The DOJ uses a proactive, data-driven approach to identify misconduct and start investigations into cases of financial fraud. Keep reading to learn more.
The Department of Justice and Data Analytics
The U.S. The Department of Justice (DOJ) has changed its approach to prosecuting financial fraud cases. The old way of waiting until a crime occurs, then initiating an investigation and finally a prosecution is gone. Keeping a data-driven eye on corporations allows the DOJ to identify patterns of corruption and wrong-doings in real time leading to faster investigations and swifter prosecutions. The hope is that the threat of surveillance and data-mining also decreases the likelihood of fraud.
Financial fraud has become increasingly complex in the digital age, therefore the tools to combat it must also be increasingly complex. The DOJ uses a mix of advanced technology, specialized task forces, and legislative tools to find and prosecute financial fraud crimes. There are a number of key platforms and data analytic tools that the DOJ uses for oversight. Some of these include:
- Network Analysis (Graph Databases): The Department of Justice uses graph analytics to map relationships between individuals, corporations, bank accounts, and transactions to identify money laundering, offshore shell company usage, and other fraud networks. Advantages of this type of analysis include real time detection, improved precision in identifying malicious behavior, and the ability to scan databases for emerging patterns.
- AI and Machine Learning: Detecting AI generated fraudulent documents and monitoring algorithms in corporate settings can be done by the DOJ using AI. This tactic has been used in the healthcare industry to check for overbilling. This type of analytic tool is also used in banking and fintech to detect account takeovers and identify fraudulent credit card transactions.
- Securities and Commodities Fraud Monitoring: The DOJ analyzes trading data to find instances of market manipulation by looking at trading patterns that differ from normal market behavior.
- Commercial Data Sources: The Pandemic Response Accountability Committee (PRAC) uses over 60 different data sources, including non-public and commercial records, to build a “data pool” for identifying potential fraud.
- Cross-Agency Data Matching: The DOJ works with agencies like the FBI, DEA, and the Department of Health and Human Services to compare data across different systems, helping to identify fraud in federal funding, pandemic relief, and other programs.
These are only a handful of the tactics and tools used by the DOJ to uncover financial fraud. These methods are constantly evolving just as ways to commit fraud are always changing and becoming more advanced.
The Importance of Data Analytics
The DOJ started improving and implementing data analytics in investigating fraud not only because the digital age required it, but also because data analytics are trusted and can be used in building evidence for prosecution. Data analytics represent hard facts that go a long way in proving a crime has occurred.
Financial crimes require prosecutors to show complex patterns of activity and to be able to explain them to a jury. The ability to take a massive amount of information found through data analytics and condense it down to graphs, charts, and other easily accessible and understandable visualizations is very important to proving a case of fraud.
Data analytics also allow law enforcement agencies to get involved sooner in an investigation and prosecution. This means that the fraud has a shorter amount of time to occur and thus cannot be as damaging as if it went undetected for a longer period of time.
One other advantage of the DOJ using data analytics to uncover financial fraud is that it encourages corporations to use the same tools and self-disclose if they find an issue. By doing this, corporations can receive less severe penalties under the law.
It is crucial for the Department of Justice to use data analytics in its detection of financial fraud because it increases efficiency, allows for a lot of information to be investigated at once, and empowers the DOJ to target its investigations to those who are committing the crimes.
Being the Target of an Investigation
While all of the data analytics used to uncover fraud is positive, it is not good if you end up being on the wrong side of the investigation. If data analytics have uncovered fraud that you are connected with, you need to secure the assistance of a qualified, experienced legal professional. The legal team at the Law Offices of Robert J. DeGroot is ready to help with decades of experience and unrivaled knowledge of the law.
Reach out to the Law Offices of Robert J. DeGroot today!
