Instances Of Fraud Research Articles

Practical Applications of Analysis of Three Emerging Trends in Limited Partner Operational Due Diligence

Practical Applications Summary In Analysis of Three Emerging Trends in Limited Partnership Operational Due Diligence, from the Winter 2020 issue of The Journal of Alternative Investments, author Jason Scharfman (of Corgentum Consulting) details three ways in which institutional investors (known as limited partners, or LPs) have increased the operational due diligence (ODD) they do on alternative investment fund managers (known as general partners, or GPs). ODD is the process by which LPs analyze the potential for investment losses due to inadequate processes, failed systems, or fraudulent behavior among GPs. Prompted by high-profile instances of fraud committed by fund managers (like Bernie Madoff) and increased regulatory requirements, LPs have improved their ODD by expanding its scope (the number of risk factors evaluated), depth (the amount of detail requested), and integration with investigative due diligence (such as criminal background checks on fund managers). To help coordinate and ensure the quality of this expanded ODD, some LPs have stopped outsourcing investigative due diligence to third parties and brought it in-house to help integrate it with ODD. Eliminating the middleman in this way helps focus the investigation on what is most relevant to the LP while containing costs as well. TOPICS:Real assets/alternative investments/private equity, legal/regulatory/public policy

Entrepreneurial Incentives and the Role of Initial Coin Offerings

Initial coin offerings (ICOs) are a new mode of financing start-ups that saw an explosion in popularity in 2017 but declined in popularity in the second half of 2018 as regulatory pressure, instances of fraud and reports of poor performance began to undermine their reputation. We examine whether ICOs are a passing fad or a worthwhile form of financing with beneficial economic properties. We do so by examining how financing a start-up through an ICO changes the incentives of an entrepreneur relative to debt and venture capital financing. Depending on market characteristics, an ICO can result in a better or worse alignment of the interests of the entrepreneur and the investors compared with conventional modes of financing. Notably, an ICO can be the only form of financing that induces optimal effort and hence maximizes the net present value of the start-up, and there are projects that should not take place at all unless they can be financed through an ICO.

EVALUATION OF THE STATE OF INTERNAL AGRICULTURAL CONTROL IN THE SYSTEM OF MANAGEMENT OF SCIENTIFIC RESEARCH INSTITUTIONS

EVALUATION OF THE STATE OF INTERNAL AGRICULTURAL CONTROL IN THE SYSTEM OF MANAGEMENT OF SCIENTIFIC RESEARCH INSTITUTIONS

The effects of class rarity on the evaluation of supervised healthcare fraud detection models

The United States healthcare system produces an enormous volume of data with a vast number of financial transactions generated by physicians administering healthcare services. This makes healthcare fraud difficult to detect, especially when there are considerably less fraudulent transactions (documented and readily available) than non-fraudulent. The ability to successfully detect fraudulent activities in healthcare, given such discrepancies, can garner up to $350 billion in recovered monetary losses. In machine learning, when one class has a substantially larger number of instances (majority) compared to the other (minority), this is known as class imbalance. In this paper, we focus specifically on Medicare, utilizing three ‘Big Data’ Medicare claims datasets with real-world fraudulent physicians. We create a training and test dataset for all three Medicare parts, both separately and combined, to assess fraud detection performance. To emulate class rarity, which indicates particularly severe levels of class imbalance, we generate additional datasets, by removing fraud instances, to determine the effects of rarity on fraud detection performance. Before a machine learning model can be distributed for real-world use, a performance evaluation is necessary to determine the best configuration (e.g. learner, class sampling ratio) and whether the associated error rates are low, indicating good detection rates. With our research, we demonstrate the effects of severe class imbalance and rarity using a training and testing (Train_Test) evaluation method via a hold-out set, and provide our recommendations based on the supervised machine learning results. Additionally, we repeat the same experiments using Cross-Validation, and determine it is a viable substitute for Medicare fraud detection. For machine learning with the severe class imbalance datasets, we found that, as expected, fraud detection performance decreased as the fraudulent instances became more rare. We apply Random Undersampling to both Train_Test and Cross-Validation, for all original and generated datasets, in order to assess potential improvements in fraud detection by reducing the adverse effects of class imbalance and rarity. Overall, our results indicate that the Train_Test method significantly outperforms Cross-Validation.

