Identity Resolution Daily

By Doug Wood - Infoglide SVP of Sales

Government and commercial organizations are under increasing pressure to more effectively identify and unravel threats before they happen.  Predictive analytics tools have traditionally been deployed in hopes of isolating transactional behaviors that may point to a risk of loss.  The market is well served with these systems, yet institutional fraud seems more prevalent than ever.  Lumping in good customers with bad ones simply because they coincidentally perform similar types of transactions?  Not smart.

As a result, organizations are turning to identity resolution technology that drills down into the entities and associated relationships with a high degree of confidence.  In essence, technology that points to ‘who’ instead of simply ‘what’.  Identity resolution engines help organizations transfer from a pattern-centric to an entity-centric fraud analytic model.

So, how can analysts reconcile the massive amount of related data that exists in bits and pieces across dozens or hundreds of disparate databases?  How can they ‘connect the digital dots’ between individuals and other entities represented across so many data sources?  Key to understanding identities is the ability to perform social link discovery to determine not just ‘who’s who’… but also ‘who knows whom’.

Data warehouses and data mining tools have been used in the past to try and solve this challenge; however they require the data to be aggregated, standardized or otherwise deteriorated in order to be mined.  That’s like a CSI investigator tidying up the crime scene ahead of time, so she can more easily look for evidence.  Infoglide Software Corporation’s Identity Resolution Engine™ (IRE) looks at the evidence in all its’ gore and imperfections to present the analyst with a clear and concise view of the individuals who would commit fraud.

Gartner Group – in their 2009 Hype Cycle for Master Data Management report – suggested that “entity resolution and analysis was previously an obscure technology that has come to the forefront as a result of world events and market forces where it is used to identify identities and networks of identities who are attempting to hide their relationships to each other.”

Scott Schumacher, a government security and technology expert and former chief scientist at Initiate Systems (now IBM’s InfoSphere Identity Insight), may put it best when he writes “By identifying and managing relationships between persons of interest and other individuals or objects, (id)entity resolution delivers a more comprehensive view of people, places or things and their activity.”

By significantly mitigating the signal-to-noise challenge faced by fraud and crime analysts, organizations can be more proactive in identifying and preventing unwanted behaviors.  That’s precisely what an identity resolution engine does.

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[Post from Infoglide] Big Oil and Big Data

“In ‘Mining the Tar Sands of Big Data’, Matthew Driscoll and Roger Ehrenberg draw an apt parallel between the earth’s vast oil reserves and big data: until recently it wasn’t economically and technically feasible to mine these resources efficiently. In both cases, that’s changing.”

Hattiesburg American: Scammers get away with $60 billion

“It’s obvious that Medicare’s and Medicaid’s default button is set to ‘pay the claim’ instead of seeking more complete verification that the patient needed the benefit or actually received it. There is no other way people could rip off the agencies for so much money - like the three brothers from Miami suspected of fraud for $119 million worth of billing for HIV drugs before reportedly fleeing to Cuba.”

KSAZ: Inside the Arizona Counter-Terrorism Center

“‘Terrorism is a threat to Arizona as much or more than many states because of our size, and critical industries we have here.’ Roughly 200 people work there, including FBI agents, Homeland Security agents, and police officers from different departments around Arizona. They analyze tips and track down leads, anything having to do with potential terrorist activity.”

O’Reilly Radar: Will data be too cheap to meter?

“When I explain to people why the Big Data movement is important — why it’s a real change instead of a fad — I point to price as the fundamental difference between the old and new worlds. Until a few years ago, the state of the art for doing meaningful analysis of multi-gigabyte data sets was the data warehouse. These custom systems were very capable, but could easily cost millions of dollars. Today I can hire a hundred machine Hadoop cluster from Amazon for just $10 an hour, and process thousands of gigabytes a day.”

