VULNERABILITY ALERT: New Disability Fraud Trend

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Announcing VULNERABILITY ALERTS

This is the first of our Fraud of the Day “Vulnerability Alerts,” bringing new trends in government fraud to our subscribers.

According to the state of California Employment Development Department (EDD), which oversees claims for both unemployment and disability benefits, there has been a sudden rise in the filing of false disability insurance claims. Criminals are using the stolen identities of individuals and medical and health providers to obtain EDD benefits. (California has suspended 345,000 fraudulent disability claims related to the scam so far.)

In this latest, more complex fraud, scammers have moved on to impersonating doctors to collect disability checks. (The credentials for 27,000 doctors were used to file disability claims for purported patients.) This two-pronged attack potentially impairs the entire healthcare system’s ability to provide timely care and prevents the legitimately disabled from getting the benefits they need.

This new fraud differs from traditional disability fraud in that the fraudsters have stolen the identity of doctors and care providers to then certify fraudulent disability claims. Generally, neither the true recipient nor the real doctor had any idea their information was being monetized by organized criminal groups.

States are currently using various methods to verify the identity of the doctors. Most likely an email is sent from an official government account to the doctor referenced on the claim. The request asks the doctor to verify their identity. Once the doctors verify their identity, the claim is considered legitimate, and the beneficiary receives their disability check.

As in any identity theft scenario, fraudsters must use the stolen identity from a different device and location than the legitimate owner of the credentials. Seamless solutions that provide nearly instantaneous device assessment and ID verification are available and easy to implement.

If you would like to learn more about how to prevent this emerging threat from impacting your agency, click here. In addition to providing the latest news stories and trends in fraud, Fraud of the Day, brought to you by LexisNexis Risk Solutions, is proud to introduce to our followers the Vulnerability Alert, which will help increase awareness of critical fraud trends that are emerging in federal and state programs. You can count on us to keep you apprised of the latest fraudulent scams to look out for and provide solutions to protect you from becoming a victim of disability fraud and provider identity theft.)

*** To learn more about how we can help address your disability fraud challenges and to keep up with evolving fraud threats, check out our Fraud Detection and Prevention solutions. ***

Today’s Fraud of the Day comes from an article, “California suspends 345,000 disability claims, citing fraud,” published by KTLA.com on January 13, 2022.

After stealing the identities of death row inmates and even a sitting U.S. senator to make off with billions of dollars in fraudulent unemployment benefits during the pandemic, scammers have now moved on to impersonating doctors to dupe California officials into giving them disability checks.

State officials on Monday said they had suspended 345,000 disability claims while they worked to verify the identity of about 27,000 doctors whose credentials were used to file disability claims for purported patients.

 

 

 

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.