time. Just recently a blind woman had asked a trusted friend to make an online purchase of a computer bag for her, and had given her the credit card to use for payment. The card never left the woman’s possession, but weeks later another friend had found that the same card had been used to make additional purchases that the blind woman could not have made without assistance. Not knowing who would target this helpless woman, she decided to ask her friend who had made an online purchase for her if she had used the card. According to the Eastern Arizona Courier the woman admitted that she might have used the card to pay some bills by accident thinking that it was her husband’s card. The blind woman contacted her bank and informed them of the fraudulent activity on the card and the company informed her that they intended to press charges on the blind woman for letting her friend help her with the online purchases. The blind woman then informed the company that the only reason that the woman was allowed access to the card was because she was legally blind, and the company’s response was that she should have bought the item over the phone then. A phone purchase can be just as bad as giving a card to someone you trust for help because you never know who is on the other end.
Years ago we invented this ideal way of making purchases through a plastic piece that we call a credit card for the convenience of not having to carry wads of cash around, to establish credit, and to make online business transactions more efficient. Unfortunately over time the use of this item has become abused. There are ways of circumventing credit card fraud and protecting yourself from being victimized. The FBI warns that when making a purchase with a credit card you should: always make sure that the company is reputable, if online make sure the site is secure, limit purchases to within the country, always check for the security icon on a site before making a purchase, and if you suspect that your card has been stolen or is being abused report it as soon as possible. Just like every other crime possible to man, anyone can be a victim, but if you take the proper precautions and make yourself aware to some of the current scams going around your more likely keep yourself and your account secure from predators.
Works Cited
Definition of Credit Card Fraud. (2010). Retrieved July 18, 2010, from ehow.com: http://www.ehow.com/about_5085291_definition-credit-card-fraud.html
Investigations, F. B. (2010). Internet Fraud. Retrieved July 19, 2010, from FBI.gov: http://www.fbi.gov/majcases/fraud/internetschemes.htm#credcard
James, A. (2010, July 19). Rocky Mountain Power warns of Credit Card Fraud. Retrieved July 19, 2010, from KSL.com: http://www.ksl.com/?nid=148&sid=11627212&hl=12
Johnson, J. (2010, July 19). Blind woman victim of credit card fraud says friend took credit card information when helping her with an online purchase. Retrieved July 19, 2010, from Eastern Arizona Courier: http://www.eacourier.com/articles/2010/07/19/news/breaking_news/doc4c44d78639b98019652661.txt
According to SC Magazines a recent two year investigation has resulted in the arrests of 178 people in 12 countries for involvement in an international credit card fraud ring. The arrests were a result of 84 raids that have taken place in: “France, Italy, Germany, Ireland, Romania, Australia, Sweden, Greece, Finland, Hungary and the United States”. This “ring” is just one example of how fraud stretches nationwide and is not subject to the United States alone. These people were running an underground operation where they would take credit card information through scams and manufacture counterfeit cards to make ATM withdrawals and retail purchases. SC Magazines reports that “the police have found over 5,000 counterfeit cards and over 120,000 stolen credit card numbers…[in addition] they have found 11 laboratories” that have specialized interest in creating the counterfeit cards. These people who have been placed under arrest are believed to have run many underground operations such as: “robbery with force, fraud, extortion, sexual exploitation, and money laundering, earning $24.5 million from illegal activities.” Even though 178 have been caught for this heinous act, there are many other scams, and scam artists out there that are trying to take advantage of the public’s trust in using a piece of plastic to pay bills.
An example of how a credit card number can be obtained through a scam and used for fraudulent activities is through some of our trusted corporations that we utilize monthly to pay our bills for cell phones, electricity, cable, car, insurance, and more. This can be as simple as a business that you pay every month contacting you and reporting that you forgot to sign the check, or your payment was never received and asking you if you would like to submit a payment over the phone using a credit card. This happened in Salt Lake City just this week; according to the article “Rocky Mountain Power Warns of Credit Card Fraud”, scam artists have been reaching their consumers and telling them that their checks were not signed and then they proceed to ask for the person’s credit card information. This is not how the company conducts business, they have a standard procedure of asking for a person’s account number to verify the identity of the consumer when dealing with bills. It’s important to remember how businesses usually verify account information and to recognize these procedures when you are being contacted in response to a bill that was supposedly never paid. If you have caller identification you can always check the number, and if the phone call seems phony you may want to try contacting the businesses headquarters to verify the transaction.