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By the Infoglide Software team

Financial Fraud Law: SEC Brings Expert Network Insider Trading Charges

“The Securities and Exchange Commission has charged that six expert network consultants and employees illegally tipped hedge funds and other investors to generate nearly $6 million in illicit gains… The SEC alleged that four technology company employees, while moonlighting as consultants or ‘experts’ to Primary Global Research LLC (’PGR’) without the knowledge of their employers, abused their access to inside information about such technology companies as AMD, Apple, Dell, Flextronics, and Marvell. The consultants received hundreds of thousands of dollars in purported consulting fees from PGR for sharing the inside information with PGR employees and clients, according to the SEC.”

ksnt.com: Fraud Insurance Claims on Vehicles

“Clark said people have come up with clever ways to file fraud claims by staging accidents where everyone in the accident is part of it and they try to get some sort of disability payment.”

SFGate: Medicare fraud has its own most-wanted list

“Topping the list are Miami brothers Carlos, Luis and Jose Benitez. Owners of a string of medical clinics, they allegedly scammed Medicare out of $119 million by billing for costly HIV drugs that patients never received or did not need. Authorities say they bought hotels, helicopters and boats before fleeing to Cuba.”

Business Day: Employee fraud ‘is on the rise’ with executives leading the way

“Companies worldwide have seen an increase in fraud due to ineffective internal controls, according to a report issued by Deloitte yesterday… a significant percentage of companies (51%) recognised they did not have sufficient numbers of trained staff to provide effective assurance on fraud risk in their organisations, with smaller businesses finding themselves even more constrained.”

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By Mike Betron, Infoglide Software Director of Marketing

In “Mining the Tar Sands of Big Data”, Matthew Driscoll and Roger Ehrenberg draw an apt parallel between the earth’s vast oil reserves and big data: until recently it wasn’t economically and technically feasible to mine these resources efficiently. In both cases, that’s changing.

The authors trace the growth in the amount of data generated to “advances in three principal areas: sensor networks, cloud computing, and machine learning.” Both physical (e.g., RFID) and software (e.g., tweets) sensors exist, and multiple forms are being deployed in products and processes each day, thus generating a tsunami of data that grows exponentially each year.

In fact, the growth in big data is even affecting the consumption of energy:

Just as these devices have multiplied, so have the data centers that they communicate with. Housed in climate-controlled warehouses, they consume an estimated 2 percent — and represent the fastest growing segment — of the United States energy budget.

We’ve covered and written about the impact and potential of cloud computing here before. By treating computing resources as a utility served up “by the drink”, cloud computing is another enabler of today’s spectacular increase in data generation.

Machine learning is the third promising factor listed by the authors that is related to the big data explosion:

Its algorithms lie at the heart of spam filters, self-driving cars, and movie recommendation systems, including one to which Netflix awarded its million-dollar prize to in 2009. While data storage and distributed computing technologies are being commoditized, machine learning is increasingly a source of competitive advantage among data-driven firms.

Those who want to exploit the availability of big data have another powerful tool at their disposal – entity resolution. The ability to search across multiple databases with disparate forms residing in different locations can tame large amounts of data very quickly, efficiently resolving multiple entities into one and finding hidden connections without human intervention in many application areas, including detecting financial fraud.

By exploiting advancing technologies like entity resolution, systems can give organizations a distinct competitive advantage over those who lag in technology adoption.

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By the Infoglide Software Team

Proactive Investors UK: Westminster Group secures distribution rights for ID fraud detection software in UK and Middle East

Westminster Group PLC (LON:WSG) said it has secured distribution rights in the UK and the Middle East for the identity fraud detection software of Texas-based Infoglide Software. The commercial details of the deal were not disclosed. Westminster expects the product to be popular with national security agencies across the Middle East in particular. Infoglide’s identity resolution technology searches, matches and links entities across multiple, disparate data sources using over 50 algorithms.”

WSJ: Confidentiality Cloaks Medicare Abuse

“Dr. Wayne, a 50-year-old osteopath, denies abusing the system and hasn’t been accused of wrongdoing by authorities. He says his regimen ‘does wonders’ if used correctly. He adds that he gave physical therapy to ‘patients who needed it, with appropriate diagnoses, and I should get paid for it.’ Medicare administrators apparently felt otherwise. In 2009 he says he was placed on heightened scrutiny and eventually sold his business. But not until he had received more than $2.6 million from Medicare between 2007 and 2009, according to the person familiar with the matter.”

