THIS POST IS NOW CONTINUED FROM PART 32, BELOW--
THERE IS TOO MUCH OF INSURANCE FRAUD GOING ON.
AT SEA I WAS THE FIRST CAPTAIN TO REJECT THE “ SOMALIA PIRACY INSURANCE FRAUD “ IN WHICH ALL WERE IN CAHOOTS— THE OWNERS, THE TECH MANAGERS , THE MANNING AGENTS, THE TIME CHARTERERS, THE CREW UNIONS , THE ITF etc .
IF A SAILOR DIES IN SOMALIAN WATERS , HIS FAMILY GETS NOTHING OR A RIDICULOUS PITTANCE .
IT WAS A SHAMELESS AND ELABORATE FRAUD.
NOTICING THAT I AM A HARDCORE AND EXPERIENCED CAPTAIN, THE ITF TRIED TO SMOKE THE PEACE PIPE WITH ME, WITHOUT OTHERS KNOWING.
THE TOP BOSSES OF THE OTHER INTERESTS WERE TRYING TO GET A ONE ON ONE WITH ME , AGAIN , ON THE QUIET— HOPING THAT IF I BLOW THE LID OFF THE PANDORAs BOX— I WILL HAVE SOME CONSIDERATION FOR THEM.
IT WAS A QUESTION OF BEING DISGRACED AND SACKED FOR THEM.
ONE DAY I WILL PUT A POST ON THIS. I HAVE ALL MASALA READY WITH PROOFS ..
THE PEOPLE WITHOUT HONOR AND CHARACTER , WHO CHEATED POOR SAILORS WILL HAVE NOWHERE TO HIDE.
I WILL STRIP THEM NAKED WITH NAMES AND ADDRESSES –
YES— THEY CAN TAKE ME TO COURT FOR DEFAMATION,
I WILL RAPE THEM IN FRONT OF THE JUDGE AND PRESS – MAKE SURE THEY GO TO JAIL FOR FRAUD !
IN THE POST ABOVE YOU CAN SEE KHAT LEAVES
THIS WAS THE DECOCOTION GANDHI USED IN HIS ENEMAS
Networks of dishonest specialty contractors, labor brokers, facilitators, paid straw shell owners and check-cashing stores can avoid far more workers-comp premiums and taxes than the traditional premium scams. Shell schemes spread to states with large construction activity.
Shell schemes generally have these illicit goals:---
• Remove and hide payroll to avoid workers compensation premiums, state and federal payroll taxes, and overtime pay;
• Covertly allow cheap cash-paid labor onto work sites;
• Create a fraudulent layer of insurance coverage between the employer and injured workers; and
• Allow construction contractors and sub-contractors to under-bid honest competitors.
Construction projects are managed by owners or general contractors. Gone are the days when general contractors’ own employees built housing subdivisions, office complexes and other buildings. Specialty subcontractors now are typically hired to do work such as excavation, plumbing, electrical work, concrete work, framing and drywall.
Shell owners usually create false identities for themselves using bogus yet official-looking government identification ...Specialty subcontractors, also looking to reduce their payroll burden, hire labor brokers. They oversee a large a large, transient and uninsured work force. The brokers supply the labor for the construction work to be performed.
The brokers are not “companies” per say. Rather, they act more like company foremen or field supervisors. They also may be someone simply with phone numbers of dozens to hundreds of workers to place on a job site while supervised by the specialty subcontractor. Labor brokers are key cogs in sophisticated shell scams.
Then there are “facilitators.” They know construction and statutory requirements for insurance coverage, and recruit someone as straw owner of the shell company where workers will be hidden. Shell owners usually create false identities for themselves using bogus yet official-looking government identification
False identities allow the shell-company owners and facilitators to simply walk away from or “burn” a shell company if an employee is injured, or if regulators or law enforcement start investigating. Investigators have nobody to contact about the activities, and subsequent worker injuries, involving the shell company.