Designing A New Framework for Securing Electronic Commerce Systems at Design Phase: With A Special Reference to an Emerging Economy

In an emerging economy like Nigeria, internet-based businesses are growing at an exponential rate but this growth is highly threatened by many instances of fraud and e-systems’ compromise. While a lot of research work has been done on how to secure e-commerce transaction protocols, improve cryptographic schemes and amend the technical and business issues in e-commerce, the area of mitigating security challenges by incorporating security modules at design time has not been thoroughly explored. Hence, in this paper we present a framework for e-commerce security with a focus on four security design countermeasures models; Authentication, Authorization, enforcement of Access Control and Protection of Transaction privacy. The proposed framework which enhances National Institutes for Standards and Technology (NIST) security model, ensures that adequate security measures are incorporated in an e-commerce system at design time. The framework also ensures designing of secured e-commerce systems which are devoid of the expensive cost implication of system development life cycle incurred by security defects in the system testing phase which traces back to design shortfalls. For the purpose of this research work, we evaluate features called Malicious Attack Enablers (MAE) which aid malicious attack to thrive. The proposed framework will, therefore, aim at securing e-systems against these MAEs while satisfying legitimate user requirements. We assert the competence of our proposed framework by incorporating our security models into a SET enabled existing e-commerce system design, which will illustrate the effectiveness of our framework at the design phase as opposed to waiting till the testing phase. So we show that our new framework will unscramble the design of cost-effective e-commerce systems with curbed security vulnerabilities while contributing to the improvement of e-commerce security standards.

The Consumption of Adoption and Adoptees in American Middlebrow Culture

The Consumption of Adoption and Adoptees in American Middlebrow Culture Kimberly McKee (bio) Fraudulent practices are intertwined with modern adoption. From its early beginnings, and the rise of black market and gray market adoptions (Winslow), to coercive unethical practices to encourage birth mothers to relinquish their children (Siegal; Joyce), adoption cannot be understood simply as a benevolent practice of family formation. Modern adoption involves obscuring the biological biographical details of the adoptee (e.g., sealed birth records in domestic adoption; preventing adoptees from reviewing their full file in international adoption) (Modell; Terrell and Modell; Berebitsky; Herman), as well as other methods to make children more marketable in the adoption economy (Riben; McKee, "Monetary Flows"; Raleigh, "Assortative Adoption Marketplace"). Adoption files, thus, are an important technology crafted to facilitate twentieth and twenty-first century adoptions. Consequently, adoptees' lived experiences are highly mediated and reliant on the generosity of orphanage and/or adoption agencies in disclosing all information, as opposed to selecting what information to share with adoptees or their families upon adoption completion or when adoptees seek medical information and search for their biological families. The misinformation associated with adoption reflects popular media and mainstream society's investment in producing a stock story for adoption—the loving family rescuing a pitiful orphan—even when this story elides truths about caring birth families or abusive adoptive families. This is not to say that instances of fraud, deception, violence, or other unethical practices are not documented; rather, the public's reaction to these practices remains uneven, and while some agencies or adoption programs may close, others spring up to fill the gap (Siegal; Joyce; Winslow). Frequently, the stories that garner media attention are sensationalized, but not all unethical adoption practices are given equal scrutiny. For example, when additional safeguards are implemented to protect the rights of children and birth parents, adoptive parents often bemoan that these new regulations hinder the [End Page 669] speed at which they can complete their adoptions in case countries suspend adoption programs (Raleigh, Selling Transracial Adoption). Such suspensions also result in headlines speculating on the precipitous decline of international adoptions, with little or no nuance concerning why regulations are implemented (Greenblatt; Mann; Voigt and Brown). The movement toward more stringent requirements that protect both adoptees' and birth parents' rights comes after well-known documented cases of fraud, deception, abuse, and other unethical or otherwise dubious practices.1 The desire to protect the rights of all parties involved—and not just adoptive parents—is part of broader conversations within Adoption Studies and among supporters of birth family rights concerning adoption as a reproductive justice issue that emphasizes family preservation (H. Kim, Birth Mothers; McKee, "Adoption as Reproductive Justice"; Bae). This is not to say that this conversation places a primacy on biological families, or that it suggests violence is absent from biological families; rather, it acknowledges the violence of love associated with adoption in light of the multiple losses it inflicts on birth families and adoptees (Myers), as well as the fraudulent and deceptive practices associated with the adoption industry. Good intentions are not sufficient in remedying the lifelong implications of adoption in the lives of all parties involved. Interested in how the media engages instances of fraud within adoption, as well as how adoptees negotiate the practices that led to their adoptions, this essay explores the reunion of Korean adoptee twins Samantha Futerman and Anaïs Bordier. I also interrogate the broader societal and historical conditions of international Korean adoption that made their separation possible. Adopted from South Korea, Futerman entered an American family and Bordier entered a French family. Only in adulthood did the events that led to their reunion transpire, when Bordier's friend informed her that he saw a girl who looked exactly like her in a YouTube video. Their reunion and return to South Korea are presented in Twinsters (2015), a documentary released on Netflix that gained popularity in the mainstream and within the Korean adoptee community. News outlets featured the pair as a special interest story because they are one of the few known pairs of twins adopted to different families in South Korea's over sixty-year participation in adoption.2 The...

