By: Vanessa Sifuentes, MBA, CFE
Accounting Manager and Adjunct Faculty at South Texas College
Texas Border Business
Fraud. What comes to mind when you hear that word? There are so many possibilities. Credit card fraud, insurance fraud, check fraud, Medicare fraud, charity fraud, payroll fraud, financial fraud, identity fraud, internet fraud, welfare fraud, and tax fraud, just to name a few. Fraud is defined as a “wrongful or criminal deception intended to result in financial or personal gain.”
While it has been around for many, many years, it has of course has evolved over time. Twenty years ago, Internet fraud didn’t even exist. Now it is a constant concern all web users share.
Why is fraud so concerning? It’s primarily because it affects us all in negative ways, sometimes directly, but almost always indirectly. From doubting the authenticity of a charity to higher insurance premiums; every day we are all affected by the negative impact of fraud, sometimes in big ways.
In 2016, the McAllen area received national notoriety as being part of the “Largest National Medicare Fraud” takedown in history. Attorney General Loretta E. Lynch and the Department of Health and Human Services, announced an unprecedented nationwide sweep of Medicare Fraud involving approximately $900 million in false billings. According to the United States Department of Justice website, “As this takedown should make clear, health care fraud is not an abstract violation or benign offense – It is a serious crime”. Some examples of the alleged fraud includes: forging signatures of physicians, billing for higher-paying size of diapers, and illegal kickbacks.
Another example of fraud involves charities. This is a particularly disturbing type of fraud because it often involves taking money from individuals who are struggling financially, as well as taking advantage of people’s generosity and sacrifice. Those who donate money to a charity do so in hopes of helping others less fortunate than themselves. According to the Federal Trade Commission, there were organizations based in Tennessee who were portraying themselves as charitable organizations, Cancer Fund of America and Cancer Support Services, who spent less than 3 percent of those contributions on cancer patients.
According to the court documents, what was spent was virtually worthless as it included items such as: breakfast drinks, adult briefs, snack cakes, and blank cards. Mark Hammond, South Carolina Secretary of State was quoted as saying, “Some said they (the charity) would send children with cancer to Disney World. In this case, they used money to send themselves to Disney World”.
At South Texas College, where I am an Accounting Manager, we are constantly thinking about fraud, more specifically how to prevent and detect it. I am a Certified Fraud Examiner (CFE) and am currently a member of the Association of Certified Fraud Examiners. The ACFE is the world’s largest anti-fraud organization and provides the best anti-fraud training education available. The College recognizes the importance of safeguarding assets and provides assurance to our tax payers that every dollar is accounted for and there is a zero-tolerance for fraud.
South Texas College has a hotline that can be reached 24 hours 7 days a week to receive any concerns regarding potential fraud. All calls are anonymous and are addressed in a timely manner. South Texas College maintains the highest ethical standards and supports the detection and elimination of fraud.
For most organizations, there are reporting agencies who oversee them and can receive and investigate any potential fraud concerns. And for those reporting agencies who oversee, they also have organizations who oversee them. The more checks and balances we have, the more likely fraud will be deterred and detected. If we are ever exposed to any activity that appears to be fraudulent, it is our responsibility to report it. Fraud prevention is a responsibility we all share.