Even if the facilitators are identified, they can easily deflect attention to the straw shell owner as the supposed culprit, except the “owner” now is untraceable. In fact, the shell’s address usually is just a post-office box or rental apartment.
Working together, the facilitator and shell company owner create a corporation, generically named something like XYZ General Services, Inc. A vague name lets the shell work in multiple construction trades, thus increasing usability and profits. Many states also let persons easily create corporations online, without meeting or verifying identification in person.
The shell owner has an insurance agent provide a minimal workers-compensation policy for the new shell company. The facilitator usually accompanies the “owner” to the agent meeting, and is identified as a “friend helping set up the business.”
The shell owner usually is described as being new to construction . The facilitator thus requests and receives approval to call the agent and request insurance certificates for labor brokers.
Some insurance agents are involved in the scheme, while others are duped by the facilitator. Either way, a shell owner buys a minimal workers-comp policy, falsely describing the business as a small, two to four-person company doing work such as drywall installation, concrete, brick paving or carpentry.
The insurer sets the premium without realizing the deception. A small premium downpayment lets the facilitator embed the shell company into the scheme.
The labor brokers are complicit in the scheme. They need to prove their labor force is covered by workers-compensation in order to perform the work with the specialty contractors as if they are legitimate subcontractors.
Facilitators thus provide (rent) the name and paperwork of the new shell company for the labor broker to use. This protects them if state regulators inquire or the insurer audits the specialty contractor. Specialty contractors usually are aware of the scheme. Yet they are insulated from civil or criminal liability most of the time, unless they begin performing shell company functions such as payroll.
The small workers-compensation policy gives the labor broker the “golden ticket” for a work crew to do construction work, what appears to be a valid certificate of insurance. However, they use many more workers than were reported at the time of application. The straw shell owner likely will disappear, or maybe be hired to “own” other shells.
The shell owners collect large amounts of money per week merely for allowing their name to be used as owner. The shell now is ready to funnel large amounts of undeclared payroll to cash-paid workers.
Shell names rented out-----The facilitators effectively rent out their shell company’s name. More important, the facilitators rent their valuable certificate of insurance to uninsured labor crews who work as if they are affiliated with the shell. In fact, they are independent and uninsured, though may believe in good faith they are covered.
General and specialty subcontractors can be directly involved. When contractors request an insurance certificate from uninsured labor brokers looking for work for their crew, they are directed to the facilitator.
The facilitator contacts the agent, and has the insurance certificate in the name of the shell company falsely presented as the uninsured labor broker’s company. The number of employees covered under a workers-compensation policy are almost never listed on the insurance certificate, so the massive deception is not evident at this point.
State-required proof of insurance is met, minimally. The contractor contracts with the shell owner so the uninsured labor crew can go to the work site. The labor broker bills the contractor, who pays for the work from their operating account. That usually is by one check each week, payable in the name of the shell company.
The checks are taken to a local check-cashing store. A pre-arranged deal was made with the proprietor, who is complicit. All checks made payable to the shell company are cashed, no matter who presents them.
The check-cashing store and facilitator split a 10 percent fee for each check. The balance goes to the uninsured construction crew for wages. The 10 percent cut is much cheaper than buying workers-comp coverage and paying taxes.
Because the facilitator rents the policy to numerous labor brokers who may work on many projects, the large number of insurance certificates issued by the insurance agent are lopsided compared to the small declared payroll and staff size.
Insurers and agents normally do not track insurance certificates. Thus they often discover schemes only when employees have a serious injury and a workers-compensation claim is made by an employee who was never reported to the insurer. Insurer audits occasionally uncover shell cons as well.
The facilitator instructs the shell owner to write a check from the shell company account, to be cashed at the check-cashing store. In some cases, the owners simply withdraw the cash and deliver it to the facilitator, who hands over the check casher’s cut. Electronic transfers are a relatively new payment nuance.
The shell’s bank account was created under the same false identification used to set up the shell. Currency transactions at the check-cashing store are falsified for checks of at least $10,000. The transactions also are documented to appear the shell owner made the transactions, even though the person cashing the checks represents dozens of uninsured labor brokers using the shell-company name and insurance certificate to obtain work.
