The Killer B’s for financial crimes: Biographics and Biometrics

360_biometric_card_0322Posted by Douglas Wood, Editor.

Several years ago, I was part of the executive management team at an identity resolution software company that specialized in search, fuzzy match, and link analysis of disparate data. The technology was excellent at querying structured biographic data to determine ‘who’s who’, and ‘who knows whom’ across systems, but was not in-and-of-itself an identity management solution. Biographical data is great, but even greater if and when combined with other types of identity data.

According to the Federal Trade Commission (FTC), approximately 12 million people are victims of identity theft each year. The implications for consumers are well-documented… hence the existence of all those identity protection services we see advertised on TV most nights. The impact of identity fraud on commercial business is significantly understated, yet wreaks havoc on banks, insurers, retailers, and just about any other mainstream business you can think of.

Criminal activities and economic challenges have always powered the requirement to protect people, information, and valuable assets. Within these requirements has long rested an opportunity to address these challenges by properly identifying end-users, managing their activities, and authorizing transactions.

Traditionally, businesses use passwords, tokens, and biographic data (names, addresses, SSN, etc) to resolve the identity of an individual interacting with a system. More recently, the use of biometrics (fingerprint, facial, and iris recognition) has substantially improved the identity resolution process. According to studies by Frost & Sullivan, biometrics solutions provide the best-known means of identity assurance.

The blending of biographic and biometric data (The Killer B’s) is a growing field that uses identity resolution of biographic data to further augment the powerful biometric component of identity assurance.

Biometric identity resolution and identity management have been functionally disconnected in the past. More and more, though, businesses are looking to deploy technologies and solutions that utilize biometric and biographic data for identity resolution within robust and flexible system architectures that connect and enable business processes for identity management purposes.

The following diagram from industry leader Aware, Inc. provides additional insight into the value proposition.

inquire-new-02

Aware’s Killer B systems help discover that Jessica Smith is in need of some investigation. With this type of technology, commercial businesses derive benefits that are traditionally associated with improved safety, security, and public well-being. The unique integration of identity resolution (with biometric data) and identity management (with biographic data and access administration) systems combine the benefits from each solution, while facilitating:

  1. Regulatory compliance
  2. Reduction in fraud costs
  3. Increases in productivity
  4. Improved security and accountability
  5. Overall business cost reductions

Also according to Frost & Sullivan’s “The Next Level of Identity Solutions”, the key challenges currently faced by end-users seeking identity solutions are driven by the need to uncover identity fraud and to better address security risks in order to reduce operational costs and improve service levels. Killer B systems are positioned to help solve these issues.

A Case Study in Workplace Safety Investigations

WorkPlaceSafetyThe Problem
A large, government-run workplace safety and worker’s compensation organization needed a solution to support in-house investigations using major case management (MCM) methodology. MCM is often used in major police investigations for cases involving deaths, abductions and other serious crimes. The need for an electronic case management software solution was fueled by the organization’s desire to make information management more efficient and effective, and to align to new MCM business models and practices. The goal was to ensure a consistent approach to all investigations, from initial case intake through completion to possible court disclosure, in both small and large complex cases.


Business Background

Within the Workplace Safety organization, there are two key departments responsible to promote the investigation services mandate:

1.  The Field Investigations Department investigates fraudulent activities that undermine the financial integrity of the organization and of the accident fund.

  • This department provides specialized investigation assistance for claims, prevention, assessments, mental health investigations, claims suppression and other functional areas.
  • Refers cases of fraud to Crown Counsel for criminal prosecution.
  • Supports development of fraud awareness and best practices for prevention.
  • Administers the Board’s surveillance program.
  • Conducts open source investigations using social media.