Breaking the Trust: How Companies Are Failing Their Customers

When numerous well-known suppliers and original equipment manufacturers engage in deceptive practices, including falsifying product data or neglecting to report known defects, the fundamental question that arises is whether any claim from any company can be trusted. This paper sheds light on the importance of tackling supply chain fraud more rigorously. This paper discusses the current state of supply chain complexity and customer practices and then highlights the prevalence of fraud and its impact on all consumers. Examples of renowned companies that have either publicly acknowledged fraudulent practices or were caught in some level of deception in their supply of products are provided. Examining the different instances of fraud enabled us to identify cost reduction as a conjoint recurring cause, which formed the baseline to develop and suggest guidelines for fraud detection and risk mitigation.

A Verifiable $(t, n)$ Threshold Quantum State Sharing Against Denial Attack

To detect frauds by a dealer or some participants, researchers have proposed verifiable threshold quantum state sharing (VTQSTS) schemes. However, the existing VTQSTS schemes either have lowcomputation efficiency or weak security. In this paper, a verifiable (t, n) threshold quantum state sharing against denial attack (VTQSTS-ADA) scheme is proposed to overcome the above limitations, in which the dealer Alice encodes the quantum secret sequence into two quantum message sequences and a quantum signature sequence. First, for each participant in the authorization subset, the received quantum signature sequence is validated by a quantum verification algorithm, and then a unitary transformation with a rotation key is performed on the received quantum message sequence; next, a new quantum signature sequence is generated by a quantum signature algorithm with the signature key. Each participant sends the new message sequences and signature sequence to the next participant. The original quantum secret sequence can be reconstructed when t(t ≤ n) participants collaborate. The security analysis shows that the proposed VTQSTS-ADA scheme can detect the fraud instances raised by the dealer and participants and provide stronger security such as resisting denial attacks and man-in-middle attacks compared with the existing schemes. The performance analysis shows that the proposed VTQSTS-ADA scheme outperforms the earlier VTQSTS scheme and is comparable to the recent scheme.

The effects of varying class distribution on learner behavior for medicare fraud detection with imbalanced big data.