In USA construction firms illegally hide workers in shell companies to avoid paying state-required workers-compensation coverage
Historically, dishonest contractors lowballed large amounts of their payroll, undetected. The goal was to under-report employees and salaries, and lie that employees worked safer jobs than they really did.
Fewer employees, lower payroll and safe jobs reduced workers-compensation premiums. Dishonest construction firms each can illegally shave hundreds of thousands of dollars in premiums a year. They also can save up to 35 % on contractor labor costs.
The shell-company schemes allow this deception and illicit savings on a much larger scale. Exact fraud losses are in short supply, yet shell-related schemes likely steal billions of workers-compensation insurance dollars a year, skew honest market competition and contribute to higher workers-compensation premiums.
Shell schemes often were discovered only when employees started making claims for often-tragic work injuries such as falls from scaffolding. Hidden in shell companies, insurers had no idea of the number of employees creating potential injury exposures.
The result: Workers-compensation insurers USA collectively were liable for millions of dollars in benefits, payable to injured employees they knew nothing about until receiving claims for work injuries.
The “chief motive in all insurance crimes is financial profit
Insurance contracts provide both the insured and the insurer with opportunities for exploitation.
According to the Coalition Against Insurance Fraud, the causes vary, but are usually centered on greed, and on holes in the protections against fraud.
The Coalition Against Insurance Fraud is a coalition of insurance organizations, consumers, government agencies and legislative bodies working to enact anti-fraud legislation, educate the public, and provide anti-fraud advice.
They are also a resource where consumers can find scam warnings, learn where to report fraud, and how to protect themselves.
Dishonest employers fleece workers’ compensation insurers out of billions of dollars a year by hiding employees in the shadowy netherworld of America’s underground economy. Employers sequester workers in often complex networks of shell companies.
This reduces their payroll and staff size, and hence workers’ compensation premiums. These workers are falsely called, or misclassified as off-the-books “independent contractors.”
Up to 35 percent of employers misclassify employees.. Declared payroll should be made available to regulators. The insurance industry condones cheating when it ignores people who blatantly cheat the system.
Defrauders undermine honest employers who lose bids for jobs because they cannot compete with cheaters who lowball contracts by illegally lowering their workers’ compensation and tax costs.
Honest business owners thus have a simple choice: Make sure the laws are enforced and the playing field is fair, or join the cheaters.
By hiding workers, contractors can run large construction firms but still avoid paying the full workers’ compensation premiums. This deception leaves employees at risk of being injured but without coverage. Honest businesses also lose out
Often, those who commit insurance fraud view it as a low-risk, lucrative enterprise. For example, drug dealers who have entered insurance fraud think it’s safer and more profitable than working street corners.
Compared to those for other crimes, court sentences for insurance fraud can be lenient, reducing the risk of extended punishment. Though insurers try to fight fraud, some will pay suspicious claims anyway; settling such claims is often cheaper than legal action.
Shell corporations exist in most large corporations.
The American Institute of Certified Public Accountants defines fraud as the intentional false representation of material fact or its concealment with the aim of making another party act on this information at his or her own peril. Fraud auditing is the responsibility of professionals known as auditors.
You can seek the services of these individuals through having them as part of the staff internally at your organization or have external auditors that work on a contractual basis. At other times, the work done by internal auditors needs to be evaluated by an independent auditor in order to verify the work done internally.
It is not every time that auditing is done to determine the existence of fraud in the records of an individual or organization. At times it is done as a common practice to ensure that your financial records are being kept in the right manner and internal controls are working.
Auditors have the professional responsibility to detect fraud in their line of work. Fraud detection helps them sharpen their skills as well as teaching them new techniques that are used in helping individuals and businesses detect financial malpractice in their ventures.
When you notice irregularities that draw your attention, you must consider the services of an auditor to determine if there is anything that requires your immediate action. Fraud auditing is able to confirm or dispel your worries through evaluation of the systems to determine irregularities.
