Gazette - How does your agency identify its fraud priorities?

PANEL DISCUSSION

The panellists

Supt Stephen Foster, Director, RCMP Commercial Crime Branch

Jonathan J. Rusch, Special Counsel for Fraud Prevention, Criminal Division, Fraud Section, U.S. Department of Justice

Murray Taylor, National Co-ordinator, Economic and Special Operations, Australian Federal Police

Supt Stphen Foster

The RCMP’s Commercial Crime program has 27 operational units located in major cities across Canada. Commercial Crime’s enforcement response to the wide variety of fraud-related criminal activities identified in our mandate is multi-faceted. Criminal activities encompassed by our mandate range from major fraud to mass marketing fraud to corruption to identity fraud. As well, the mandate includes crime prevention and deterrence through public education and awareness. Given this context, I think a broad perspective answer is required.

At the organizational level, RCMP senior management identifies national strategic priorities. Economic integrity is one of five such priorities. The other four are organized crime, youth, terrorism, and aboriginal communities.

Through threat assessments, media monitoring and demands for service, the Commercial Crime Branch identifies emerging fraud trends which pose the greatest risk to the public. On this basis, identity fraud and mass marketing fraud are our current enforcement priorities. Other branch priorities are currency counterfeiting, payment card fraud and corruption.

As resources are limited, we need to strike a balance between complaint investigations, intelligence-led investigations, and prevention awareness activities. Prioritizing between these activities is a judgment call. Operational unit managers allocate resources between these activities, often taking local factors and concerns into consideration.

The Priority Rating of Operational Files (PROOF) system is a tool developed by the Commercial Crime Branch to assist unit managers. PROOF is a software system that interprets 12 case-related specifics and assigns an overall numerical value to an investigation. This numerical value is the “PROOF score.” A higher PROOF score indicates that a matter should be given a higher priority. For example, PROOF criteria include the following: whether the offence is within mandate; the offence’s dollar value (higher yield gives a higher score); the age of the offence (more recent gives a higher score); and ease of gathering evidence (easier gives a higher score).

At the tactical level, our operational units prioritize between investigations. Managers consider several factors: PROOF score; whether the investigation touches one or more of the strategic priorities; Commercial Crime mandate; whether the activity is a branch priority; existing agreements, such as international treaties and memorandums of understanding; the dollar value involved; whether investigative expertise is required; victim impact; whether the offence relates to corruption; and, again, local factors.

The process of identifying RCMP Commercial Crime fraud priorities is well-rounded, taking many factors — both strategic and tactical — into consideration.

Jonathan J. Rusch

The United States Department of Justice identifies and implements its anti-fraud priorities in three ways. First, pursuant to the Department’s Strategic Plan for 2007–2012, the Department’s Criminal Division adopted a management plan that includes the following priorities:

• Ensuring the integrity of government. Under this priority, the Criminal Division pursues crimes such as election fraud, immigration fraud and procurement fraud, as well as public corruption relating to these and otheroffences. For example, the Department has established special task forces to pursue procurement fraud and fraud of all types stemming from disasters such as the 2005 hurricanes Katrina, Rita and Wilma, as well as fraud stemming from thereconstruction of Iraq.
  • Safeguarding and maintaining confidence in the marketplace. Under this priority, the Criminal Division pursues crimes such as corporate fraud, mass-marketing fraud, identity theft and cybercrime.
  • Reducing violent and organized crime. Under this priority, the Criminal Division pursues crimes (including fraud) that various types of criminal organizations commit to obtain illicit proceeds and to support their operations.
  • Transnational criminal enforcement.Under this priority, the Criminal Division pursues various types of crime that are conducted across international borders, such as organized crime and cybercrime, and actively conducts and supports international law enforcement training and institution-building.

Second, senior representatives of the Department and the Criminal Division chair a number of national-level interagency working groups that concentrate on particular types of fraud. These include the Bank Fraud Enforcement Working Group, the Corporate Fraud Task Force, the Mass-Marketing Fraud Working Group, the Mortgage Fraud Working Group, and the Securities and Commodities Fraud Working Group. In addition, the President’s Identity Theft Task Force has a Criminal Law Enforcement Subgroup. Each of these working groups convenes regular meetings that enable representatives of the Department and federal investigative agencies such as the FBI, the Postal Inspection Service and the U.S. Secret Service to share information on particular fraud trends and to identify opportunities for interagency co-operation in investigating these types of fraud.

Third, the Department of Justice, under the leadership of the Criminal Division, has initiated and conducted a number of proactive enforcement initiatives that target specific types of fraud. These include Operation Roaming Charge (2004), which targeted domestic and international telemarketing fraud, Operation Global Con (2006), which targeted international mass-marketing fraud conducted by criminal groups, and several operations directed at online economic crime. These operations have become increasingly international in scope, as U.S. law enforcement agencies recognize the importance of building co-operative relationships with law enforcement agencies in Canada and other nations and collaborating in transnational investigations and prosecutions.

Murray Taylor

The Australian Federal Police (AFP) recognizes that in order to maintain public confidence, anti-fraud business practices must be continuously improved and re-engineered to remain abreast of emerging technologies and new vulnerabilities.

In accordance with the AFP Fraud Control and Anti Corruption Plan (FC&AC Plan) 2007-2009, a range of best practice fraud-control and anti-corruption initiatives have been implemented across all functional areas of the AFP.

During preparation of the most recent FC&AC Plan, the AFP conducted risk assessments across the organization by devolving the risk management process to the business unit level. Managers and employees were asked to identify, analyze and evaluate internal and external risks and threats to their own business area as they relate to specific categories defined in the Commonwealth Fraud Control Guidelines.

Numerous risks were identified and evaluated across the organization. The highest risk category dealt with managing information technology and information security. Another risk identified was the management of client and strategic partner relationships in support of their respective anti-fraud initiatives. Finally, electronic commerce, electronic service delivery and the Internet were prioritized highly during the risk assessment process.

In accordance with directions provided by a high-level oversight committee, all fraud and corruption control issues are addressed and prioritized based on the likelihood of risks increasing and appearing across a number of business units. Treatments applicable to all fraud and corruption risks are continually monitored for their effectiveness and results are reported to the committee for review.

All medium residual risks identified across a number of business units are given higher priority for management and monitoring. Lower residual risks are managed through existing internal controls and are not subjected to further risk mitigation on the basis that they are at an acceptable level.

Performance monitoring and quality assurance occurs through environmental scanning and a professional standards complaint-analysis system. Emphasis is placed on identifying organizational fraud and corruption trends that can be addressed and treated. Within this model, allegations of corruption are the subject of independent oversight by the Australian Commission for Law Enforcement Integrity.

Externally, AFP fraud statistics are reported to the Attorney-General’s Department. Furthermore, in accordance with the Commonwealth Fraud Control Guidelines, the Commissioner certifies to the Minister for Home Affairs in the AFP’s Annual Report that he is satisfied that appropriate fraud prevention, detection, investigation and data collection procedures and processes are in place.

The current FC&AC Plan serves to integrate anti-fraud organizational risk assessment and reporting processes by recognizing that identifying risks is an integral part of everyday business across all functions of the AFP.