2017 July Luncheon

2017 July Luncheon Photo
For the past nine years Justin Geer has worked as an Immigration Officer at the Honolulu Field Office of the USCIS, an agency of the Department of Homeland Security. Justin works to enhance the integrity of the legal immigration system by helping to lead agency efforts to identify threats to national security and public safety, detect and combat immigration benefit fraud, and remove systematic and other vulnerabilities. Prior to his work with USCIS, Justin worked for a non-profit in the Chicago area that specialized in refugee resettlement and immigration legal services. U.S. Citizenship and Immigration Services (USCIS) created FDNS in 2004 in order to strengthen USCIS’s efforts to ensure immigration benefits are not granted to individuals who pose a threat to national security or public safety, or who seek to defraud our immigration system. In 2010, FDNS was promoted to a Directorate which elevated the profile of this work within USCIS, brought about operational improvements, and enhanced the integration of the FDNS mission in all facets of the agency’s work. Today FDNS continues to lead the USCIS effort to ensure the integrity of the nation’s immigration benefits processes.

FDNS’s primary mission is to determine whether individuals or organizations filing for immigration benefits pose a threat to national security, public safety, or the integrity of the nation’s legal immigration system. FDNS officers are located in every USCIS Center, District, Field, and Asylum Office. FDNS officers are also located in other government agencies. Supporting the USCIS mission, FDNS’s objective is to enhance USCIS’s effectiveness and efficiency in detecting and removing known and suspected fraud from the application process, thus promoting the efficient processing of legitimate applications and petitions. FDNS officers resolve background check information and other concerns that surface during the processing of immigration benefit applications and petitions. Resolution often requires communication with law enforcement or intelligence agencies to make sure that the information is relevant to the applicant or petitioner at hand and, if so, whether the information would have an impact on eligibility for the benefit.

FDNS officers also perform checks of USCIS databases and public information, as well as other administrative inquiries, to verify information provided on, and in support of, applications and petitions. Administrative inquiries may include:
• Performance of fraud assessments – FDNS officers engage in fraud assessments (including Benefit Fraud and Compliance Assessments) to determine the types and volumes of fraud in certain immigration benefits programs;
• Compliance Reviews – Systematic reviews of certain types of applications or petitions to ensure the integrity of the immigration benefits system, and
• Targeted site visits – Inquiries conducted in cases where fraud is suspected. FDNS uses the Fraud Detection and National Security Data System (FDNS-DS) to identify fraud and track potential patterns. USCIS has formed a partnership with Immigration and Customs Enforcement (ICE), in which FDNS pursues administrative inquiries into most application and petition fraud, while ICE conducts criminal investigations into major fraud conspiracies.

FDNS also conducts Benefit Fraud and Compliance Assessments to identify the types and volumes of fraud and develop mitigation strategies to deter and disrupt fraud. In July 2009, FDNS implemented the Administrative Site Visit and Verification Program (ASVVP) to conduct unannounced site inspections to verify information contained in certain visa petitions. USCIS provides petitioners and their representatives of record (if any) an opportunity to review and address the information before denying or revoking an approved petition based on information obtained during a site inspection

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2017 May Luncheon

2017 July

Kupuna Alert Partners

Our members were treated to several speakers in June, courtesy of Kupuna Alert Partners, a multi-agency partnership presentation covering Medicare Fraud Prevention, Securities Fraud Prevention and Prescription Drug Misuse.

Charlie Pang, Dept. of Public Safety, Narcotics Enforcement Division

He talked about the dangers of prescription drug abuse or misuse, such as someone taking medications not prescribed for them or combining different drugs to enhance the effect of another substance, such as alcohol.

Approximately 6.8 million Americans abuse prescription drugs, typically from friends or family members. Fortunately, there is a national takeback program, in which Hawaii participates. For information the Hawaii Medication Take Back Program, call (808) 837-8470. He noted that pharmacies, hospitals and clinics are not allowed to take back drugs, so contact the program to ensure safe disposal. As much as 3,200 lbs. have been collected and disposed of at H-Power Plant, which burns trash at high temperatures and ensures destruction. Disposing of drugs in the trash or toilet leads to drugs in the landfill or sewage systems, which do not break down and can affect reef fish.