Fraud arises in organizations generally because there are opportunities to do so or the people committing the fraud are under pressure and have a rationalization for their activities. In order to reduce the chances of fraud in your organization you need to determine the weakness in the internal controls.
Fraud auditing is a process that should be integrated into the culture of an organization so that transparency and integrity can take root. When auditing is done on a consistent basis, even those that are tempted to commit the offenses are deterred.
Shell companies aren't just for big tax evaders anymore. They're the financial and deception vehicle of choice for some of the most corrupt, dangerous and ruthless individuals and entities in the world. Arms dealers, drug cartels, corrupt politicians, scammers, terrorists and cybercriminals are just a few of the frequent users of shells.
In April of 2014, Hewlett-Packard agreed to pay more than $100 million in criminal and regulatory penalties to the U.S. Department of Justice and Securities and Exchange Commission.
Hewlett-Packard subsidiaries created a slush fund for bribe payments, set up an intricate web of shell companies and bank accounts to launder money, employed two sets of books to track bribe recipients, and used anonymous e-mail accounts and prepaid mobile telephones to arrange covert meetings to hand over bags of cash.
One shell company isn't enough — fraudsters need a network. Dozens of shells, nominee directors, addresses and fake shareholders might be required to conceal a scheme or criminal plot.
Big-time criminal conspirators will utilize shell incorporators to do the heavy lifting and help create a corporate web of disguise that can perplex and confuse the best of investigators. Shells can come in different shapes and sizes, and the jurisdiction in which they reside can help further the concealment.
In June 2012, Global Witness, an international anti-corruption organization, published a report, "Grave Secrecy," which documented the shell companies and international criminal networks in and around Russia and Kyrgyzstan that were involved in money laundering, corruption and fraud.
In one case, the identity of a dead man from Russia was used as the front for a UK company. While this person had died three years before the company was set up, he was listed as the company's owner and he even ‘attended' a company meeting in London," stated the report.
Global Witnesses' investigation identified more than 20 companies that at first glance didn't appear connected to one another. But a detailed review of the directors, connections, and business addresses yielded a very large interconnected network that spanned several countries.
By visiting the site, it can be determined what physical structure is located at the known address and whether the address is consistent with the entity structure. Private detectives often will perform the procedure for a nominal charge, so the use of one may be useful for verifying entities that are not located in your geographic area.
The shell’s bank account was created under the same false identification used to set up the shell.
Six suspects in USA were arrested for creating multiple shell companies to hide workers and payroll. Ringleaders provided fake business cards to work crews. They were told to present the cards to state investigators who showed up onsite to inspect for proper workers-compensation coverage.
Millions of dollars in wages can be quickly funneled through a shell company. No year-end workers-compensation premium audit will be conducted because the shell company owner will be un-traceable. Nor does the shell pay any payroll taxes. The facilitator also routinely burns the shell and forms a new one once or twice a year to throw off investigators. The shell may be burned sooner if an employee has a catastrophic injury.
Workers-compensation insurers collectively lose billions of dollars in premiums annually. Insurer searches of the Insurance Services Office claims database now are locating duplicate injury claims for the same date of loss.
The related impact: Injured workers involved in shell schemes are suing insurers under commercial general liability policies that aren’t intended for what should be workers-compensation claims — hence, duplicate claims . The losses incurred by these schemes are tangentially imposing a cost burden on general liability insurers.
Because such large amounts of cash are involved, premium scams attract organized crime syndicates that use the same shells to launder other criminal proceeds.
Corrupt contractors with lower labor costs also can illicitly take over entire markets by lowballing competitors for contracts. Honest contractors may go out of business, lay off employees, or start cheating just to survive.7
That indignity is magnified when workers-compensation insurers pass fraud losses onto business clients in higher premiums. The upshot is a steady erosion of law-abiding contractors who pay true premiums.
Sue for workers-comp benefits--
Significant tax revenue also is denied to municipalities, states, the federal government, Social Security, Medicare and unemployment insurers.