Healthcare in the United States is a critical aspect of most people's lives, particularly for the aging demographic. This rising elderly population continues to demand more cost-effective healthcare programs. Medicare is a vital program serving the needs of the elderly in the United States. The growing number of Medicare beneficiaries, along with the enormous volume of money in the healthcare industry, increases the appeal for, and risk of, fraud. In this paper, we focus on the detection of Medicare Part B provider fraud which involves fraudulent activities, such as patient abuse or neglect and billing for services not rendered, perpetrated by providers and other entities who have been excluded from participating in Federal healthcare programs. We discuss Part B data processing and describe a unique process for mapping fraud labels with known fraudulent providers. The labeled big dataset is highly imbalanced with a very limited number of fraud instances. In order to combat this class imbalance, we generate seven class distributions and assess the behavior and fraud detection performance of six different machine learning methods. Our results show that RF100 using a 90:10 class distribution is the best learner with a 0.87302 AUC. Moreover, learner behavior with the 50:50 balanced class distribution is similar to more imbalanced distributions which keep more of the original data. Based on the performance and significance testing results, we posit that retaining more of the majority class information leads to better Medicare Part B fraud detection performance over the balanced datasets across the majority of learners.

Auditors’ Perceptions of the Effectiveness of Fraud Prevention and Detection Methods

Fraud has emerged as an undesirable offshoot of human greed and pressure to perform in growing corporate world. It has led to erosion of stakeholders’ confidence across the globe. Now, they see the annual reports and other corporate filings with scepticism. Despite increasing instances of fraud, the anti-fraud mechanism of the business organisations is not up-to-date. The present study aims to examine the effectiveness of fraud detection and prevention methods used by corporate sector. A survey of 336 auditors seeking their perception about effectiveness of various anti-fraud methods has been conducted. The findings reveal that corporate governance is the most effective tool against fraud. Use of information technology, timely audit, regular inspection and corporate policies and procedures, also, play a vital role in curbing fraudulent practices in an organisation. Thus, the findings suggest that expenditure on effective anti-fraud methods should not be viewed as an expense; instead, it must be considered as an investment as it saves from the potential losses due to fraud and damage to business stability, revenue and image.

Explaining electoral fraud in an advanced democracy: Fraud vulnerabilities, opportunities and facilitating mechanisms in British elections

Explanatory theories of electoral fraud are usually developed for new and failing democracies. However, while rarer, electoral fraud does happen in advanced democracies. Because data on fraud in advanced democracies are scarce, single instances of fraud are studied in isolation and offer very little generalisability. This study uses a unique comparative dataset of 35 in-depth, semi-structured interviews from eight locations, only half of which experienced allegations of fraud. We show that theories of why and how fraud happens in developing democracies can be extended to an advanced democracy. We also provide a detailed description of two micro-mechanisms, which facilitate fraud taking place and thus provide a causal link between the structural vulnerability to fraud and the direct opportunities for fraud to take place. The case study of Britain focuses mostly on the biraderi structures within the British South Asian communities, but we offer ways in which these structures generalise more broadly.

State loss analysis with investigation audit implementation on cheating indication of subsidized fertilizer distribution in the district x with fraud triangle analysis

This study aims to investigate fraud cases in the distribution process of subsidized fertilizers to disclose the facts in proving the fraud or commonly called the investigative audit. Fraud identification is done by applying an audit investigation on the distribution, use and supervision of subsidized fertilizer by analyzing the elements related to the fraud triangle. Fraud triangle theory is an idea that examines the causes of fraud. This idea was first coined by Donald R. Cressey (1953) which states that there are three conditions that are always present in every instance of fraud. The three conditions namely, pressure, opportunity and rationalization. The population of study is farmers, farmer groups, retailers and supervisor in PT. PUSRI Central Java marketing area. The sample selection was done in the District X to some farmers, farmer groups, retailers, and supervisors as witness. The data collection is done by applying the elements of the investigation that is observation, interview, and secret documentation process. Then indications of fraud were analyzed using analysis of fraud triangle. The results show that the fraud identified in the fraud on data collection of Definitive Plan for Group Needs (RDKK) and the lack of oversight and public ignorance about the mechanisms of subsidized fertilizer procurement. After conducting an investigative audit can be known perpetrators of fraud in the mechanisms of subsidized fertilizer. Aspects of the problem that there are indications of fraud, indications are all contain elements of fraud triangle.