To help protect against prescription drug abuse or misuse, document all medications you are taking and create five copies: (1) for your primary physician, (2) pharmacy, (3) family, (4) your wallet, (5) your refrigerator. Keep track of your medications, use one pharmacy to fill all prescriptions, secure your medications and if in doubt about any of your medications, ask your pharmacist.

Leolyn Sugue-Anderson, DCCA Securities Enforcement Branch

She covered the Top 5 scams in Hawaii, which were:

  • Impostor fraud – e.g. impersonating someone from the IRS
  • Fake prizes, sweepstakes, lotteries
  • Telephone, mobile scams – e.g. claims that someone got into your account, requesting account information
  • Banks and lenders – similar to above
  • Debt collection – e.g. claiming your home is facing mortgage foreclosure

Scams on the rise include:

  • Advance fees requesting a fee to enable you to collect on returns from an investment or prize
  • Romance scams targeting divorced, widowers
  • Grandparents – claiming a call from a “relative” who is stranded or hurt, requesting that they send money. Personal details may have been stolen or bought from other sources.

Protect against scams by not responding to calls from unfamiliar numbers, check financial statements for any unfamiliar transactions, and monitor your credit through free sites like www.annualcreditreport.com.

Laurie Paleka, Senior Medicare Patrol

Senior Medicare Patrols (SMPs) empower and assist Medicare beneficiaries, their families, and caregivers to prevent, detect, and report health care fraud, errors, and abuse through outreach, counseling, and education. SMPs are grant-funded projects of the federal U.S. Administration for Community Living (ACL), U.S. Department of Health and Human Services (HHS). Its basic message is

  • PROTECT – guard Medicare and Social Security numbers, don’t let anyone borrow
  • DETECT review medical statements the same way as a credit card or bank statement
  • REPORT if you notice anything unusual, to SMP at (808) 586-7281 or (800) 296-9422

Valerie Mariano, Dept. of the Attorney General, Community and Crime Prevention Branch

Hawaii Revised Statutes 485A covers regulations pertaining to the registration of securities, broker-dealer, agents, investment adviser representatives. When evaluating investment opportunities, check if they are properly registered by calling 1-877-447-22667. To check on financial advisers, search their histories on https://brokercheck.finra.org.

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2017 March Luncheon

2017 March

Our luncheon speaker was one of our own board members, Margie Sasaki, who currently works as a consultant for the Blue Cross Blue Shield Association’s Special Investigation Unit. Prior to going into business for herself, she worked at HMSA for 27 years, spending the last 16 years in management in the Special Investigation Department.

At our March luncheon, she talked about Medical Fraud Waste and Abuse, which affects all of us. The National Health Care Anti-Fraud Association (NHCAA) estimates that this category totals tens of billions of dollars a year, and we are all paying for it.
Some examples of the typical types of fraud:

  • Billing for services that were never rendered
    • May involve identity fraud
    • A patient went to a new dentist to find that her old dentist had actually not capped her teeth even though she was billed for it
    • A patient reported not obtaining services that were billed, claiming that an insurance card was stolen by a brother, who apparently used it at a doctor’s office. In that case, the doctor was the victim.
  • Billing for more expensive services or procedures (also known as “upcoding”)
    • Insurance companies “code” certain conditions to determine the appropriate level of service. A higher code generally means a medical need for a higher level of service.
    • Insurance companies routinely use algorithms to monitor these codes
    • Comparisons of doctors over time or by peer group can help detect potential fraud through unnecessary services to generate insurance payments
    • In one case, a doctor who was not a cardiologist purchased an echocardiogram for his office, the increased billing for these types of tests by 70 percent in a single year
    • In some cases, doctors receive kickbacks for testing referrals
  • Misrepresentation of non-covered treatments as medically necessary to receive coverage
    •  Cosmetic procedures like nose jobs are usually diagnosed for coverage as deviated septum
    • Falsifying patient diagnoses to justify tests or procedures