2.  The Fatal and Serious Injury Investigations Department investigates serious and fatal injury workplace accidents to:

  • Determine causation, underlying factors and identify contributing compliance issues.
  • Provide recommendations to industry to aid in the prevention of future injury.
  • Gather information to help monitor and analyze industry trends on workplace fatalities, serious injuries, and diseases.
  • Determine violations of the Workers’ Compensation Act and Occupational Health and Safety regulations and refer cases for prosecution or administrative penalties, when necessary.
  • Provide specialized investigative assistance to other areas of the organization.


Key Requirements for Investigative Case Management Software

The software needed to support MCM and meet the basic objectives of major case investigations such as documentation and preservation. With different evidentiary requirements for regulatory and prosecutorial cases, the system would have to provide functionality to transition these cases seamlessly. The solution would also enhance managerial accountability, proper delegation of responsibilities, efficient and effective use of resources, auditable and consistent standards, efficient disclosure and the use of current procedures in the seizure and preservation of evidence. The solution required scalability with functionality that supported both the Fatal and Serious Injury departments (FSI) and Field Investigations (FI) for investigations ranging in size and complexity. The software needed to:

  • Enable a ‘regulatory’ case to be transitioned into a prosecutorial case without having to create the latter from scratch.
  • Allow for organization, management and retrieval of information at any stage of the investigation.
  • Provide a repository for storage of information from various mediums.
  • Have sophisticated reporting capabilities that can analyze potentially large volumes of investigative data including multimedia files that could be collected during major investigations.
  • Support disclosure and reporting at any point in the investigation process including reports to prosecutors.
  • Include a security model that can manage at the role, functionality or document level.


The Solution

After a months-long search and thorough solution vetting process, the organization selected an investigation management solution that was offered as both a traditional enterprise deployment and as a hosted SaaS model. The client chose the latter model due to ease of implementation and faster ROI.

The software supported the customer’s investigation management process, from the capture of the initial incident report, through to the presentation of evidence in court. It provides a collaborative and secure environment in which to conduct a range of different investigation types.

With its streamlined interface, collaborative functionality and integrated intelligence capabilities, the software was highly suited to the organization’s complex investigation structure. Whether investigating incidents of crime or fraud, breaches of compliance, or performing open source research, it helped the client efficiently collect, process and organize investigative data.

The framework has been specifically designed with this in mind, ensuring each application deployment is configured to meet the customer’s exact needs: user roles, data entry forms, entity definitions and document workflows are all easily configurable. With a simple yet powerful workflow and built-in collaboration functionality, it was well suited to the wide variety of investigative scenarios undertaken by the client.

 

What is Major Case Management?

Posted by Douglas Wood, Editor.

Major Case Management (MCM) is an innovative approach to solving major case crimes and dealing with complex incidents. A major case is a real or suspected crime of such severity that it creates an intense public demand for identification, apprehension, and prosecution of the offender. Major cases also include those crimes which necessitate a substantial commitment of resources for a prolonged period of time or which require the application of complex investigative techniques.

Law Enforcement uses MCM methodologies and technology to investigate certain types of serious crimes – homicides, sexual assaults and abductions, for example. MCM combines specialized police training and investigation techniques with major case management computer software systems. The software manages the vast amounts of information involved in investigations of serious crimes.
It is especially useful in helping police identify common links in crimes committed in different locations – crimes that might have been committed by the same person.

All investigations need some kind of structure. The more serious and complex the investigation, the more rigorous that structure needs to be. The MCM model for conducting serious, complex investigations has been developed to provide a structure for major investigations. It was originally created by for use by law enforcement in homicide and sexual assault investigations. However, MCM is used by many other investigative agencies, including in anti-terrorism and air crash investigations. MCM techniques have also been used as part of non-criminal investigations, such as investigating an outbreak of Severe Acute Respiratory Syndrome (SARS).

Origins of Major Case Management

Many concepts of MCM have been in existence since the mid 1980’s when UK police introduced HOLMES (Home Office Large Major Enquiry System), and then subsequently HOLMES 2. Other large police services, including The Royal Canadian Mounted Police (RCMP), have also adopted methodologies that fit into the category.