These acts of fraud are not always conducted by criminals, sometimes it can be friends or family members that have gained access to our accounts over time. Just recently a blind woman had asked a trusted friend to make an online purchase of a computer bag for her, and had given her the credit card to use for payment. The card never left the woman’s possession, but weeks later another friend had found that the same card had been used to make additional purchases that the blind woman could not have made without assistance. Not knowing who would target this helpless woman, she decided to ask her friend who had made an online purchase for her if she had used the card. According to the Eastern Arizona Courier the woman admitted that she might have used the card to pay some bills by accident thinking that it was her husband’s card. The blind woman contacted her bank and informed them of the fraudulent activity on the card and the company informed her that they intended to press charges on the blind woman for letting her friend help her with the online purchases. The blind woman then informed the company that the only reason that the woman was allowed access to the card was because she was legally blind, and the company’s response was that she should have bought the item over the phone then. A phone purchase can be just as bad as giving a card to someone you trust for help because you never know who is on the other end.
Years ago we invented this ideal way of making purchases through a plastic piece that we call a credit card for the convenience of not having to carry wads of cash around, to establish credit, and to make online business transactions more efficient. Unfortunately over time the use of this item has become abused. There are ways of circumventing credit card fraud and protecting yourself from being victimized. The FBI warns that when making a purchase with a credit card you should: always make sure that the company is reputable, if online make sure the site is secure, limit purchases to within the country, always check for the security icon on a site before making a purchase, and if you suspect that your card has been stolen or is being abused report it as soon as possible. Just like every other crime possible to man, anyone can be a victim, but if you take the proper precautions and make yourself aware to some of the current scams going around your more likely keep yourself and your account secure from predators.
Works Cited
Definition of Credit Card Fraud. (2010). Retrieved July 18, 2010, from ehow.com: http://www.ehow.com/about_5085291_definition-credit-card-fraud.html
Investigations, F. B. (2010). Internet Fraud. Retrieved July 19, 2010, from FBI.gov: http://www.fbi.gov/majcases/fraud/internetschemes.htm#credcard
James, A. (2010, July 19). Rocky Mountain Power warns of Credit Card Fraud. Retrieved July 19, 2010, from KSL.com: http://www.ksl.com/?nid=148&sid=11627212&hl=12
Johnson, J. (2010, July 19). Blind woman victim of credit card fraud says friend took credit card information when helping her with an online purchase. Retrieved July 19, 2010, from Eastern Arizona Courier: http://www.eacourier.com/articles/2010/07/19/news/breaking_news/doc4c44d78639b98019652661.txt
Monday, July 5, 2010
HEALTH CARE FRAUD
Imagine being sick with something other than the flu or a common cold. Not knowing what is wrong with your body you call your most trusted physician in desperation. Upon your visit to the doctor you receive a two minute consultation that ends with the diagnosis of a disease that you are not familiar with. You are prescribed pain pills and medications. After a few days on the medication you are feeling worse causing you to call again for advice; and they then explain that you are experiencing severe side effects and schedule you for a follow up appointment. At that time you are prescribed alternate medications for your ailment and the same thing occurs. At what point do you stop calling your trusted physician for help? How would you feel if you saw another doctor who told you that there was no disease? If this scenario fits your life-style then you may be a victim of health care fraud. There is only one definition of the term, many signs of being a victim, and a group that is usually targeted in a scheme called health care fraud.
The government has only recently started its battle against health care fraud. In 1986 the first mention of health care fraud surfaced as the “Federal False Claims Act” (FCA); which states that any person that reports to “an officer or employee of the United States Government or a member of Armed Forces of the United States a false or fraudulent claim for payment or approval…is liable to the United States Government to pay for a civil penalty of no less than $5,000 and not more than $10,000, plus 3 times the amount of damages that are sustained because of the act of the person”. The Act was to be a cure to health care fraud which is the treatment of “ghost patients, upcoding, unbundling, and billing for unnecessary care”. Ghost patients are the people that the physicians claim to have treated but never existed or are deceased; they can also be names and information of people who are obtained through identity theft. The word upcoding refers to the billing for services that were rendered at a higher cost than the procedure or prescription entails. Unbundling is the billing for each procedure thoroughly as if each were different. Lastly billing for unnecessary care can range from falsifying treatments to prescribing treatments or medications that are not needed. The legislation did not work as a solvent to the problem of health care fraud but it is believed to be working as a deterrent. The extremely high numbers we are seeing in victims, restitution, and physicians involved in this activity are the proactive efforts of the government on schemes that have been brewing for years.