An ounce of prevention: opportunity structures for white-collar crime in environmental markets

Markets, in which participants are given a right to pollute that can be bought and sold, are an increasingly popular form of environmental regulation. The bulk of research in this area focuses on market implementation, efficiency, and effectiveness, but merely notes the need for strong government oversight. Despite large-scale instances of fraud in several markets, detailed understanding of what monitoring and enforcement mechanisms will effectively protect market participants is lacking. Research on criminal opportunities is primarily limited to a few studies of the European carbon market. In the following paper, we begin to fill this gap in the literature. We draw upon Benson and colleagues’ extensions of routine activities and situational crime prevention theories to examine how business systems, processes, and networks increase or reduce opportunities for white-collar crime. Specifically, we assess whether these reconceptualized opportunity theories explain the differing levels of known white-collar crime in two domestic markets: the United States Acid Rain Program and the U.S. Renewable Fuel Standard Program. Implications for theory and practice will be discussed.

The True Exception to the Rule in Foss v. Harbottle: Statutory Derivative Action Revisited

In corporate law, the derivative action mechanism allows minority shareholders to file and litigate on behalf of the company a lawsuit against a corporate insider whose action has allegedly injured the company. The derivative action is a mechanism that corporate law furnishes to tackle agency problems because the corporate insiders who should initiate such claims occasionally become caught in a conflict of interests. The derivative action is an essential and well-known corporate governance device, the purpose of which is to ensure that agency problems that inherently trouble business entities do not hamper attempts to obtain redress from wrongdoers whose actions have injured the company especially in instances of fraud. This paper discusses the paradigm shift from the strict protection offered majority shareholders by the rule in Foss v. Harbottle to a greater recognition of individual shareholders’ rights, thereby giving a liberal interpretation to the true exception thus, making the rule less of a practical barrier to shareholder right enforcement

The EU’s Emissions Trading System, Part 1: Taking Stock

ABSTRACTThis is part 1 of a paper that revisits the European Union’s Emissions Trading System (EU ETS) in an attempt to take stock of how the system has worked and evaluate it from the standpoint of radical political economy. The paper briefly discusses the basics of the scheme, including its design as a financial instrument and its performance during the first trading period (2005–2007). It then moves to elaborating on the workings of the scheme during phase 2 (2008–2012) and on the initiation of phase 3 (2013–2014). This analysis discusses the adjustments and the extensions of the scheme, compliance results and allowance trades and prices with a critical eye. The paper reveals the unsatisfactory results of the scheme (even in its own proclaimed aims), which include allowances surplus, allowance trades for pure financial purposes, low and volatile price of allowances, windfall profits, extensive use of Kyoto project-based credits, and several malfunctions and instances of fraud. These findings set the ground for part 2 of the paper which offers a critical assessment of ETS from the standpoint of radical political economy, putting emphasis on the needs and interests of the unprivileged working people.

The EU’s Emissions Trading System, Part 2: A Political Economy Critique

ABSTRACTThis is part 2 of a paper that revisits the European Union’s Emissions Trading System (EU ETS) in an attempt to take stock of how the system has worked and evaluate it from the standpoint of radical political economy. In part 1 of the paper the basic design, the workings and the outcomes of the scheme were discussed with critical perceptiveness. In particular, the paper revealed the unsatisfactory results of the scheme (even in its own proclaimed aims), including allowances surplus, allowance trades for pure financial profit, low and volatile prices of allowances, windfall profits, extensive use of Kyoto project-based credits, and several malfunctions and instances of fraud. These findings set the ground for part 2 of the paper, which offers a critical assessment of ETS, proclaimed by mainstream analyses as the major vehicle for the transition to a low-carbon economy. In particular, the complications and instabilities created by the increasing financialization of the carbon market are exposed. Moreover, the ineffectiveness of the ETS as a catalyst for investments in clean energy technologies, especially in times of economic crisis, is substantiated. Since the deep embeddedness of the scheme in capitalism risks climate sustainability, the analysis concludes that a more radical transformation of society with an eco-socialist orientation is needed.

