Fraud Prevention and Investigation Branch

1. Fraud Prevention and Investigation Branch

2. Fraud Prevention- Everyone’s Responsibility

3. Agenda Congressional Requirement & Agency Responsibility Reporting Fraud Cost of Fraud Good Stewardship Fraud Prevention Awareness & Detection

4. 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

5. 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

6. 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.

7. Cost of Fraud Monetary • Association of Certified Fraud Examiners (5%) • Government Accountability Office (5.5%) • Insurance Industry ($97B annually) • Less Funds and More Oversight

8. Cost of Fraud Non-Monetary • Bad Publicity • Congressional Hearings • Jeopardize Agency Reputation

9. Congressional Requirement Post Katrina Emergency Management Reform Act, 2006 (PKEMRA)

10. 6 USC 795 Fraud, Waste and Abuse Controls 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…

11. 6 USC 797 Fraud Prevention Training Program 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.

12. 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

13. Effective Fraud Prevention and Internal Controls • 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

14. Agency Responsibility FEMA Publication 1, Chapter 4 Guiding Principles The 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…

15. Fraud Prevention Program Design • Prevention • Analyze • Investigate • Prosecute • Recover Funds or Assets

16. Fraud Prevention • Training and Outreach (Internal and External for Partners) • Toolbox (Things to Remember) • Hotline and Email • Flyers and Brochures

17. Fraud Prevention • Awareness of Fraud Reduces Risk • Internal Controls, Filters, and Detection Devices • Report Fraud • Aggressive Recovery of Funds or Assets

18. Fraud Prevention • Examine closely external and internal programs, documentation, and activities for fraud indicators and filters. • Report all fraud or suspicions of fraud. • Do notrelease 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. • Maintaincooperative relationships with internal components, DHS OIG, law enforcement agencies and U.S. Attorney to facilitate FEMA fraud investigations and prosecution.

19. Case Studies

20. Program Fraud

21. Familiar Fraud False Claims False Documentation Untruthful on Application for Assistance Identity Theft

22. 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.