Critique
Petronila Peralta
Weakness
- Consideration of managements responsibility.
- What controls was management using to detect/deter this fraud.
Critique
Cherisse Watson-Jackson
- HUD Fraud
- Bypassed controls with paper forms
- Requested Supplemental PMI to unqualified participants
- Coordinated with participants to kickback a portion of the payments
Strengths
- Fraud and investigation thoroughly documented.
- Evidence collected is relevant and persuasive.
- Methods used appear sound and reliable.
Critique
- SNAP Fraud
- Gained control of EBT cards
- Issued expedited SNAP benefit payments to EBT cards she controlled
- Converted benefits to cash
- HUD Fraud
- Registered fictitious landlords and tenants
- Approved rental assistance payments for these landlords
- Recruited teller to cash checks
Weakness
- Limitation on scope does not appear proper
- Investigation was limited to cases with "unusually high SNAP payments"
Fraud Diamond
- Capacity- 6 traits
- Positioning: Watson-Jackson was in a management position which allowed her access
- Intelligence/creativity: had ability to bypass internal controls to make fake electronic benefit cards
- Ego: had confidence which aided to being undetected for years
- Coercion: was able to convince people to act as fake landlords to steal housing vouchers and involve others in the fraud
- Deceit: was able to conceal lies and remain undetected for years
- Stress: able to handle pressure well
Fraud Diamond
- Opportunity
- Becomes easier for one to commit fraud when the individual has access to information and assets
- Watson-Jackson had authority and control over the benefit program
- Used paper forms to bypass the computerized record-keeping
- Had supervisors approve benefit payments to unqualified participants
Investigation - Watson-Jackson
Investigation - Peralta
- SNAP participant complaint lead to investigation
- DOI reviewed cases with unusually high SNAP payments are reviewed
- Investigation was expanded to other programs administered by Ms. Watson-Jackson
- Fictitious landlords were identified by checking for duplicate mailing addresses
- Following the deposit trail of sham payments
- Peralta's attempt to submit fraudulent rental assistance payments lead to investigation
- DOI reviewed rental assistance payments requested through paper forms
- Computer evidence was collected and examined to link Peralta to the fraud
Conclusion
Discovering the Fraud
Control Changes
- Train Supervisors at the HRA
- Fraud identification program for warehouse-type retail stores
- Automate processes susceptible to abuse
- Deploy data analytics software
- Cherisse Watson-Jackson
- 11 Co-conspirators
- $1.5M
- 2012-2014
- SNAP fraud, HUD fraud
- Petronila Peralta
- $600,000
- 2008-2011
- HUD fraud
- Paper forms already eliminated
- Managers who improperly approved benefit payments were reprimanded
Fraud Diamond
- Motivation
- The pressure or need felt by the individual to commit the fraud
- Fraud driven by greed, self-interest, and personal gain
- Ms. Watson-Jackson
- Average supervisor salary $50,000-$65,000
- Petronila Peralta
- Average employee salary $40k-$50k
- New York cost of living
- Averages of $38,000-$50,000
- They wanted more money than what they were making
- Rationalization
- Act of formulating excuses to justify reasons for committing fraud
- Hardest aspect to notice because it occurs in the individuals' head and deals with their thought process
- Presence in the case
- Giving money in exchange for the stamps would not harm the citizens
- Money could buy them the same things that the stamps could
- Convince themselves they aren't being rewarded in a fair manner
- Prevention
- Management setting ethical environment
- Properly stating/communicating company’s ethics
- Performing the dilemma game as a training exercise to give employees skills to handle situations
Employee Fraud at the NYC HRA