The media shows the felons that are being caught now and it giving the misperception that numbers of people being violated by health care fraud are drastically increasing and this was true in prior years. Between the years of 1995-2003 the nation saw a 7 percent decrease in pay to physicians. It was during that time that we started to see a rise in the amount of health care fraud. In fact according to the Anti-Fraud Resource Center there were more than 4 billion health care claims processed in 2007 totaling $2.26 trillion. These amounts of claims filed have a 3-10 percent fraud rate that totals between $68-$226 billion. Although this percentage seems small we can see in the dollar value the large amount of deficit. This is a lot of wasted tax dollars being spent on white-collar crime among one of the highest paying professions available. It is because of health care fraud that others are forced to pay higher premiums and out-of-pocket expenses.
One of the most horrific schemes of health care fraud recalled is a team of 3 physicians and a hospital administrator that would victimize elderly, homeless, and drug abusers for profit. These physicians were caught in 2002 after they had already made victims of approximately 750 people over a ten year span. This is only one incident that was found in a single year, and health care fraud has been happening for over two decades. They would captivate their victim’s attention through bribery such as: food, money, and cigarettes; and once they had them they would fictitiously diagnose them of symptoms by running tests that involved sticking needles into these people’s hearts.
They benefited from this practice by reporting to insurance agencies such as: Medical and Medicaid the procedures that had been done for compensation. Two people lost their lives due to this malpractice, but others were damaged physically and financially. The leader of the pack is now serving 12 ½ years in federal prison and facing approximately 12 million in restitution fees, and the others are currently serving time for their participation. There are many other stories like this one of small medical offices providing services for feign ailments just so that they can reap the benefits. It used to be easy for this type of practices to sneak through the wires because the practices were so small and there are many different insurance agencies for these places to report to. Doctor’s in most cases are a person’s saving grace as they have studied how to treat unbearable discomfort and pain. Greed and corruption is ruining the nations trust in medical practice. As we can see the motive for the actions of these people who originally studied medicine to help people has been purely demoralization due to greed, and in turn may be desperation in a deteriorating economy.
Most of the cases have the same victim profile: the elderly, homeless, and drug abusers. The reason for this is that the elderly are weak and an easy prey; plus most of their testimonies (if ever brought to court) will not stand due to memory loss, or enhanced illnesses. The homeless do not usually have access to health care so this makes it easy to accept any diagnosis for an issue that is being experienced. The drug abusers are also an easy target because they will fill any prescription that is given to them time and time again. Each time they fill a prescription this is revenue for the physician who prescribed it as they file claim to insurance agencies. The targets are of different age groups, but all the same in the aspect that they don’t have many resources, need medical attention, and are gullible to any prognosis.
In response to health care fraud congress passed new legislation and an anti-fraud organization was established. According to National Health Care Anti-Fraud Association (NHCAA) congress passed the “Health Insurance Portability and Accountability Act of 1996…which specifically established health care fraud as a federal criminal offense”. The penalties for this offense is the eligibility of a federal prison term of up to ten years with a plausible separate charge and sentence for anyone who was harmed physically due to the malpractice with a maximum of 20 years, and if a patient died due to negligence the perpetrator may become a lifer. The “Coordinated Fraud and Abuse Control Program” was also born from health care fraud and allows federal and state law enforcement to share information with private health insurers. The NHCAA is a non-profit organization that specializes in aiding efforts in the private and public sectors in the detection, investigation, prosecution, and prevention of health care fraud. The government is still fighting the battle against health care fraud but if we continue to follow the investigations we can see that most of these schemes have developed over time. The best way to aid in the battle is to: treat your health identification card like a credit card, be informed, read your policy, and most importantly report fraud when you suspect that you are a victim of it.
Works Cited
Association, N. H.-F. (2010). The Problem of Health Care Fraud. Retrieved June 4, 2010, from Anti-Fraud Resource Center: http://www.nhcaa.org/eweb/DynamicPage.aspx?webcode=anti_fraud_resource_centr&wpscode=TheProblemOfHCFraud
Centers for Medicaid and Medicare Services. (n.d.). Retrieved July 4, 2010, from US Department of Health and Human Services: http://www.cms.gov/smdl/downloads/SMD032207Att2.pdf
Health Care Statistics. (2010, July). Retrieved July 4, 2010, from HealthCareProblems.org: http://www.healthcareproblems.org/health-care-statistics.htm
Johnson, C. (2007, July 19). U.S. Targets Health-Care Fraud, Abuse. Retrieved July 4,2010, from The Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2007/07/18/AR2007071802461.html?hpid=sec-business
Levinson, H. (2010, December 26). What is Healthcare Fraud? Retrieved June 4, 2010, from Examiner.com: http://www.examiner.com/x-33884-St-Louis-Health-Insurance-Examiner~y2009m12d26-Healthcare-FraudYoure-Getting-Ripped-Off
Slade, S. R. (2000). Health Care Fraud: How far does the False Claims Act reach? Retrieved July 4, 2010, from Quackwatch: http://www.quackwatch.org/02ConsumerProtection/fca.html
The government has only recently started its battle against health care fraud. In 1986 the first mention of health care fraud surfaced as the “Federal False Claims Act” (FCA); which states that any person that reports to “an officer or employee of the United States Government or a member of Armed Forces of the United States a false or fraudulent claim for payment or approval…is liable to the United States Government to pay for a civil penalty of no less than $5,000 and not more than $10,000, plus 3 times the amount of damages that are sustained because of the act of the person”. The Act was to be a cure to health care fraud which is the treatment of “ghost patients, upcoding, unbundling, and billing for unnecessary care”. Ghost patients are the people that the physicians claim to have treated but never existed or are deceased; they can also be names and information of people who are obtained through identity theft. The word upcoding refers to the billing for services that were rendered at a higher cost than the procedure or prescription entails. Unbundling is the billing for each procedure thoroughly as if each were different. Lastly billing for unnecessary care can range from falsifying treatments to prescribing treatments or medications that are not needed. The legislation did not work as a solvent to the problem of health care fraud but it is believed to be working as a deterrent. The extremely high numbers we are seeing in victims, restitution, and physicians involved in this activity are the proactive efforts of the government on schemes that have been brewing for years.