Injured workers also get inadequate medical care. They must sue for workers-compensation benefits, and are trapped in litigation to get bills paid by workers-comp or general-liability policies. The unpaid bills and shattered lives are passed along to everyone in higher medical costs, and increased burdens on safety nets such as Social Security disability.
State laws must keep pace with shell conspirators so crooked facilitators and contractors are held accountable; and Insurers and agents must look tighten their application, underwriting and auditing to spot the signals of shell cons.
Corrupt construction companies know the limitations and practices of law enforcement and the insurance industrySwindlers exploit those weaknesses for large profits and hundreds of millions in premium-fraud losses to insurers.”.
Insurance fraud is any act committed with the intent to obtain a fraudulent outcome from an insurance process. This may occur when a claimant attempts to obtain some benefit or advantage to which they are not otherwise entitled, or when an insurer knowingly denies some benefit that is due.
According to the United States Federal Bureau of Investigation the most common schemes include: Premium Diversion, Fee Churning, Asset Diversion, and Workers Compensation Fraud. The perpetrators in these schemes can be both insurance company employees and claimants. False insurance claims are insurance claims filed with the intent to defraud an insurance provider.
Another reason for fraud is over-insurance, when the amount insured is greater than the actual value of the property insured. This condition can be very difficult to avoid, especially since an insurance provider might sometimes encourage it in order to obtain greater profits.
This allows fraudsters to make profits by destroying their property because the payment they receive from their insurers is of greater value than the property they destroy. The most common form of insurance fraud is inflating the value of the loss.
Insurance companies are also susceptible to fraud because it's possible for fraudsters to file claims for damages that never occurred.
5% of the health care industry’s expenditures in the United States are due to fraudulent activities, amounting to a cost of about 65 billion USD
More than 15% of the total healthcare spending in the United States to fraud—about $ 140 billion annually.
All types of fraud committed in the United States insurance institutions (property-and-casualty, business liability, healthcare, social security, etc. )put the true cost at more than 42% of the total cash flow through the system.
Insurance fraud can be classified as either hard fraud or soft fraud
Hard fraud occurs when someone deliberately plans or invents a loss, such as a collision, auto theft, or fire that is covered by their insurance policy in order to receive payment for damages. Criminal rings are sometimes involved in hard fraud schemes that can steal millions of dollars
Soft fraud, which is far more common than hard fraud, is sometimes also referred to as opportunistic fraud. This type of fraud consists of policyholders exaggerating otherwise-legitimate claims. For example, when involved in an automotive collision an insured person might claim more damage than actually occurred.
Soft fraud can also occur when, while obtaining a new health insurance policy, an individual misreports previous or existing conditions in order to obtain a lower premium on his or her insurance policy.
Life insurance fraud may involve faking death to claim life insurance. Fraudsters may sometimes turn up a few years after disappearing, claiming a loss of memory.
An example is former British Government minister John Stonehouse who went missing in 1974 from a beach in Miami. He was discovered living under an assumed name in Australia, extradited to Britain and jailed for seven years for fraud, theft and forgery.
Health insurance fraud is described as an intentional act of deceiving, concealing, or misrepresenting information that results in health care benefits being paid to an individual or group.
Fraud can be committed either by an insured person or by a provider. Member fraud consists of claims on behalf of ineligible members and/or dependents, alterations on enrollment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work-related injury.
Provider fraud consists of claims submitted by bogus physicians, billing for services not rendered, billing for higher level of services, diagnosis or treatments that are outside the scope of practice, alterations on claims submissions, and providing services while medical licenses are either suspended or revoked. Independent medical examinations debunk false insurance claims and allow the insurance company or claimant to seek a non-partial medical view for injury-related cases.
Health insurance fraud depletes taxpayer-funded programs like Medicare, and may victimize patients in the hands of certain doctors. Some scams involve double-billing by doctors who charge insurers for treatments that never occurred, and surgeons who perform unnecessary surgery.