In Ontario, Canada, however, MCM owes its existence to the case of Paul Bernardo.

Paul Kenneth Bernardo was suspected of more than a dozen brutal sexual assaults in Scarborough, Ontario, Canada. As his attacks grew in frequency they also grew in brutality, to the point of several murders. Then, just as police were closing in the attacks suddenly stopped.

That’s when Ontario law enforcement knew they had a problem. Because their suspect was not in jail, they knew he had either died, or fled to a location outside their jurisdiction to commit his crimes.

The events following Bernardo’s disappearance in Toronto and his eventual capture would ultimately lead to an intense 1995 enquiry into police practices throughout the Province of Ontario.  The enquiry, headed by the late Justice Archie Campbell, showed glaring weaknesses in investigation management and information sharing between police districts.

Campbell studied the court and police documents for four months and then produced a scathing report that documented systemic jurisdictional turf wars among the police services in Toronto and the surrounding regions investigating a string of nearly 20 brutal rapes in the Scarborough area of Toronto and the murders of two teenaged girls in the St. Catharines, Ontario area. He concluded that the investigation “was a mess from beginning to end.”

Campbell went on to conclude that there was an “astounding and dangerous lack of co-operation between police services” and a litany of errors, miscalculations and disputes. Among the Justice’s findings was a key recommendation that a major case management system was needed to:

  1. Record, organize, manage, analyze and follow up all investigative data
  2. Ensure all relevant information sources are applied to the investigation
  3. Recognize at an early stage any linked or associated incidents
  4. “Trigger” alerts to users of commonalities between incidents
  5. Embody an investigative methodology incorporating standardized procedures

MCM is born

As a result of the Campbell report, MCM was born as a methodology for conducting major investigations. Ontario’s MCM software maximizes investigative efficiency, minimizes the chance of important evidence being missed and has an external person or group evaluate how the investigation is going.

MCM Components

Ontario’s MCM methodology is based on the following components, commonly referred to as The Command Triangle.

Within the triangle, three executive functions are responsible for conducting the investigation. In a non-complex investigation, a single officer may perform these functions. As the complexity of the investigation increases, one or more law enforcement officials will perform these functions.

MCM-Tri

  1. Senior Investigating Officer: He or she is responsible for the broad strategic direction of the investigation.
  2. Primary Investigator: He or she runs the investigation at the tactical level, providing day-to-day coordination, guidance and control for everyone else involved in the fact-finding process.
  3. File Coordinator: He or she coordinates the vast amounts of documentation gathered and generated during a major investigation.

Major case management is a complex investigative activity because it involves the command of team members in a pressure-filled environment. Within the uncertain investigative environment, case managers must ensure that their responsibilities are carried out efficiently and effectively. For instance, they must ensure that all necessary investigative information is collected; the roles and responsibilities of the investigative team are clearly defined; the resources required for completing tasks are available; ethical investigative standards are upheld; and, that the investigative team can quickly adapt to changing situations.

Partnerships

Law Enforcement agencies may sometimes collaborate with other agencies to conduct investigations. That requires coordination and cooperation. MCM is helping in these situations. It is targeted at working collaboratively with outside agencies to progress the investigation. One important aspect of the MCM model is that linked investigations involving one or more jurisdictions or agencies must be under a unified command and control. That avoids duplication of effort and helps to coordinate information gathered in one case that might be vital to another linked investigation.

Major Case Management Software

At the technology core of MCM is the advanced, purpose-built software which processes the vast amounts of information arising in a major case. It is invaluable in organizing, retrieving and analyzing large volumes of investigative data. MCM software assists the Senior Investigating Officer to manage a major investigation including resource deployment, and assists police services in ensuring that major case investigations are focused, methodically controlled and audited throughout the investigative life cycle.