The media shows the felons that are being caught now and it giving the misperception that numbers of people being violated by health care fraud are drastically increasing and this was true in prior years. Between the years of 1995-2003 the nation saw a 7 percent decrease in pay to physicians. It was during that time that we started to see a rise in the amount of health care fraud. In fact according to the Anti-Fraud Resource Center there were more than 4 billion health care claims processed in 2007 totaling $2.26 trillion. These amounts of claims filed have a 3-10 percent fraud rate that totals between $68-$226 billion. Although this percentage seems small we can see in the dollar value the large amount of deficit. This is a lot of wasted tax dollars being spent on white-collar crime among one of the highest paying professions available. It is because of health care fraud that others are forced to pay higher premiums and out-of-pocket expenses.
One of the most horrific schemes of health care fraud recalled is a team of 3 physicians and a hospital administrator that would victimize elderly, homeless, and drug abusers for profit. These physicians were caught in 2002 after they had already made victims of approximately 750 people over a ten year span. This is only one incident that was found in a single year, and health care fraud has been happening for over two decades. They would captivate their victim’s attention through bribery such as: food, money, and cigarettes; and once they had them they would fictitiously diagnose them of symptoms by running tests that involved sticking needles into these people’s hearts.
They benefited from this practice by reporting to insurance agencies such as: Medical and Medicaid the procedures that had been done for compensation. Two people lost their lives due to this malpractice, but others were damaged physically and financially. The leader of the pack is now serving 12 ½ years in federal prison and facing approximately 12 million in restitution fees, and the others are currently serving time for their participation. There are many other stories like this one of small medical offices providing services for feign ailments just so that they can reap the benefits. It used to be easy for this type of practices to sneak through the wires because the practices were so small and there are many different insurance agencies for these places to report to. Doctor’s in most cases are a person’s saving grace as they have studied how to treat unbearable discomfort and pain. Greed and corruption is ruining the nations trust in medical practice. As we can see the motive for the actions of these people who originally studied medicine to help people has been purely demoralization due to greed, and in turn may be desperation in a deteriorating economy.
Most of the cases have the same victim profile: the elderly, homeless, and drug abusers. The reason for this is that the elderly are weak and an easy prey; plus most of their testimonies (if ever brought to court) will not stand due to memory loss, or enhanced illnesses. The homeless do not usually have access to health care so this makes it easy to accept any diagnosis for an issue that is being experienced. The drug abusers are also an easy target because they will fill any prescription that is given to them time and time again. Each time they fill a prescription this is revenue for the physician who prescribed it as they file claim to insurance agencies. The targets are of different age groups, but all the same in the aspect that they don’t have many resources, need medical attention, and are gullible to any prognosis.
In response to health care fraud congress passed new legislation and an anti-fraud organization was established. According to National Health Care Anti-Fraud Association (NHCAA) congress passed the “Health Insurance Portability and Accountability Act of 1996…which specifically established health care fraud as a federal criminal offense”. The penalties for this offense is the eligibility of a federal prison term of up to ten years with a plausible separate charge and sentence for anyone who was harmed physically due to the malpractice with a maximum of 20 years, and if a patient died due to negligence the perpetrator may become a lifer. The “Coordinated Fraud and Abuse Control Program” was also born from health care fraud and allows federal and state law enforcement to share information with private health insurers. The NHCAA is a non-profit organization that specializes in aiding efforts in the private and public sectors in the detection, investigation, prosecution, and prevention of health care fraud. The government is still fighting the battle against health care fraud but if we continue to follow the investigations we can see that most of these schemes have developed over time. The best way to aid in the battle is to: treat your health identification card like a credit card, be informed, read your policy, and most importantly report fraud when you suspect that you are a victim of it.