▪ Anesthesia for colonoscopies are only covered for high risk patients but some will add a COPD diagnosis just to get coverage

▪ The consequences include potentially getting turned down for life insurance if that information is accessed during routine reviews for coverage

She also showed various videos of mainland schemes, ranging from “runners” who get paid for each patient they bring in, rounding up non-English speakers so they could bill for services that were not in fact rendered or were unnecessary. Many schemes ran in the millions of dollars and caused serious harm to their patients. Because Hawaii is not a big market, we don’t often hear of these large cases here, but last year at least $9 million was recovered at HMSA. Opioid abuse, for example, strikes everyone, from ages 12 to 86 years old.

Margie’s advice:

    • Be informed of your diagnoses for your own health, and those of your loved ones
    • Keep good medical records and review your bills
    • Treat your insurance card like a credit card. Call your insurance company immediately if it’s lost.
    • Be on alert for elder abuse: some people go door to door and tell seniors they work for the government in order to to get their insurance card information.
    • Read your policy, especially the explanation of benefits

If you see any type of fraud, call your insurance company immediately. Other places to call include the Hawaii State Insurance Commissioner and Dept. Commerce and Consumer Affairs.

 

 

 

 

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2016 November Luncheon

2017-nov-derek-kim

The U.S. Probation Office monitors those who are released from federal prison. Derek Kim is one of 24 federal probation officers here in the state and supervises federal offenders on probation or supervised release. He has been with U.S. Probation for 18 years and supervises offenders convicted of sophisticated “whitecollar” offenses, including Ponzi schemes, tax offenses, embezzlement, money laundering, wire/mail fraud, bank fraud, and aggravated identity theft.

Many of his offenders have been chief financial officers, accountants, company presidents, and managers of government and private agencies or businesses, as well as programs that receive federal funds. “Supervision” could last anywhere from 3 years to a lifetime, depending on the crimes. This includes home inspections, drug tests, surveillance and searches.

In addition, the federal government pays for counseling and other services needed for rehabilitation. Derek notes that, oddly enough, white collar criminals tend to be remorseful when they are caught, because they had convinced themselves that they are no different from their clients, aside from the problems that drove them to commit their crimes.

As a probation officer, Derek can recommend that they go back to prison and start over if they don’t pass muster. Because of this, he sees his job as determining why they committed the crime, how they did it, and how he can help them keep from doing it again.

Based on his experience, there are four drivers for those who commit white collar crimes: Drug Habit, Financial Problems, Feeling of Entitlement and Greed (Predators). Common methods of crime, rationalization, risk of recidivism, and monitoring areas for each are as follows:

 

 

Drug Habit
Common Method Mail theft or purchase stolen credit card numbers from the Deep Web, create bogus cards by attaching magnetic strips to purchase and sell merchandise
Rationalization “I need to support my drug habit”
Risk Low, due to physical damage from drugs such as heroin or opiates. Tend to be remorseful and pay restitution after undergoing treatment.
Monitoring areas Attendance and attention to counseling, other treatment needed

 

Financial Problems
Common Method Embezzlement; more women than men
Rationalization “I couldn’t pay rent/ child support”
Risk Low to low-medium; not normally involved in other types of crimes
Monitoring areas Perform home inspections and credit checks to ensure no new credit cards are opened or large purchases are made

 

Feeling of Entitlement
Common Method Embezzlement, wire fraud, money laundering; tend to be ‘trusted employees’
Rationalization “They’re not paying me enough; they owe me.”
Risk High; tend to be repeat offenders
Monitoring areas Perform home inspections and credit checks to ensure no new credit cards are opened or large purchases are made

 

Predatory
Common Method Manipulation, tax fraud, hidden assets
Rationalization “I’m smarter than all of you.” Tend to blame the victim.
Risk High; tend to be repeat offenders, no remorse
Monitoring areas Psychological evaluation

 

 

 

 

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2016 September Lucheon

2016-september-luncheon

Cybersecurity consultant Chris Duque lends his expertise to the Honolulu Prosecutor’s Office following a one-year grant as an investigator in its white collar crime unit in 2013. These days, he lends his expertise on a wide range of issues, typically on cases involving any device that can access the Internet, such as cell phones.