Swoop ‘n Squat, Army strong, and major case management: This week’s Crime Technology headlines:

Posted by Douglas Wood, Editor.Newspaper

Swoop and Squat…

http://www.propertycasualty360.com/2015/03/09/swoop-squat-beware-of-these-insurance-fraudsters

Army strong analytics…

http://www.military.com/daily-news/2015/03/27/army-improves-systems-testing-to-deliver-more-capability-to-figh.html

Investigative Case Management…

http://www.mvariety.com/cnmi/cnmi-news/local/75212-commonwealth-bureau-of-investigation-has-a-new-building

WorksafeBC introduces new Major Case Management (MCM) protocols…

http://www.workerscompensation.com/compnewsnetwork/workers-comp-blogwire/20898-worksafe-bc-posts-update-on-safety-review-plan.html

The Name Game Fraud

Hello-my-name-is1Posted by Douglas Wood, Editor. Alright everybody, let’s play a game. The name game! “Shirley, Shirley bo Birley. Bonana fanna fo Firley. Fee fy mo Mirley. Shirley!” No, not THAT name game. (Admit it… you used to love singing the “Chuck” version, though.) The name game I’m referring to is slightly more sinister, and relates to the criminal intent to deceive others for gain by slightly misrepresenting attributes in order to circumvent fraud detection techniques. Pretty much anywhere money, goods, or services are dispensed, folks play the name game. Utilities, Insurance, Medicaid, retail, FEMA. You name it. Several years ago, I helped a large online insurance provider determine the extent to which they were offering insurance policies to corporations and individuals with whom they specifically did not want to do business. Here’s what the insurer knew: They had standard application questions designed to both determine the insurance quote AND to ensure that they were not doing business with undesirables. These questions included things such as full name, address, telephone number, date of birth, etc… but also questions related to the insured property. “Do you live within a mile of a fire station?”, Does your home have smoke detectors?”, and “Is your house made of matchsticks?” On top of the questions, the insurer had a list of entities with whom the knew they did not want to do business for one reason or another. Perhaps Charlie Cheat had some previously questionable claims… he would have been on their list. In order to circumvent the fraud prevention techniques, of course, the unscrupulous types figured out how to mislead the insurer just enough so that the policy was approved. Once approved, the car would immediately be stolen. The house would immediately burn down, etc. The most common way by which the fraudsters misled the insurers was a combination of The Name Game and modifying answers until the screening system was fooled. Through a combination of investigative case management and link explorer / link analysis software, I went back and looked at several months of historical data and found some amazing techniques used by the criminals. Specifically, I found one customer who made 19 separate online applications – each time changing just one attribute or answer slightly – until the policy was issued. Within a week of the policy issue, a claim was made. You can use your imagination to determine if it was a legitimate claim. :D This customer, Charlie Cheat (obviously not his real name), first used his real name, address, telephone number, and date of birth… and answered all of the screening questions honestly. Because he did not meet the criteria AND appeared on an internal watch list for having suspicious previous claims, his application was automatically denied. Then he had his wife, Cheri Cheat, complete the application in hopes that the system would see a different name and approve the policy. Thirdly, he modified his name to Charlie Cheat, Chuck E. Cheat, and so on. Still no go. His address went from 123 Fifth Street to 123-A 5th Street. You get the picture. Then he began to modify answers to the screening questions. All of a sudden, he DID live within a mile of a fire station… and his house was NOT made of matchsticks… and was NOT located next door to a fireworks factory. After almost two dozen attempts, he was finally issued the policy under a slightly revised name, a tweak in his address, and some less-than-truthful answers on the screening page. By investing in powerful  investigative case management software with link analysis and fuzzy matching this insurer was able to dramatically decrease the number of policies issued to known fraudsters or otherwise ineligible entities. Every time a new policy is applied for, the system analyzes the data against previous responses and internal watch lists in real time.  In other words, Charlie and Cheri just found it a lot more difficult to rip this insurer off. These same situations occur in other arenas, costing us millions annually in increased taxes and prices. So, what happened to the Cheats after singing the name game?  Let’s just say that after receiving a letter from the insurer, Charlie and Cheri started singing a different tune altogether.