Works Cited
Association, N. H.-F. (2010). The Problem of Health Care Fraud. Retrieved June 4, 2010, from Anti-Fraud Resource Center: http://www.nhcaa.org/eweb/DynamicPage.aspx?webcode=anti_fraud_resource_centr&wpscode=TheProblemOfHCFraud
Centers for Medicaid and Medicare Services. (n.d.). Retrieved July 4, 2010, from US Department of Health and Human Services: http://www.cms.gov/smdl/downloads/SMD032207Att2.pdf
Health Care Statistics. (2010, July). Retrieved July 4, 2010, from HealthCareProblems.org: http://www.healthcareproblems.org/health-care-statistics.htm
Johnson, C. (2007, July 19). U.S. Targets Health-Care Fraud, Abuse. Retrieved July 4,2010, from The Washington Post: http://www.washingtonpost.com/wp-dyn/content/article/2007/07/18/AR2007071802461.html?hpid=sec-business
Levinson, H. (2010, December 26). What is Healthcare Fraud? Retrieved June 4, 2010, from Examiner.com: http://www.examiner.com/x-33884-St-Louis-Health-Insurance-Examiner~y2009m12d26-Healthcare-FraudYoure-Getting-Ripped-Off
Slade, S. R. (2000). Health Care Fraud: How far does the False Claims Act reach? Retrieved July 4, 2010, from Quackwatch: http://www.quackwatch.org/02ConsumerProtection/fca.html
Sunday, July 4, 2010
Friday, June 25, 2010
Tuesday, June 22, 2010
Mortgage Fraud is on the Rise
A wake of fraudulent activity sweeps across America and capsizes the housing market. Its undertow carelessly sucks the life out from middle and lower classes, leaving many in ruins. Mortgage fraud is not a new face to American society but in our current economy it is drowning the survivors. According to the Federal Bureau of Investigation (FBI) mortgage fraud is defined as an “intentional misstatement, misrepresentation, or omission by an applicant or other interested parties, relied on by a lender or underwriter to provide funding for, to purchase, or to insure a mortgage loan”. The FBI separates mortgage fraud into two categories: fraud for property/housing and fraud for profit. They define fraud for property housing as the “misrepresentations by the applicant for the purpose of purchasing a property for a primary residence… [and] usually involves a single loan…[where] applicants may embellish income and conceal debt [with the] intent to repay the loan”. Fraud for profit “…involves multiple loans and elaborate schemes perpetrated to gain illicit proceeds from property sales”. Law enforcement agencies are working with industry entities all across the United States to crack down on both of these forms of fraud. They are finding fraud for profit to be the most victimizing trend in the housing market.
According to the FBI the increase in mortgage fraud stems from the fact that no single agency holds the responsibility of monitoring mortgage fraud. Our nation is currently running the largest collective enforcement ever brought to bear mortgage fraud known as Operation Stolen Dreams, according to the article “Mortgage Fraud and News”. In the article we are told that “… mortgage fraud impacts us in a personal way: it directly affects our friends, families, neighbors, coworkers, and communities.” The impacts of mortgage fraud can be seen in the growing amount of people who have been caught in the act of, or as an accomplice, to these white collar perpetrators. Most of these fraudsters have participated in signing people up for mortgages that they should have never qualified for by fraudulently altering the amount of income that the victim grosses annually and giving them non-fixed interest rates. The victim then has to file for bankruptcy or file for a short sale because of the inflation of interest on their mortgage. This causes homes to be outbid by mortgage companies or their accomplices, known as straw buyers, who fix up the houses and turn them back to the market for profit.
As a nation we must question how long these scandals have been in practice and how many people have unknowingly fallen victim to this crime. The FBI reports that we cannot rely solely on numbers to be an accurate determinate of the money lost or the people victimized by mortgage fraud. We can, however, establish a “direct correlation between fraud and the distressed real estate market”. According to Stephanie Douglas, a special agent of the FBI, “ [the devastation] from mortgage fraud [has] resulted in widespread foreclosures, bankruptcies, and ruined lives; it [has shaken] our national economy to the core; and it severely damaged some of the world’s largest financial institutions”. Out of greed, mortgage companies that were once reputable now have corruption in their seams. Even if they survive the bust of the tainted individuals within their company, their actions have already instilled a moral panic all throughout the nation; everyone has developed awareness of the way they have operated. The housing market has fallen drastically and over the past four years we have seen a rapid decrease in the values of homes partially due to the decay of the economy and partially because people are unable afford their homes with the increasing interest rates. People who were looking forward to owning a home because of the low prices, now are afraid to invest because they have seen what damage it has done to their friends and family who have lost their homes, filed bankruptcy, and now don’t have enough credit to even qualify for an apartment. Mortgage fraud is not a new innovation but due to the collective efforts involving the FBI we are now becoming more conscious of the issue nationwide.