One of the main reasons that medical fraud is such a prevalent practice is that nearly all of the parties involved find it favorable in some way. Many physicians see it as necessary to provide quality care for their patients. Many patients, although disapproving of the idea of fraud, are sometimes more willing to accept it when it affects their own medical care. Program administrators are often lenient on the issue of insurance fraud, as they want to maximize the services of their providers.
The most common perpetrators of healthcare insurance fraud are health care providers.There are fraudulent practices such as billing insurers for treatments that are not covered by the patient’s insurance policy. To do this, physicians often bill for a different service, which is covered by the policy, rather than that which they rendered.
Public healthcare programs such as Medicare and Medicaid are especially conducive to fraudulent activities, as they are often run on a fee-for-service structure . Physicians use several fraudulent techniques to achieve this end.
These can include “up-coding” or “upgrading,” which involve billing for more expensive treatments than those actually provided; providing, and subsequently billing for, treatments that are not medically necessary; scheduling extra visits for patients; referring patients to other physicians when no further treatment is actually necessary; "phantom billing," or billing for services not rendered; and “ganging,” or billing for services to family members or other individuals who are accompanying the patient but who did not personally receive any services.
Perhaps the greatest total dollar amount of fraud is committed by the health insurance companies themselves.
There are numerous studies and articles detailing examples of insurance companies intentionally not paying claims and deleting them from their systems, denying and cancelling coverage, and the blatant underpayment to hospitals and physicians beneath what are normal fees for care they provide.
Although difficult to obtain the information, this fraud by insurance companies can be estimated by comparing revenues from premium payments and expenditures on health claims.
In response to the increased amount of health care fraud in the United States, Congress, through the Health Insurance Portability and Accountability Act (HIPAA), has specifically established health care fraud as a federal criminal offense with punishment of up to ten years of prison in addition to significant financial penalties.
Fraud rings or groups may fake traffic deaths or stage collisions to make false insurance or exaggerated claims and collect insurance money. The ring may involve insurance claims adjusters and other people who create phony police reports to process claims.
One tactic fraudsters use is to drive to a busy junction or roundabout and brake sharply causing a motorist to drive into the back of them. They claim the other motorist was at fault because they were driving too fast or too close behind them, and make a false and inflated claim to the motorist's insurer for whiplash and damage which can give the fraudsters huge money
In staged collision fraud, fraudsters use a motor vehicle to stage an accident with the innocent party. Typically, the fraudsters' vehicle carries four or five passengers. Its driver makes an unexpected manoeuvre, forcing an innocent party to collide with the fraudster's vehicle.
Each of the fraudsters then files claims for injuries sustained in the vehicle. A “recruited” doctor diagnoses whiplash or other soft-tissue injuries which are hard to dispute later.
Two-way insurance coverage is very expensive and almost completely unavailable for OLD vehicles --the drivers can only obtain basic liability.
A real accident may occur, but the dishonest owner may take the opportunity to incorporate a whole range of previous minor damage to the vehicle into the garage bill associated with the real accident. Personal injuries may also be exaggerated, particularly whiplash spine injuries
Insurance fraud cases of exaggerated claims can also include claiming damage to the car that never occurred as a result of an accident that damaged a different part of the vehicle.
Examples of soft auto-insurance fraud can include filing more than one claim for a single injury, filing claims for injuries not related to an automobile accident, misreporting wage losses due to injuries, or reporting higher costs for car repairs than those that were actually paid.
Hard auto-insurance fraud can include activities such as staging automobile collisions, filing claims when the claimant was not actually involved in the accident, submitting claims for medical treatments that were not received, or inventing injuries. Hard fraud can also occur when claimants falsely report their vehicle as stolen. Soft fraud accounts for the majority of fraudulent auto-insurance claims.
Another example is that a person may illegally register their car to a location that would net them cheaper insurance rates than where they actually live, sometimes called "rate evasion". Another form of automobile insurance fraud, known as "fronting," involves registering someone other than the real primary driver of a car as the primary driver of the car. For example, parents might list themselves as the primary driver of their children's vehicles to avoid young driver premiums.