this week’s financial crimes headlines

Douglas Wood:

This week’s financial crimes headlines…

Originally posted on Byrnes' Tax & Wealth Management Blog:

Banca Privada d’Andorra Money Laundering Billions for Corruption and Human Traffickers?
FinCEN’s action also describes the activity of a second high–level manager at BPA in Andorra who accepted exorbitant commissions to process transactions related to Venezuelan third–party money launderers. This activity involved the development of shell companies and complex financial products to siphon off funds from Venezuela’s public oil company Petroleos de Venezuela (PDVSA). BPA processed approximately $2 billion in transactions related to this money laundering scheme.
Former Managing Director of RBS Securities Admits To Multimillion Dollar Securities Fraud of RBS Customers
Katke was a registered broker-dealer and managing director at RBS Securities Inc. As part of the scheme, Katke and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.Commerzbank Admits to Sanctions and Money Laundering Violations, Will Pay $1.45 Billion Penalties!

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LexisNexis® Acquires BAIR Analytics, Leading Provider of Crime Analytics Solutions for Public Safety

WASHINGTON, DC and ATLANTA (January 6, 2015) – LexisNexis® Risk Solutions today announced its intent to acquire BAIR Analytics, a provider of analytics solutions for public safety.  LexisNexis is acquiring BAIR Analytics to better provide the public safety community with comprehensive investigative solutions that aid them in their law enforcement mission.  BAIR Analytics deploys strong technology, robust analytics, mapping, and visual tools to identify and predict patterns of crime.  The transaction is subject to regulatory review.

“The acquisition of BAIR Analytics builds on LexisNexis’ commitment to public safety, providing us the ability to combine BAIR Analytic’s analytical capabilities with our public records and linking technology to add context to crime patterns and enhance our ability to identify and locate persons of interest,” said Haywood Talcove, chief executive officer, LexisNexis Special Services, Inc.  “The acquisition will be unique in the industry and help public safety officers make better decisions to close cases faster and improve community safety.  In an era of constrained budgets, analytics are essential to optimize limited resources and increase overall efficiencies.”

BAIR Analytic’s analytical tools have been used by large and small public safety organizations worldwide for more than 20 years to help reduce and prevent criminal activity.

“Becoming part of LexisNexis will bring new opportunities to expand and build the best possible solutions to help our public safety customers,” said Sean Bair, President, BAIR Analytics.   “BAIR Analytic’s ability to help agencies identify, analyze and resolve problems created by criminal offenders will be an exceptional complement to LexisNexis, its proven solutions and vast public records database to offer a more complete view of individuals to accelerate the investigation process.”

About LexisNexis Risk Solutions

LexisNexis Risk Solutions (http://www.lexisnexis.com/risk) is a leader in providing essential information that helps customers across all industries and government assess, predict and manage risk.  Combining cutting-edge technology, unique data and advanced analytics, LexisNexis Risk Solutions provides products and services that address evolving client needs in the risk sector while upholding the highest standards of security and privacy.  LexisNexis Risk Solutions is part of Reed Elsevier, a world leading provider of professional information solutions.

BAIR Analytics

Established in 1997, BAIR Analytics (http://www.bairanalytics.com) is an analytical software and services company providing innovative tools and subject-matter expertise for public safety, private security, and national security and defense entities. Nearly half of the largest public-safety agencies in the United States use BAIR Analytic’s products & services to fight crime.  BAIR Analytic’s current software tools are utilized by police departments, government agencies, and throughout the private sector worldwide to increase and promote smarter, community-oriented preventative policing.

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Media Contact

Stephen Loudermilk
LexisNexis Risk Solutions
678.694.2353
stephen.loudermilk@lexisnexis.com