Every year we see an increase in mortgage fraud. According to the FBI, in 2009 there were over 1,500 reported cases (compared to 136 cases reported in 2004) and out of those cases, 822 were indicted which resulted in 494 convictions. According to the FBI’s article on “Mortgage Fraud” the first alarming signs came in December of 2006 “as payment defaults on mortgage loans were becoming more pronounced… the real estate market began declining… delinquencies and foreclosure rates kept increasing”. The mortgage crisis began in 2006 and continues to grow worse in 2010. To date we see ten times the amount of cases reported than in 2004 and we are only halfway through the year. The New York Times article “US Reveals Mortgage Fraud Crackdown” reports that so far under Operation Stolen Dreams there have been over 1,215 people charged with mortgage fraud and an estimated $2.3 billion in damages. According to the Department of Justice, in the last three and a half months there have been 485 arrests resulting in 336 convictions with a recovery of over $147 million.
The increase in mortgage fraud is in part due to failing economy as people are looking for a life preserver to stay afloat through these hard times, but in the same respect these crimes are attributing to our nations state of devastation. Not only is the amount of mortgage fraud increasing but so is our nation’s battle to indict and convict those that are contributing to this problem of fraud. We have multiple entities such as the FBI who are working hard to “compile data on mortgage fraud through suspicious activity reports (SARs) filed by federally-insured financial institutions, reports received from the Department of Housing and Urban Development-Office of the Inspector General (HUD-OIG), and complaints received from the public and mortgage industry at large”. As a nation it is important that we continue to report mortgage fraud to the FBI so that it may immediately be investigated and to prevent our fellow citizens from being victimized. Reports do not necessarily guarantee a conviction or restitution for such heinous acts, but work effectively to deploying the amount of schemes that are continuing to formulate and further our economic state into ruins.
Works Cited
Administration. (2010, June 23). "Operation Stolen Dreams" Targeting Mortgage Fraudsters in California. Retrieved June 24, 2010, from Mortgage Fraud and News: http://mortgagefraudandnews.com/2010/06/23/%e2%80%9coperation-stolen-dreams%e2%80%9d-targeting-mortgage-fraudsters-in-california/
FBI. (2010, March). Retrieved June 24, 2010, from Mortgage Fraud Overview: http://www.fbi.gov/hq/mortgage_fraud.htm
FBI. (2008). Financial Crime Reports to the Public Fiscal Year 2008. Washington D.C.: US Government Department of Justice.
Reuters. (2010, June 17). US Reveals Mortgage Fraud Crackdown. Retrieved June 24, 2010, from New York Times: http://www.nytimes.com/2010/06/18/business/18fraud.html?scp=2&sq=mortgage%20fraud&st=cse
Ritter, K. (2010, June 25). 'Operation Stolen Dreams': DOJ Arrests Nearly 500 In Mortgage Fraud Crackdown. Retrieved June 25, 2010, from The Huffington Post: http://www.huffingtonpost.com/2010/06/17/operation-stolen-dreams-d_n_615798.html
According to the FBI the increase in mortgage fraud stems from the fact that no single agency holds the responsibility of monitoring mortgage fraud. Our nation is currently running the largest collective enforcement ever brought to bear mortgage fraud known as Operation Stolen Dreams, according to the article “Mortgage Fraud and News”. In the article we are told that “… mortgage fraud impacts us in a personal way: it directly affects our friends, families, neighbors, coworkers, and communities.” The impacts of mortgage fraud can be seen in the growing amount of people who have been caught in the act of, or as an accomplice, to these white collar perpetrators. Most of these fraudsters have participated in signing people up for mortgages that they should have never qualified for by fraudulently altering the amount of income that the victim grosses annually and giving them non-fixed interest rates. The victim then has to file for bankruptcy or file for a short sale because of the inflation of interest on their mortgage. This causes homes to be outbid by mortgage companies or their accomplices, known as straw buyers, who fix up the houses and turn them back to the market for profit.