Peer Review in Transplantation.

Peer Review in Transplantation.

Does Your Patient Need Diabetic Therapeutic Footwear? (Where Benefit, Evidence, and Bureaucracy Collide)

In 2012, the estimated incremental burden of diabetic foot ulceration in all Medicare and non-Medicare patients in the United States was $9.1–13 billion (1). These costs do not include the suffering of patients and families, loss of income, loss of mobility, and predicted increased mortality. Coverage for extra-depth or custom-molded therapeutic shoes and inserts for individuals with diabetes became a Medicare benefit on 1 May 1993. Within 5 years of the benefit’s availability, a report from the Office of the Inspector General of the United States found that 57% of paid claims for therapeutic shoes had missing or inadequate documentation. An audit of beneficiaries found that 3% did not report having diabetes, 12% did not report any of the qualifying conditions, and 47% denied having a foot deformity or previous amputation (2). As with any government program, instances of fraud and abuse have been reported. Dr. Comfort shoes paid a fine of $27 million for providing inserts that did not meet Medicare standards (3). A provider in California was accused of entering an extended-care facility and offering free shoes to residents, telling them the government wanted them to have shoes. Individuals who did not walk were told the shoes would help them walk (4). To qualify for footwear coverage, Medicare beneficiaries must have diabetes plus one of the following conditions: neuropathy with evidence of callus, previous or current ulcer, previous or current pre-ulcerative callus, previous amputation, foot deformities, or poor circulation. How Medicare defines neuropathy (e.g., does it require an insensitive limb?), pre-ulcerative callus, foot deformity, or poor circulation is unclear. The Centers for Medicare & Medicaid Services requires that the treating physician (MD or DO) must be managing the patient’s diabetes under a comprehensive plan of care and must certify …

Ten reasons why carbon markets will not bring about radical emissions reduction

Almost two decades since the Kyoto Protocol was adopted, global greenhouse gas emissions are still rising rapidly. We argue that the global climate policy focus on carbon markets has played a significant role in the failure to reduce emissions. There are 16 compliance carbon markets in operation across the world. Many more are planned, although there have been numerous problems with carbon trading, including ineffectiveness, weak regulation and implementation, instances of fraud, little to no emissions reduction and major legitimacy issues for governments and the private sector. In this paper we take a “strong” position, arguing that carbon markets do not have a role to play in a policy scenario that requires radical emissions reductions in order to avoid dangerous greenhouse gas concentrations. We put forward 10 reasons why carbon markets should not be the preferred climate policy choice, which we have collated from positions taken by grassroots social movement organizations, think tanks, NGOs and other political advocacy groups as well as individual scientists and scholars.

The plant breeding industry after pure line theory: Lessons from the National Institute of Agricultural Botany

In the early twentieth century, Wilhelm Johannsen proposed his pure line theory and the genotype/phenotype distinction, work that is prized as one of the most important founding contributions to genetics and Mendelian plant breeding. Most historians have already concluded that pure line theory did not change breeding practices directly. Instead, breeding became more orderly as a consequence of pure line theory, which structured breeding programmes and eliminated external heritable influences. This incremental change then explains how and why the large multi-national seed companies that we know today were created; pure lines invited standardisation and economies of scale that the latter were designed to exploit. Rather than focus on breeding practice, this paper examines the plant varietal market itself. It focusses upon work conducted by the National Institute of Agricultural Botany (NIAB) during the interwar years, and in doing so demonstrates that, on the contrary, the pure line was actually only partially accepted by the industry. Moreover, claims that contradicted the logic of the pure line were not merely tolerated by the agricultural geneticists affiliated with NIAB, but were acknowledged and legitimised by them. The history of how and why the plant breeding industry was transformed remains to be written.