Entity Resolution: How to Catch a Dummy
By Robert Barker, Infoglide Senior VP and Chief Marketing Officer
Sometimes you just have to sit back and marvel at the lengths some people will go to keep from doing the right thing and paying their workers compensation premiums!
In the latest scheme we’ve heard about, California attorney general Jerry Brown has filed a lawsuit against a group who decided to exploit a provision of the CA workers comp law. The provision was designed to preclude companies having to pay WC premiums for corporate directors, so this group was able to convince as many as 200 clients that they could show them how to exploit the loophole by declaring rank-and-file employees to be directors, sometimes of “dummy” corporations, and issue stock to them. This then “allowed” them not to pay WC insurance for these workers by supporting a subsequent claim that they were directors of a corporation and therefore not required to have WC insurance.
While the case was apparently solved by traditional methods, using identity (or entity) resolution technology might have found the miscreants sooner like it’s already finding similar types of employer WC fraud. If you assume the dummy corporations would be required by law to file information that included names, addresses, and other information about the bogus corporate officers, then an entity resolution system with access to the appropriate data sources could have alerted authorities to the suspicious connections between the individuals involved.
I never cease to be amazed by the different tactics people will come up with to defraud. Because they keep discovering new ways to cover up their bad actions, organizations need flexible solutions that adapt to new information. Basing solutions on extensible and configurable entity resolution technology is often the right answer.
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