The anonymity afforded by such devices should cause people to be more vigilant in verifying who they are sharing information with. However, he shared a case in which a CEO used a single email account for business, personal matters, shopping, and company financials using Quicken. Worse yet, he had a simple password that was easy to hack, let’s say “hawaii123”. Within one day, a single hacking incident caused $80,000 from sales to be diverted to the hacker’s bank account in the Netherlands. The hack was discovered when the CFO was unable to access his account, and learned that the hacker had changed the password.

In another case, a retired shipyard worker was referred to a financial planner by a friend. The financial adviser convinced him to make several wire transfers, incurring service fees and subsequently falling behind on their mortgage. His friend dissuaded him from calling the police; he later found out the financial planner and the friend was one and the same.

The biggest risk in social media is oversharing. LinkedIn does not have dual authentication, so anyone can pose as a fake company, and claim that it is hiring in order to obtain personal information from resumes.

Cybersecurity tips from Chris Duque:
 For passwords:
o use 5-8 characters
o use foreign language or pidgin phrases, combining words and numbers
o have 5-7 “core” passwords, e.g. “p1l1k1a*”
o add a prefix or suffix by website, e.g. “p1l1k1a*fb” for Facebook account
 Separate business email accounts from personal emails and other purposes
 To battle fake profiles, use dual authentication to verify identities of message sends, e.g. call or contact friends outside of social media.

 

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2016 July Luncheon

2016 July Luncheon PhotoU.S. Marshals are responsible for the protection of the federal judiciary and conduct special missions during security crisis events, and national emergencies. The U.S. Marshal Service is the premier agency focused on fugitive apprehension, and coordinate Asset Forfeiture-Equitable Sharing Programs focused on seizing criminal enterprises and reinvesting these proceeds to support local and state law enforcement agencies in enhanced training, equipment and personnel costs.

Gervin Miyamoto was nominated by President Barack Obama on January 20, 2010 to serve as the (19th) District of Hawaii, United States Marshal. U.S. Senator Daniel Inouye and U.S. Senator Daniel Akaka selected Marshal Miyamoto based on 45 years of combined military and civilian law enforcement experience. He served 25 years with the Honolulu Police Department and served in 10 different elite HPD assignments. He shared news clips of past Hawaii Fugitive Task Force Cases, how this “public school guy” who attended school to play football, run track and baseball, with below average grades was able to achieve his prestigious position.

Special Agent Marcus Ivey of the Secret Service discussed the agency’s role in financial fraud investigations, in line with its original 1865 mandate to suppress counterfeiting of U.S. currency and protect the integrity of the nation’s financial payment systems. In 2001, the USA Patriot Act created a nationwide network of Electronic Crimes Task Forces to provide support and resources to field investigations meeting specific criteria: significant economic or community impacts; or use of schemes involving new technology.

 

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2016 May Luncheon

ACFE Newsletter July-Aug 2016.pdf - Adobe Acrobat Pro

Addie Lui, AVP and Information Security Officer at Hawaii National Bank discussed the latest in Electronic Scams and Fraud Trends, such as the most used tactics by hackers, which include the following:

  • Phishing is a type of scam that often uses email messages that appear to be from legitimate sources, in order to collect money, passwords, account numbers or other non-public information from unsuspecting individuals
  • Other forms of social engineering include calls apparently coming from the IT staff to allow remote control into your computer, USB drive in the parking lot marked “company salaries” or a visit from a utility company such as Hawaiian Tel or HECO to perform “maintenance” or fake social media profiles as ploys to install malware.
  • Exploitation of weaknesses in IT systems, i.e. old fashioned hacking

Examples of these attacks include:

  • CEO/Executive impersonation – using information gained from LinkedIn or other social media sites, contact staff via email and request confidential information or electronic transfer of funds
  • W-2 scheme – impersonation of payroll company or company officer requesting HR staff for copies of W-2’s which can be used for ID theft and/or filing false tax returns
  • Ransomware – tricking a user into clicking on links to install ransomware, which encrypts files and locks it, holding them “hostage” until you pay a fee for an encryption key.