"Crash for cash" scams may involve random unaware strangers, set to appear as the perpetrators of the orchestrated crashes. Such techniques are the classic rear-end shunt (the driver in front suddenly slams on the brakes, possibly with brake lights disabled), the decoy rear-end shunt (when following one car, another one pulls in front of it, causing it to brake sharply, then the first car drives off) or the helpful wave shunt (the driver is waved into a line of queuing traffic by the scammer who promptly crashes, then denies waving).
, there is an increasing incidence of false whiplash claims to car insurance companies from motorists involved in minor car accidents . Because the mechanism of injury is not fully understood, A&E doctors have to rely on a patient's external symptoms (which are easy to fake). Resultingly, "no win no fee" personal injury solicitors exploit this "loophole" for easy compensation money Property insurance
Possible motivations for this can include obtaining payment that is worth more than the value of the property destroyed, or to destroy and subsequently receive payment for goods that could not otherwise be sold., the majority of property insurance crimes involve arson. One reason for this is that any evidence that a fire was started by arson is often destroyed by the fire itself. Council compensation claims
The fraud involving claims from the councils' insurers suppose staging damages blamable on the local authorities (mostly falls and trips on council owned land) or inflating the value of existing damages.
Detecting insurance fraud--
The detection of insurance fraud generally occurs in two steps. The first step is to identify suspicious claims that have a higher possibility of being fraudulent. This can be done by computerized statistical analysis or by referrals from claims adjusters or insurance agents.
Additionally, the public can provide tips to insurance companies, law enforcement and other organizations regarding suspected, observed, or admitted insurance fraud perpetrated by other individuals. Regardless of the source, the next step is to refer these claims to investigators for further analysis.
Due to the sheer number of claims submitted each day, it would be far too expensive for insurance companies to have employees check each claim for symptoms of fraud. Instead, many companies use computers and statistical analysis to identify suspicious claims for further investigation.
There are two main types of statistical analysis tools used: supervised and unsupervised. In both cases, suspicious claims are identified by comparing data about the claim to expected values. The main difference between the two methods is how the expected values are derived.
In a supervised method, expected values are obtained by analyzing records of both fraudulent and non-fraudulent claims
Unsupervised methods of statistical detection, involve detecting claims that are abnormal. Both claims adjusters and computers can also be trained to identify “red flags,” or symptoms that in the past have often been associated with fraudulent claims. Statistical detection does not prove that claims are fraudulent; it merely identifies suspicious claims that need to be investigated further.
Investigators say it worked like this: Zuniga paid a North Lauderdale man to create and insure a fake or "shell" company, Behar Services Incorporated, that "rented" out insurance certificates — required by the state for construction workers — to uninsured subcontractors.
The subcontractors were then hired for construction jobs across South Florida. When the jobs were finished, payments to the uninsured subcontractors were made through checks to the fake company, which were then cashed at check cashing stores.
Mortgage Fraud is defined as a material misstatement, misrepresentation, or omission of information relied upon by an underwriter or lender to fund, purchase, or insure a loan.
Mortgage fraud can be classified into two general categories: fraud for housing and fraud for profit.
Market participants are perpetrating mortgage fraud by modifying old schemes, such as property flip, builder-bailout, and short sale fraud, as well as employing newer schemes, such as buy and bail, reverse mortgage fraud, loan modification and refinance fraud, and mortgage servicing fraud.
A fraudulent property flip is a scheme in which individuals, businesses, and/or straw borrowers, buy and sell properties among themselves to artificially inflate the value of the property.
Reverse Mortgage Fraud involves a scheme using a reverse mortgage loan to defraud a financial
institution by stripping legitimate or fictitious equity from the collateral property..
Securities fraud, also known as stock fraud and investment fraud, is a deceptive practice in the stock or commodities markets that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of securities laws. Offers of risky investment opportunities to unsophisticated investors who are unable to evaluate risk adequately and cannot afford loss of capital is a central problem.