As a nation we must question how long these scandals have been in practice and how many people have unknowingly fallen victim to this crime. The FBI reports that we cannot rely solely on numbers to be an accurate determinate of the money lost or the people victimized by mortgage fraud. We can, however, establish a “direct correlation between fraud and the distressed real estate market”. According to Stephanie Douglas, a special agent of the FBI, “ [the devastation] from mortgage fraud [has] resulted in widespread foreclosures, bankruptcies, and ruined lives; it [has shaken] our national economy to the core; and it severely damaged some of the world’s largest financial institutions”. Out of greed, mortgage companies that were once reputable now have corruption in their seams. Even if they survive the bust of the tainted individuals within their company, their actions have already instilled a moral panic all throughout the nation; everyone has developed awareness of the way they have operated. The housing market has fallen drastically and over the past four years we have seen a rapid decrease in the values of homes partially due to the decay of the economy and partially because people are unable afford their homes with the increasing interest rates. People who were looking forward to owning a home because of the low prices, now are afraid to invest because they have seen what damage it has done to their friends and family who have lost their homes, filed bankruptcy, and now don’t have enough credit to even qualify for an apartment. Mortgage fraud is not a new innovation but due to the collective efforts involving the FBI we are now becoming more conscious of the issue nationwide.
Every year we see an increase in mortgage fraud. According to the FBI, in 2009 there were over 1,500 reported cases (compared to 136 cases reported in 2004) and out of those cases, 822 were indicted which resulted in 494 convictions. According to the FBI’s article on “Mortgage Fraud” the first alarming signs came in December of 2006 “as payment defaults on mortgage loans were becoming more pronounced… the real estate market began declining… delinquencies and foreclosure rates kept increasing”. The mortgage crisis began in 2006 and continues to grow worse in 2010. To date we see ten times the amount of cases reported than in 2004 and we are only halfway through the year. The New York Times article “US Reveals Mortgage Fraud Crackdown” reports that so far under Operation Stolen Dreams there have been over 1,215 people charged with mortgage fraud and an estimated $2.3 billion in damages. According to the Department of Justice, in the last three and a half months there have been 485 arrests resulting in 336 convictions with a recovery of over $147 million.
The increase in mortgage fraud is in part due to failing economy as people are looking for a life preserver to stay afloat through these hard times, but in the same respect these crimes are attributing to our nations state of devastation. Not only is the amount of mortgage fraud increasing but so is our nation’s battle to indict and convict those that are contributing to this problem of fraud. We have multiple entities such as the FBI who are working hard to “compile data on mortgage fraud through suspicious activity reports (SARs) filed by federally-insured financial institutions, reports received from the Department of Housing and Urban Development-Office of the Inspector General (HUD-OIG), and complaints received from the public and mortgage industry at large”. As a nation it is important that we continue to report mortgage fraud to the FBI so that it may immediately be investigated and to prevent our fellow citizens from being victimized. Reports do not necessarily guarantee a conviction or restitution for such heinous acts, but work effectively to deploying the amount of schemes that are continuing to formulate and further our economic state into ruins.
Works Cited
Administration. (2010, June 23). "Operation Stolen Dreams" Targeting Mortgage Fraudsters in California. Retrieved June 24, 2010, from Mortgage Fraud and News: http://mortgagefraudandnews.com/2010/06/23/%e2%80%9coperation-stolen-dreams%e2%80%9d-targeting-mortgage-fraudsters-in-california/
FBI. (2010, March). Retrieved June 24, 2010, from Mortgage Fraud Overview: http://www.fbi.gov/hq/mortgage_fraud.htm
FBI. (2008). Financial Crime Reports to the Public Fiscal Year 2008. Washington D.C.: US Government Department of Justice.
Reuters. (2010, June 17). US Reveals Mortgage Fraud Crackdown. Retrieved June 24, 2010, from New York Times: http://www.nytimes.com/2010/06/18/business/18fraud.html?scp=2&sq=mortgage%20fraud&st=cse
Ritter, K. (2010, June 25). 'Operation Stolen Dreams': DOJ Arrests Nearly 500 In Mortgage Fraud Crackdown. Retrieved June 25, 2010, from The Huffington Post: http://www.huffingtonpost.com/2010/06/17/operation-stolen-dreams-d_n_615798.html
Wednesday, June 16, 2010
The Theory Behind White Collar Crime
What is the difference between bank robbery and mortgage fraud? According to the New York Times piece, “Prosecutions Lag as N.Y. Foreclosure Frauds Surge,” bank robbers average less than 2K with a 75 percent risk of being caught and prosecuted while mortgage fraud personnel walk away with hundreds of thousands of dollars and run little risk of being caught. This illustrates the allure of white collar crime.