Companies such as health care firms, law firms and CPA firms are particularly vulnerable.

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2016 March Luncheon

ACFE Newsletter May-June 2016 (2)

Our luncheon featured speakers from the FBI, who discussed their recent fraud investigations:

A $26 million Ponzi scheme called “The Parking Lot” perpetrated by former Maui residents George Lindell and his daughter Holly Hoaeae associated with their mortgage and insurance business. In connection with the operation of their business “The Mortgage Store,” they issued promissory notes promising to pay a guaranteed return of 7 percent.

Through radio ads, magazines and a weekly radio show, they urged potential investors to attend weekly workshops where they taught seminars on how to use the equity in their homes for investment purposes. Lindell and Hoaeae would then utilize their status as mortgage brokers to refinance investor residences for this purpose. “The Parking Lot” lost a net amount of $8.9 million. They used the funds to support luxurious lifestyles such as a $3.5 million home, trips, cars and extensive credit card debt.

  • Jennifer McTigue, Marc Melton and Sakara Blackwell were involved in a mortgage fraud scheme in which they created false bank documents that made it appear that properties were free of their mortgages, when in fact they were facing foreclosure. The false documents were filed with the state Bureau of Conveyances to create a public record showing no mortgage and a clear title. These properties were then sold to buyers who were unaware of the mortgages, and thus subject to foreclosure. According to their indictment, the scheme had been running since 2011 before they were caught in 2014. They fraudulently obtained releases of over $4.5 million in mortgages and other official liens against those properties. Sales resulted in the trio making over $3.3 million. Blackwell was a real estate brokers and McTigue presented herself online as a financial strategist and real estate investor.
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September 2015 Seminar and Luncheon

Allan Bachman crop1 Sept 2015 seminarThanks to all who joined us for our first day-long seminar, offering 8 hours of CPE!
The first session, “Hidden in Plain Sight: Investigating on the Internet” was presented by Allan Bachman, ACFE Education Manager. He provided a virtual tool box of websites to help fraud examiners find people across social media sites, government websites, along with real-time demonstrations of how to use the sites in real time.

State Rep. Isaac Choy discussed Professional Ethics, encouraging participants to review the ACFE Code of Ethics and how it could apply to day-to-day situations fraud examiners could face.

Jason Pa from the Department of Homeland Security, and one of our most popular speakers, shared his experiences through his “Update on Money Laundering and Other Crimes in Hawaii”. As he prepares to retire at the end of this year, he reflected that the war on drugs continues, and advised our members to stay alert for the sake of their families, friends and the larger community.

He discussed the need to provide control and oversight over the upcoming medical marijuana dispensaries, which are tempting targets for drug dealers. He warned our members to be aware of state and federal regulations associated with the dispensaries, before engaging in business dealings with potentially criminal investors looking to lend legitimacy to their operations.

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July 2015 Luncheon

ACFE 7-19-15 speaker

We were honored to have as our July luncheon speaker John Madinger, author of the book, Money Laundering: A Guide for Criminal Investigators, now in its third edition and available on the ACFE website. At our luncheon, he discussed the Short History of Money Laundering, covered by one of the chapters in his book.

In total, this book provides a clear understanding of money laundering practices and explains the investigative and legislative processes that are essential in detecting and circumventing this illegal and ultimately dangerous activity. After a 36-year career in law enforcement where he developed and presented money laundering training in the United States, Europe, Asia, Africa, and the Caribbean, John is now an anti-money laundering consultant for the Department of Justice, developing AML and counter terrorism financing programs, mostly in the Middle East and North Africa.

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