Tag: COVID 19 fraud

The COVID-19 Fraud Storm Continues…

When we think of fraud due to the COVID-19 pandemic, we think of individual people committing fraud. After all we are only too familiar with workman’s comp insurance scams & most recently, employee fraud. We have discussed in a previous blog post how one Fortune 500 company had a loss of over $100,000.00 after an employee falsely said they were tested positive for COVID-19.

The story now continues with business fraud. Small businesses across the country have been nearly put out of business due COVID-19. Many have been able to stay afloat from government PPP funding. However, some are sadly starting to take matters into their own hands.

What the Experts Predict

Data analytics provider Verisk has alerted folks that COVID has created opportunities to commit medical billing fraud and abuse. In April, the company said its data reported a 14% increase in claims linked to suspicious billing practices.

Verisk said its Insurance Service Office MedSentry team has identified several COVID-19 medical billing schemes. Among them:

  • Unlisted lab tests. There was no specific ICD-10 code for COVID-19 until April 1. Prior to then any COVID-19 tests were likely coded as “unlisted laboratory tests.” Claims for a patient who has received both an unlisted laboratory test and a COVID-19 test may be cause for scrutiny.
  • Hands-on therapy charges. Many providers eliminated in-office visits and began to offer telehealth sessions. Verisk said bills for hands-on therapies such as chiropractors, physical therapists, and massage therapists should be examined.
  • Unnecessary durable medical equipment. Insurers should be wary of misleading claims for gloves, face masks, thermometers, and similar items, especially for patients who have not been tested for COVID-19 or have tested negative, Verisk said.

Social Media Monitoring

Work is being done to create a software that allows the user to find unapparent connections between all people in a claim to uncover potential scams. While it has a way to go in development, if created, it would be an excellent resource to help investigators identify potential scams and link the culprits.

Google Search – Trending

Google searches can be very revealing and a good indicator of what people are thinking of doing. The question, “How to Burn a Car” has increased 125% since January of this year.

setting car on fire

Not surprising, Google is showing some strong trending in Employment Fraud. The graph below shows Google trends over the last 90 days.

We will continue to report our findings during the pandemic.

Employee Ethics & Fraud During COVID-19

Back in April we wrote about fraud predictions during the COVID 19 pandemic. Back then most of what was out there was PPE (Personal Protective Equipment) fraud. We saw a lot of fakes and it even began to show up in COVID testing. Much of this was controlled by the FDA who provided consumers with updated information on their website on a regular basis.

Once the government released stimulus checks, the scams began. Scammers were contacting people through email, telling them that their check, as part of the stimulus package responding to COVID-19, is already waiting for them and that all they need to do is to provide personal information. This included bank account numbers and Social Security Numbers, which are the key pieces of information needed to perpetrate identity theft.

 Bruce Dorris, J.D, CFE, CPA, President and CEO of the Association of Certified Fraud Examiners, explains that in the current conditions, we can expect to see a number of long-lasting implications. One important one being an explosion of fraud in the coming years — and organizations need to brace themselves.

Corporate Employee Misconduct

Some of our corporate associates have expressed concern with what lies ahead as they navigate the uncertain waters of the Pandemic. One company in particular needed to shut down an entire plant because an employee tested positive for COVID. The employee presented the company with a falsified COVID 19 medical claim. He went as far to provide an excuse letter from a medical facility appearing to corroborate the test results. In concern for its employees and customers, the company closed its facility for cleaning and paid its employees during the shutdown. This caused a loss in excess of $100,000 to the corporation and the unnecessary quarantine of several of the defendant’s coworkers. He is now released on $15,000.00 bail awaiting trial.

FBI Recommendations

The FBI has recommended that companies be particularly alert during the pandemic about possible fraudulent work excuse letters, as they are finding more people attempting to exploit the situation for personal or financial gain.  Submission of a medical claim proven to be false could lead to criminal penalties, including fines or imprisonment by U.S. federal and other authorities.

What This Will Mean for the Private Investigator

Investigation around employee misconduct is an area that could prove to be quite lucrative for investigators. ABC News in Phoenix, AZ did a story on how local investigators are getting calls from corporations to check up on employees who should be working from home. This is not an isolated incident.

I believe we will see more and more fraud cases such as this over the next year if not longer.