Fraud Prevention and Investigation Branch

Fraud Prevention- Everyone’s Responsibility

Good Stewardship

ReportingFraud

Fraud Prevention

Cost of Fraud

Awareness&

Detection

Congressional Requirement

&Agency

Responsibility

Agenda

Historical Milestones

In 2005, DHS OIG (OIG-05-20) Reported the loss of Millions $ to - Fraud, waste and abuse after the 2004 FL hurricanes

Congressional, Public and Media Scrutiny

4

Historical Milestones August 2005 - Hurricane Katrina

1836 Reported Deaths Estimated Cost - $110 Billion

Congressional, Public and Media Scrutiny

2006 GAO estimated- 16% of Katrina and Rita payments were fraudulent or improper – Over $1 Billion

5

Historical Milestones 2006 - DHS OIG Florida Field Office Proposal

- FEMA partnership to provide support in furtherance of Criminal Fraud Investigations

Late 2006 – the Fraud Branch was created -The mission of the Federal Emergency Management Agency Fraud Prevention and Investigation Branch is to identify, impede, mitigate and prevent fraudulent losses of Federal funds and assets through agency fraud awareness training, comprehensive research, investigation and recoupment of losses in partnership with the U.S. Department of Homeland Security Office of Inspector General.

6

Cost of Fraud

Monetary

Association of Certified Fraud Examiners (5%)

Government Accountability Office (5.5%)

Insurance Industry ($97B annually)

Less Funds and More Oversight

Cost of Fraud

Non-Monetary

Bad Publicity

Congressional Hearings

Jeopardize Agency Reputation

Congressional Requirement

Post Katrina Emergency Management Reform Act, 2006

(PKEMRA)

All programs within the Agency administering

Federal disaster relief assistance develop and

maintain proper internal management controls to

prevent and detect fraud, waste, and abuse…

6 USC 795 Fraud, Waste and Abuse Controls

Provide training on the prevention of fraud, waste,

and abuse of Federal disaster relief assistance

relating to the response to or recovery from natural

disasters and acts of terrorism or other man-made

disasters, and ways to identify such potential fraud,

waste, and abuse.

6 USC 797 Fraud Prevention Training Program

2008 Legislation

18 USC 1040

- Fraud in connection with major disasters or emergency benefits

- Shall be fined under this title, imprisoned not more than 30 years, or both

- The term “benefit” means any record, voucher, payment, money or thing of value, good, service, right, or privilege provided by the United States, a State or local government, or other entity

Effective Fraud Prevention and Internal Controls

1) Leadership and Agency Buy-In Top→ Down

“While we at FEMA work to ensure resilience to disasters, we also bear the responsibility for demonstrating good stewardship over taxpayer dollars. This means minimizing and eliminating waste, fraud, and abuse of our programs and policies, and implementing common-sense measures to cut down on costs wherever possible.”

Craig Fugate, FEMA Administrator

13

Agency Responsibility

FEMA Publication 1, Chapter 4 Guiding PrinciplesThe Principle of Stewardship

FEMA personnel are public servants entrusted with public resources to perform a critical mission. They have ethical, moral, and legal responsibilities to protect these resources and ensure they are used effectively and for their intended purpose. FEMA employees are also entrusted with the responsibility to be good stewards of the Nation's natural and cultural resources and take this responsibility very seriously in executing their mission…

Fraud Prevention Program Design

Prevention

Analyze

Investigate

Prosecute

Recover Funds or Assets

Fraud Prevention

Training and Outreach (Internal and External for Partners)

Toolbox (Things to Remember)

Hotline and Email

Flyers and Brochures

Fraud Prevention

Awareness of Fraud Reduces Risk

Internal Controls, Filters, and Detection Devices

Report Fraud

Aggressive Recovery of Funds or Assets

Fraud Prevention

Examine closely external and internal programs, documentation, and activities for fraud indicators and filters.

Report all fraud or suspicions of fraud. Do not release funds when there is a suspicion of, or apparent fraud, until the

fraudulent concern has been resolved. De-obligate funds when fraud is apparent. Aggressively pursue the recovery of fraudulently obtained funds and/or

assets through criminal prosecution, recoupment, restitution, or civil action. Maintain cooperative relationships with internal components, DHS OIG, law

enforcement agencies and U.S. Attorney to facilitate FEMA fraud investigations and prosecution.

Case Studies

Program Fraud

Familiar Fraud

• False Claims

• False Documentation

• Untruthful on Application for Assistance

• Identity Theft

Fraud Prevention

S C A M Screen - evaluate and filter all information and documentation.

Control (Internal Controls) - clarify all information and documentation; look for what should and shouldn’t be there.

Assess and ask questions to verify.

Monitor and maintain accurate records and documentation.