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Florida Plagued by Financial Fraud

Actionable Intelligence Technologies
June 17, 2015 5:34 PM
Wed, Sep 16, 2015, 12:48pm EDT

Florida Plagued by Financial Fraud; Authorities Scramble, but Detection, Restitution Lag Far Behind Florida, particularly Tampa Bay and the Gold Coast area, has emerged as a national hotspot for financial fraud. While law enforcement agencies are focused on the issue, the rate of recovery of victims’ funds remains low.

DULLES, Va., June 17, 2015 /PRNewswire-iReach/ — It is estimated that Florida victims of financial fraud lost, on average, $3.2 million for each of the 37 people convicted in investment and other financial scams in the last fiscal year—a total of $118.4 million.1 However, a large part of the problem, per Actionable Intelligence Technology (AIT), a leading developer and supplier of advanced financial investigation systems, is that the pace of investigation of these crimes is so sluggish, by the time a perpetrator is identified and taken into custody, much—if not all—of the
money that was wrongfully gained is unrecoverable.

Susan Deehan, Chairwoman of AIT, says, “The reason recovery rates are so low is because of the complexity of fraud schemes and the time it takes to investigate any given case. What’s needed is fast technology used in a way that will drastically speed up these investigations.”

According to a recent series of articles in the Tampa Bay Business Journal, Florida is one of the nation’s areas most troubled by financial fraud. The Wall Street Journal similarly cited 16 “hot spots” nationally, where brokers with troubled regulatory records cluster. Sarasota, along with nearby Collier and Lee Counties, along with three communities in southeast Florida, made up five of the 16 hotspots—nearly a third of the nation’s total. Taken together, these population groups present an extraordinarily rich target for the unscrupulous.

The Office of Financial Research (OFR), which has staff in Tampa and other targeted high-risk areas, reports that more than 80% of Florida adults aged 40 and above have been solicited to participate in potentially fraudulent schemes. The Division of Securities also investigates allegations of wrongdoing. As a result of these two agencies—and of the work of the many local law enforcement organizations that helped support them—courts in Florida last year ordered $51 million in restitution.

Unfortunately, per Robert Kynoch, Chief of the Florida Bureau of Financial Investigations, very little of the money ordered as restitution is ever returned to investors. “By the time action is undertaken,” says Kynoch, “the assets have tended to be dissipated.”2

Deehan says this is why AIT developed its Comprehensive Financial Investigative Solution (CFIS): to enable investigators to analyze financial records exponentially faster and more accurately than would be possible with manual methods. What currently takes an investigator months and years to do, per Deehan, can now be performed in minutes and hours.

The input of financial data substantially drains resources from other investigations due to the enormous amount of man-hours required for the manual input of financial data. CFIS was designed as a purpose-built financial investigation system for use by law enforcement and regulatory agencies to perform rapid assembly and data capture of voluminous financial records, and to automate the analysis of complex investigations for a full range of illicit financial schemes and frauds.

In a recent test, for example, a Big Four accounting firm in the UK used CFIS to process a set of records they had originally entered by hand into Excel—a process which had taken a total of 312 hours of labor. With CFIS, they completed the process in one hour, and additionally found errors that had been introduced in original manual entry. The use of technology as an investigative tool should exponentially increase an agency’s ability to conduct large, complex investigations which will significantly increase detection of criminal violations, identification of co-conspirators, tracking down additional accounts, and development of investigative leads critical in successful asset forfeiture, arrests and successful prosecutions.

“Unfortunately, some users choose to only process statement transactions and dump them to Excel for analysis. This method leaves a great deal of automated analysis unused,” says Deehan, “and severely limits agencies in their ability to investigate, detect and permanently dismantle the criminal organization.”

About Actionable Intelligence Technologies:
Headquartered in Dulles, VA, award-winning Actionable Intelligence Technologies is the nation’s leading supplier of solutions for financial investigations. AIT’s customers include the New York Attorney General’s Office, United States Attorney’s Office, the Criminal Division of the Internal Revenue Service, the United States Postal Inspection Service, the Department of Securities, the Securities and Exchange Commission, the Federal Trade Commission and other important state agencies, as well as the Miami Dade Police Department, the United States Department of Agriculture, and numerous commercial and international forensic accounting firms, as well as many others. Founded in 1998 bySusan M. Deehan and Tim Deehan, AIT is dedicated to helping financial investigators make our country a safer place to live. AIT’s mission is to fight financial crime by delivering the technology and expert knowledge needed to detect, investigate and permanently dismantle the criminal organization. References are available on request. For
more information, visit www.aitcfis.com.

1. Manning, Margie, “Florida tallies the price of financial scams,” Tampa Bay Business Journal, January 15, 2015.
bizjournals.com/tampabay/news/2015/01/15/florida-tallies-the-price-of-financial-scams.html?s=print.

2. Manning, Margie, “Robbed without a gun: Tampa Bay is one of the nation’s hot spots for financial fraud,”
Tampa Bay Business Journal, February 27, 2015. bizjournals.com/􀀀tampabay/print-edition/2015/02/27/robbedwithout-
a-gun.html?􀀀ana=􀀀e_tbay_bn_exclusive&􀀀u=xTyE1t39UIS7iocn8mxlLcQfujP&t=1432257682.

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