GigaOm: Mining the Tar Sands of Big Data

“Unlike oil reserves, data is an abundant resource on our wired planet. Though much of it is noise, at scale and with the right mining algorithms, this data can yield information that can predict traffic jams, entertainment trends, even flu outbreaks. These are hints of the promise of big data, which will mature in the coming decade, driven by advances in three principal areas: sensor networks, cloud computing, and machine learning.”

Criminal Justice Online: West Haven Woman Admits Role in Mortgage Fraud Scheme

“Specifically, on October 1, 2009, MARTINEAU purchased a residence at 211 Lloyd Street in New Haven after working with others to obtain an FHA-insured loan to buy the house at the fraudulently inflated price of $160,000. The loan package for this transaction included false information about the MARTINEAU’s employment, assets and liabilities, and MARTINEAU’s intention to occupy the property as her principal residence. The loan application also was supported by false documentation, including earning statements and fraudulent bank records.”

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By the Infoglide Software Team

CNN: Lottery officials: Rightful winners of ‘03 jackpot getting paid

“The buyer redeemed the ticket later at the outlet in Burlington and wasn’t told that he won a free ticket, investigators determined, according to the CBC. That ticket went on to win a $12.5 million jackpot. It was claimed by Kathleen Chung, sister and daughter of men who worked at the outlet.”

O’Reilly Radar: Will data warehousing survive the advent of big data?

“The current hype around ‘big data‘ has caused some analysts and vendors to declare the death of data warehousing, and in some cases, the demise even of the relational database. A prerequisite to discussing these claims is to understand and clearly define the term ‘big data.’ However, it’s a fairly nebulous concept.”

Healthlaw Insights: Whistleblower Suits are Rewarding and So is Fraud Recovery

“In addition, the Medicare Fraud Strike Force has been extended to seven cities. Using advanced data analysis techniques to identify high billing levels in healthcare fraud hot spots, the interagency teams can target emerging or migrating schemes along with chronic fraud by criminals masquerading as healthcare providers or suppliers.”

ClaimsJournal.com: Florida Businessman Charged with Workers’ Compensation Fraud

“Florida CFO Jeff Atwater announced the arrest of David Rodriguez-Socarras, who officials allege used a ’shell’ company and fictitious name in order to cash nearly $3 million in payroll checks through a money service business to avoid workers’ compensation premiums and payroll taxes.”

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[Post from Infoglide] Financial Services Has a Growing Problem: Internal Fraud

“The Aite Group recently authored a report entitled ‘Internal Fraud: The Devil Within.’ After surveying 35 fraud and product executives at financial institutions across the U.S. and Canada, they concluded that internal fraud is a severe and growing problem that often goes undetected and almost always flies under the radar of public scrutiny.”

Bloor: There’s identity resolution and then there’s identity resolution

“The second type of identity resolution is similar but different. The classic example is in police work. Here you want to know that some particular criminal has fifteen different aliases, say. Moreover, under each of those identities he or she will have multiple contacts and you may want to do social network analysis against those contacts to see who else might have criminal tendencies.”

Chicago Sun Times: Police sensing crime before it happens

“In October, the Chicago Police Department’s new crime-forecasting unit was analyzing 911 calls for service and produced an intelligence report predicting a shooting would happen soon on a particular block on the South Side. Three minutes later, it did, police officials say. That got police Supt. Jody Weis thinking. He wondered if the department could produce intelligence reports even quicker. Next time, officers might have an hour’s notice before a shooting — instead of just a few minutes.”

KERO23:Ten People Indicted In Wide-Ranging Real Estate Scam

“The indictment alleges that, from approximately January 2004 to September 2007, the defendants perpetrated a scheme to defraud mortgage lenders by submitting fraudulent loan applications with material misrepresentations, including misrepresentations concerning the borrower’s income, assets, employment status, and intent to use the home as the borrower’s primary residence… The scheme involved more than $20 million in losses to lenders.”

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By Mike Betron, Infoglide Software Director of Marketing

The Aite Group recently authored a report entitled “Internal Fraud: The Devil Within.” After surveying 35 fraud and product executives at financial institutions across the U.S. and Canada, they concluded that internal fraud is a severe and growing problem that often goes undetected and almost always flies under the radar of public scrutiny.

