Fraud & Medical Marijuana

Requests for medical marijuana have skyrocketed.  Some reports estimate an increase anywhere between 50% and 300% since President Obama took office and indicated that he wouldn’t override state laws with federal ones as the Bush administration did.

In November, the American Medical Association changed it’s tune with regard to the potential medical benefits of marijuana.  The AMA “urges that marijuana’s status as a federal Schedule I controlled substance be reviewed with the goal of facilitating the conduct of clinical research and development of cannabinoid-based medicines.”  The statement indicates that the AMA is not endorsing legalization of marijuana but that further research is warranted.

The announcement comes exactly one year after the Michigan Medical Marihuana Act was voted into effect.  According to the Michigan Medical Marihuana Program (MMMP) website, more than 12,000 people have registered for the program since it’s inception – an average of 71 applications per day!

Perhaps marijuana does have medicinal benefits.  But can such programs contribute to an increase in fraud?  You bet.  Unscrupulous workers seeking a little relaxation may be inclined to fake a workplace injury, begin receiving workers compensation benefits and get a doctor to prescribe some cannabis for their “ailment”.   What’s better than a paid vacation from work – especially when that vacation comes with a free pass to get high?  Insurance fraud with a bonus.

‘Tis the Season for Burning Down Your House

Earlier this year, a Connecticut court upheld an arson conviction for Randal Licari.  The fire, which destroyed Licari’s home and resulted in a large insurance payment, occurred during the holiday season and appeared to involve a Christmas tree.  Initially, fire investigators could not determine the cause of the fire but stated it seemed ‘‘to be accidental in nature and more probably than not caused by the Christmas tree.’’  It turns out that Licari’s Christmas tree was freshly purchased and well hydrated and therefore could not have accidentally caught fire.  Further investigation revealed that he had placed Duraflame logs under the Christmas tree and lit them.  Licari did not have a fireplace in his home.

This case is a reminder that although Christmas trees can start fires (the National Fire Protection Association estimates about 210 Christmas tree fires per year), the moisture content of a Christmas tree plays a significant role in how hazardous it can be.  A DRY tree burns very quickly and will become fully engulfed in flames within 30 seconds.   However, a properly hydrated tree will not burn.  The National Institute of Standards and Technology (NIST) conducted several tests and attempted to light a well hydrated tree with a match, electric current attached to an entire matchbook, and an open flame applied with a blow torch (see the test results here with video).  The needles burned a bit while the open flame was applied but they self-extinguished quickly.  So, this holiday season, if you choose to have a real Christmas tree in your home, remember to keep it well hydrated!  And don’t light Duraflame logs directly underneath it.

Do you KnowEm?

Billing itself as a brand protection program, KnowEm allows users to check the availability status of a username across various social networks.  KnowEm currently searches over 340 different social network sites in 15 different categories including blog platforms, photo sharing networks, bookmarking services,  and travel sites to name a few.  For a fee, KnowEm will enroll you with your chosen username at these 300+ sites so you can “Grab your name before someone else does.”  This article from the Washington post provides some insight as to why companies (or even individuals) might want to use this service.

However, KnowEm has one great feature that investigators can take advantage of for free.  Anyone can search for a username and check the availability status of that username across all the sites monitored by KnowEm – completely free and without the need to setup an account.  If you have a known username for the subject of your investigation, in less than 30 seconds you can see if that username is in use at any of those 300+ sites.  A great tool to quickly narrow your research.  Go here to try it out.

More Medicare Fraud

Following up on my last post, I wanted to share this recent CBS 60 Minutes article and video on Medicare fraud in south Florida.  It’s a tremendous example of how easy it is to steal money from the government.  Private insurance companies with a profit motive have more incentive to stop this type of fraud.  Unfortunately, the government has not had the motivation to seriously address this problem.  Dennis Jay at the Coalition Against Insurance Fraud has a great post on this topic here and a follow up post on how Democrats are getting more aggressive on fraud.

One of the commenters to Dennis’ follow up post makes a great point about private carriers who write Auto, Liability, or Workers’ Compensation insurance.  These insurers (full disclosure:  I work for one of them) pay medical claims every day and are subject to the same scams.  But they don’t have access to the same resources and, while there have been improvements in information sharing among these carriers, information sharing is lacking between them, the private healthcare payers, and government medical programs.  Groups like the National Insurance Crime Bureau (NICB) are targeting this issue and I forsee this being an area of focus in the coming months for insurance investigators.