The term white collar crime was coined by sociologist, Edwin Sutherland in 1939 and explained as “crime committed by a person of respectability and high social status in the course of his occupation.” According to Sutherland, this kind of crime is the most dangerous type to face the modern world. Although it cannot always be proven, white collar crime appears to be a root of today's economic trouble. The reason why this cannot be tested is that the Federal Bureau of Investigations (FBI) only holds data that is reported to the Uniform Crime Reports (UCR). Many corporations are: not aware of, do not prosecute, or report offenses making it hard to have accurate documentation.
Today we have multiple definitions for this term, but they all fit into the FBI commonly prosecuted fraud. Although the theory behind this classification of crime has not changed the basic orientationsof white collar crime: “...white-collar crime by the type of offender (e.g., high socio-economic status and/or occupation of trust); those that define it in terms of the type of offense (e.g., economic crime); and...the organizational culture rather than the offender or offense”. Currently, the FBI prosecutes according to the type of offense. They have chosen to redefine Sutherland’s theory as, “…those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence”.
According to the FBI’s report on white collar crime they believe that “individuals and organizations commit these acts to obtain money, property or services; to avoid the payment or loss of money or services; or to secure personal or business advantage”. As a society, we are seeing more of this type of crime publicized. This is in part, due to the fact that we are seeing more and more educated people as victims of white collar crimes. These crimes go unnoticed until they reach a multitude of people and at that point they become a kind of robbery that has been redefined as white collar crime.
Works Cited
Barnett, C. (1999). The Measurement of White Collar Crime Using Uniform Crime Reporting (UCR) Data. Retrieved June 15, 2010, from Criminal Justice Information Services (CJIS) Division : http://www.fbi.gov/ucr/whitecollarforweb.pdf
LII/ Legal Information Institute. (n.d.). Retrieved June 15, 2010, from Cornell University Law School: http://topics.law.cornell.edu/wex/white-collar_crime
Powell, M. (2010, May 30). Blacks in Memphis Lose Decades of Economic Gains. Retrieved June 15, 2010, from The New York Times: http://www.nytimes.com/2010/05/31/business/economy/31memphis.html?pagewanted=1
Powell, M. (2009, April 14). Prosecutions Lag as N.Y. Foreclosure Frauds Surge . Retrieved June 14, 2010, from The New York Times: http://www.nytimes.com/2009/04/15/nyregion/15prosecutors.html?_r=2&fta=y
The term white collar crime was coined by sociologist, Edwin Sutherland in 1939 and explained as “crime committed by a person of respectability and high social status in the course of his occupation.” According to Sutherland, this kind of crime is the most dangerous type to face the modern world. Although it cannot always be proven, white collar crime appears to be a root of today's economic trouble. The reason why this cannot be tested is that the Federal Bureau of Investigations (FBI) only holds data that is reported to the Uniform Crime Reports (UCR). Many corporations are: not aware of, do not prosecute, or report offenses making it hard to have accurate documentation.
Today we have multiple definitions for this term, but they all fit into the FBI commonly prosecuted fraud. Although the theory behind this classification of crime has not changed the basic orientationsof white collar crime: “...white-collar crime by the type of offender (e.g., high socio-economic status and/or occupation of trust); those that define it in terms of the type of offense (e.g., economic crime); and...the organizational culture rather than the offender or offense”. Currently, the FBI prosecutes according to the type of offense. They have chosen to redefine Sutherland’s theory as, “…those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence”.
According to the FBI’s report on white collar crime they believe that “individuals and organizations commit these acts to obtain money, property or services; to avoid the payment or loss of money or services; or to secure personal or business advantage”. As a society, we are seeing more of this type of crime publicized. This is in part, due to the fact that we are seeing more and more educated people as victims of white collar crimes. These crimes go unnoticed until they reach a multitude of people and at that point they become a kind of robbery that has been redefined as white collar crime.
Works Cited
Barnett, C. (1999). The Measurement of White Collar Crime Using Uniform Crime Reporting (UCR) Data. Retrieved June 15, 2010, from Criminal Justice Information Services (CJIS) Division : http://www.fbi.gov/ucr/whitecollarforweb.pdf
LII/ Legal Information Institute. (n.d.). Retrieved June 15, 2010, from Cornell University Law School: http://topics.law.cornell.edu/wex/white-collar_crime
Powell, M. (2010, May 30). Blacks in Memphis Lose Decades of Economic Gains. Retrieved June 15, 2010, from The New York Times: http://www.nytimes.com/2010/05/31/business/economy/31memphis.html?pagewanted=1
Powell, M. (2009, April 14). Prosecutions Lag as N.Y. Foreclosure Frauds Surge . Retrieved June 14, 2010, from The New York Times: http://www.nytimes.com/2009/04/15/nyregion/15prosecutors.html?_r=2&fta=y
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