On the customer relationship side of the business, many financial institutions have increased what they know about external actors by making their systems smarter, e.g. enhancing existing software with identity resolution:

“By incorporating identity resolution technology, they enhance existing historical data systems with information drawn from a wide variety of dynamic data sources (e.g., social media). Providing a real-time ‘360 view’ of an individual and his/her associations is improving daily business decisions at many leading companies.”

However, most have not yet incorporated the same technology to catch fraud. This survey suggests that insider collusion and individual fraudulent acts are on the upswing, representing a significant and growing percentage of monetary fraud losses. Furthermore, the report suggests that fraud problems are often swept under the rug:

“Most financial services firms are not keen to discuss the issue; institutions that build their brands on trust and reliability do not want it widely known that insider fraud is a problem. As a result, 35% of survey respondents reported prosecuting 10% or less of their confirmed internal fraud cases.”

Effective solutions (e.g., Infoglide’s Anti-Fraud Solution Suite) are proven and available. By not actively identifying internal fraud problems and pursuing effective solutions, financial services firms open themselves up to huge financial and public relations risk. Equally important, they enable competitors who move proactively to gain competitive advantage.

As report co-author Julie Conroy McNelley says, “Financial services firms must examine their current internal fraud prevention environment and determine how to bolster it. As competitors develop more robust defenses, fraudsters will migrate to the path of least resistance.”

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By the Infoglide Software Team

South Florida Business Journal: State Farm sues doctors, who fight back

“A contentious battle is heating up once again between State Farm Insurance Co. and a group of doctors that the insurer alleges have been involved in a multimillion-dollar insurance fraud scheme, according to a lawsuit. The suit claims the doctors submitted fraudulent claims based on ‘medically unnecessary diagnostic procedures’ used on those in car accidents.”

The National: Time for health care to move to the next level

“A Booz & Company study recently quantified some of the projected benefits from a proposed e-health initiative in Australia: by 2020, the programme could eliminate up to 10,000 deaths caused by medication mistakes, along with up to 310,000 unnecessary hospital admissions, 2 million unnecessary outpatient visits, and 7 million laboratory tests.”

[PDF] Inside the Midmarket: A 2011 Perspective

“In 2009, midsize businesses (53%) were mainly consumed with reducing costs and increasing efficiencies. The progress and momentum gained from these efforts continue to yield critical benefits and advantages for midsize businesses. Because of this momentum, they are now in a position to turn their attention to more forward-looking aspects of their business. This is demonstrated by the significant increase in focus on customers (+20 pts), innovation (+7 pts), and revenue growth (+5 pts).”

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[Post from Infoglide] Entity Identity Management

“What is entity identity management? It simply means that an ER system can store and maintain a record of identity information that persists over time.  Entity identity management is essential for an ER engine to operate in identity resolution or identity capture mode and for it to maintain persistent entity identifiers.”

InformationWeek: 4 Companies Getting Real Results From Cloud Computing

“Why are they moving to the cloud? Rarely because it’s considered cheaper. In some cases, the cloud represents a faster, more flexible way to get a new system up and running. Oftentimes, it’s the ease of integration afforded by the cloud servers, using standard Web service practices, that lets a company launch a new mobile application faster or run a business process that cuts across many partners more efficiently.”

MindHealthBiz: Consumer ID

“A little over a year ago, Rand Corporation said that the Unique Patient Identifier would cost $11 billion, and pay off nationwide in reducing these sorts of medical errors, and in simplifying the nationwide effectiveness of the Electronic Health Record (EHR), which in turn can introduce a high level of efficiency, and a way to enforce patient privacy.”

pi newswire: US Sues NYC for Medicaid Fraud

“Enrollment in Personal Care Service requires approval from a qualified health care professional. This approval is missing in the cases of a ’substantial percentage’ of the 17,500 individuals who have received 24-hour care since 2000, claims the lawsuit. The lawsuit lists several examples of patients allegedly not properly assigned to the Personal Care Service. A 65-year-old woman was deemed to only need limited care, being of sound mind and body. Instead, she was provided with 24-hour care on the federal government’s bill.”

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