Organized Crime Attacks Medicare

Organized crime rings who normally deal in drugs, prostitution, and extortion are trying a new venture:  Medicare and Medicaid insurance fraud.  Identity theft plays a central role as scammers steal the identities of both doctors (to setup fake clinics) and patients (to bill the government).  These ethnic organized crime groups often target poor, elderly or otherwise disadvantaged folks who rely on government aid.  When offered a token payout (usually $100 or less) to come in for “treatment” these individuals comply – but rarely receive any sort of medical care even if they truly need it.  CNN posted this article about the problem recently.  How big is the problem?  This press release from the Office of the Inspector General for Health and Human Services indicates that it’s owed $2.4 billion for the first HALF of the fiscal year 2009.

Fugitives on Facebook

Almost on cue, following my last post about using social networking sites as an investigative tool… I ran across this article about a fugitive hiding from US authorities in Mexico who (somewhat foolishly) updated his status and location on his Facebook page.  While it is more and more common for investigators to search social network sites for information, what is most interesting to me about this example is that the first searches turned up nothing.

 

“Investigators initially could find no trace of him on social networking sites such as Facebook and MySpace, and they were unable to pin down his exact location in Mexico.”

But the actions of a persistent investigator turned up new information later in the investigation.  I recently posted a question on LinkedIn about the use of monitoring tools in investigations to address this very issue.

“But several months later, Secret Service agent Seth Reeg checked Facebook again — and up popped Maxi Sopo. His photo showed him wearing a black jacket decorated with a white lion as he stood in front of a party backdrop featuring logos of BMW and Courvoisier cognac.”

The other neat thing about this investigation is that although the fugitive’s profile was private – and therefore all the details were not visible to outsiders – the investigator was able to obtain the information by researching the fugitive’s “friends” on Facebook.

“Although Sopo’s profile was set to private, his list of friends was not, and Scoville started combing through it. He was surprised to see that one friend listed an affiliation with the Justice Department and sent him a message requesting a phone call.

‘We figured this was a person we could probably trust to keep our inquiry discreet,’ Scoville said.

The former official told Scoville he had met Sopo in Cancun’s nightclubs a few times, but did not really know him and had no idea he was a fugitive. The official learned where Sopo was living and passed that information back to Scoville, who provided it to Mexican authorities. They arrested Sopo last month.”

Social (Media) Stratification

A recent study by Nielsen (referenced in this CNN article) indicates that social networking sites may magnify social and economic  stratification.  The study suggests that less affluent people tend to be users of MySpace, more affluent users are on Facebook, and the most affluent are on LinkedIn and Twitter – although researchers did notice significant overlap – where users are registered on multiple networks – particularly between Facebook and LinkedIn.  While MySpace captured an early lead in the social networking race, more educated and affluent users jumped ship and headed to Facebook.  Consider this sobering statistic - Percentage of users with a six-figure salary:

16% MySpace | 23% Facebook | 38% LinkedIn

Why the disparity – particularly between MySpace and Facebook?

A lot of it has to do with the disparate beginnings of MySpace and Facebook, said Adam Ostrow, editor-in-chief of Mashable, a blog about social media. Facebook originated at Harvard University and was limited at first to students at approved colleges before opening itself to the public in September 2006.

MySpace, on the other hand, had a “come one, come all” policy and made a mad dash towards monetization, Ostrow said. “They used a lot of banner ads without regard to the quality, and it really diminished the value [of the site] for the more tech-savvy demographic.”

These are factors for the investigative researcher to take into consideration when querying social networking sites.

NodeXL: Free Link Analysis Tool

Maybe not as powerful and as polished as some of the other commercial products on the market and used in the intelligence analysis space, NodeXL is definitely the best bargain at zero dollars.  Microsoft’s visual link analysis tool (fomerly known as .NetMap) is an Excel 2007 template for viewing and analyzing network graphs, along with a set of .NET Framework 3.5 class libraries that can be used to add network graphs to custom applications.  Check out the details here.  Thanks to Deborah Osborne at Analyst’s Corner for the tip.

The Fraud Excuse

Two insurance companies in Florida are in liquidation due to their insolvent financial condition.  Among the reasons for their downfall quoted in a recent article about their situation, “…roughly $4 million in losses due to being the target of ’several fraud rings’ preying on personal injury protection coverage in its commercial auto line.”

North Las Vegas Fire Captain Indicted on Arson Charges

Still think owner give-ups aren’t a problem?  Even members of the fire department are burning their cars to get out from under their loans.  Gary V. Stover, a Captain with  the North Las Vegas fire department allegedly faked the theft of his Toyota Sequoia and his insurance company paid off his $35,000 loan – including $12,000 of negative equity.  An accomplice helped Stover and provided an alibi.  Means.  Motive.  Opportunity.