Insider Collusion
By Mike Betron, Infoglide Software Director of Marketing
Stories about financial services fraud are on the rise. Consider the recent article about an employee of a financial services company who had charges filed against him for conspiring to rig bids for investments in municipal bond projects:
“According to court documents: [Mark] Zaino engaged in a bid-rigging conspiracy from at least as early as October 2001 until March 2006. As a part of the bid-rigging conspiracy, Zaino, acting as a broker of investment agreements, and co-conspirator providers designated in advance which co-conspirator provider would be the winning bidder for certain investment agreements brokered by Zaino’s employer. After the winning co-conspirator provider was designated, Zaino caused the other co-conspirator providers to submit intentionally losing bids, giving the false appearance that the investment agreements had been bid competitively in accordance with relevant Treasury regulations.”
If you’re familiar with the capabilities of identity resolution, this is a classic case of uncovering hidden entity relationships. Warning signs about Zaino’s alleged relationships with several providers were almost certainly available. Connecting the right set of disparate databases and using similarity searching and transitive matching would have certainly turned up Zaino’s connections to his alleged co-conspirators.
We’ve been involved in detecting insider trading, a similar type of fraud. In writing about available data sources, we said that “besides lists that individuals put together and post on the web, public and private databases offer all sorts of information on people that are useful in addressing multiple types of business problems and opportunities,” and we went on to list a few.
In addition to these types of data, financial institutions have their own massive data sets derived from operations. Combining their internal data with easily obtainable external public and private source offers opportunities to avoid the kind of bad publicity associated with that lead story above.
It all begs the question: Why aren’t more organizations protecting themselves with commercial due diligence systems using identity resolution?