Securities fraud can also include outright theft from investors (embezzlement by stockbrokers), stock manipulation, misstatements on a public company's financial reports, and lying to corporate auditors. The term encompasses a wide range of other actions, including insider trading, front running and other illegal acts on the trading floor of a stock or commodity exchange.
Dummy corporations may be created by fraudsters to create the illusion of being an existing corporation with a similar name. Fraudsters then sell securities in the dummy corporation by misleading the investor into thinking that they are buying shares in the real corporation.
According to enforcement officials of the Securities and Exchange Commission, criminals engage in pump-and-dump schemes, in which false and/or fraudulent information is disseminated in chat rooms, forums, internet boards and via email (spamming), with the purpose of causing a dramatic price increase in thinly traded stocks or stocks of shell companies (the "pump").
When the price reaches a certain level, criminals immediately sell off their holdings of those stocks (the "dump"), realizing substantial profits before the stock price falls back to its usual low level. Any buyers of the stock who are unaware of the fraud become victims once the price falls.
Phishing is the attempt to obtain sensitive information such as usernames, passwords, and credit card details (and, indirectly, money), often for malicious reasons, by disguising as a trustworthy entity in an electronic communication.
In illegal insider trading, an insider or a related party trades based on material non-public information obtained during the performance of the insider's duties at the corporation, or otherwise misappropriated .
Abusive short selling, including certain types of naked short selling, are also considered securities fraud because they can drive down stock prices. In abusive naked short selling, stock is sold without being borrowed and without any intent to borrow. The practice of spreading false information about stocks, to drive down their prices, is called "short and distort."
The trading volume in the securities and commodities markets, having grown dramatically and has led to an increase in fraud and misconduct by investors, executives, shareholders, and other market participants.
White collar criminals are expanding the scope of their fraud and are looking for new markets, new investors, and banking secrecy havens to hide unjust enrichment.
Same financial markets provide the opportunity for wealth to be obtained and the opportunity for white collar criminals to take advantage of unwary investors.
Recovery of assets from the proceeds of securities fraud is a resource intensive and expensive undertaking because of the cleverness of fraudsters in concealment of assets and money laundering, as well as the tendency of many criminals to be profligate spenders. A victim of securities fraud is usually fortunate to recover any money from the defrauder.
Sometimes the losses caused by securities fraud are difficult to quantify. For example, insider trading is believed to raise the cost of capital for securities issuers, thus decreasing overall economic growth.
Potential perpetrators of securities fraud within a publicly traded firm include any dishonest official within the company who has access to the payroll or financial reports that can be manipulated to:---
Enron Corporation exemplifies all four tendencies, and its failure demonstrates the extreme dangers of a culture of corruption within a publicly traded corporation.
Even if the effect of securities fraud is not enough to cause bankruptcy, a lesser level can wipe out holders of common stock because of the leverage of value of shares upon the difference between assets and liabilities.
DELHI CM ARVIND KEJRIWALs GOVT MUST BE DISMISSED
HE HAS BROKEN HIS OATH AS CMTHIS DANGEROUS MAN KEJRIWAL HAS USED A "FEEDBACK UNIT "-- A CLANDESTINE UNIT .
IS THIS FOR BLACKMAIL ?
PUT THIS COMMENT IN PM MODIs , LAW MINISTERS AND RAJNATH SINGHs WEBSITES
ASK FOR AN ACK
capt ajit vadaayil
PM MODI -WHAT TYPE OF PM ARE YOU?
HEY NIRA RADIA---
BABY, WHY DID YOU CHANGE YOU NAME TO N II R A -- WITH AN EXTRA " I"
BATAOO NAH ?
IT WONT HELP YOU --AS MODERN FINANCIAL FRAUD COMPUTERS CAN WEED THIS CHICANERY OUT
WE KNOW SEVERAL NAME CHANGERS --SHOBHA TO SHOBHAA TYPES
CAPT AJIT VADAKAYIL