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Monday, April 15, 2024

HSToday Profile: National Center for Disaster Fraud Helps Survivors Targeted as Crime Victims

Every disaster leaves victims in its wake but sometimes that victimization can become even more troublesome and lingering long after floodwaters have receded, fires have been extinguished and the visible scenes of a disaster are cleared away. Fraud, identity theft, and other crimes that prey upon disaster victims are a sad but recurring ripple that can be found in multiple forms and places long after first responders have left the scene.

One of the people working to protect disaster victims is Brandon Fremin, the U.S. Attorney for Middle Louisiana and executive director of the National Center for Disaster Fraud (NCDF). Created in 2005 following the devastation to the Gulf Coast after hurricanes Katrina and Rita, the NCDF works with federal, state and local officials and regulatory agencies “to detect, prevent, investigate, and prosecute fraud related crimes related to natural and man-made disasters, and to advocate for the victims of such fraud.”

The native Louisianan, former Marine Corps platoon sergeant and career prosecutor is someone steeled for a job of this type. Focused on looking out for the little guy who is often preyed upon by fraudsters and criminals of all types – especially when they are at their most vulnerable – Fremin directs a team of nearly 100 attorneys, investigators and support personnel with a nationwide and international reach. With most fraud and criminal case tips coming into the NCDF via a 24-hour hotline (1-866-720-5721) and email ([email protected]), Fremin and his team act as a clearinghouse and coordinator for the Justice Department’s efforts to stop these crimes from occurring, and prosecuting those who commit them.

HSToday’s Editor at Large Rich Cooper had the opportunity to interview Fremin from his office in Baton Rouge, La.

HSToday: How big is the fraud problem during disasters?

Fremin: Unfortunately, it can be huge. Frankly, the allegations of fraud vary from disaster from disaster. Oftentimes there is a common theme, that the larger the disaster in terms of number of potential of victims than we expect that there may be a larger number of fraud allegations. It’s pretty simple. Frankly, the larger the number of targets, the larger or the grander we expect those allegations to be in terms of number. But in terms of percentages, I don’t know if there’s any way for us to predict. Just for example, the hurricane that struck Hawaii, they are obviously limited in population. If you know a hurricane strikes the Gulf Coast and makes landfall in Texas in the Greater Houston area, there’s no real way for us to quantify with percentage of how great the disaster will be in terms of the number of complaints generated, but we can speculate that because there’s a larger population that there will be a more widespread fraud effort.

HSToday: How did the NCDF get started? What were the drivers to its creation?

Fremin: Back in 2005, when Hurricane Katrina struck the United States Gulf Coast, billions of dollars in damages occurred. As a result, the Hurricane Katrina Task Force was formed, locally here in Louisiana. The U.S. Department of Justice established the National Center for Disaster Fraud, what we commonly refer to as NCDF. It was originally established to support the Hurricane Katrina Task Force, but it later expanded its mission to become the national coordinating agency for reports on fraud, essentially related to all man-made and natural disasters.

So there is a partnership there between the U.S. Department of Justice and various law enforcement and regulatory agencies. The goal is to improve and advance the detection, prevention and investigation and, if necessary, prosecution of fraud-related matters in the natural and man-made disasters. But it’s also important to know what we don’t do. The center itself does not prosecute criminal matters or serve as the primary investigative agency, but they do operate a call center, and that’s open 24 hours, 7 days a week to take fraud complaints to a national hotline, via email, fax, and any other method that we can receive the complaint. Then we review first and refer those complaints, as appropriate, to whichever federal, state, or local agency in the relevant jurisdiction that may be best suited to handle the complaint.

HSToday: So NCDF works as a clearing house?

Fremin: That’s exactly what it does. And in doing so, one of the most important functions that we have is identifying national trends and those types of schemes and offenders that operate across multi-jurisdictional areas. So, if there’s a larger event – just use Hurricane Katrina, for example, which affected many states – you may have operators, contractors or others operating in several areas or states. If those victims of fraudulent activity perpetrated by that particular contractor are notifying the local authorities and many jurisdictions, then you may be left with potentially several smaller cases. If every one of those complaints has been run through the NCDF, then we would notice a trend and we could then perhaps build a larger-scale, and hopefully stronger, case across jurisdictional lines and then, obviously, send a stronger message. For me that’s one of the most important functions of the NCDF.

HSToday: So the Hawaii flooding disasters occurred just over a week ago, and the center was already trying to mitigate against persons who may be conducting such fraud?

Fremin: The center will do whatever we can to try to mitigate the fraud that is, unfortunately, certain to follow. And it always follows the money when the federal funding and state funding is applicable – when that’s made available, then the fraudsters generally show themselves.

US Attorney Brandon Fremin Justice Department photo

HSToday: Can you describe these actors for us, these fraudsters, where they come from? Are these primarily domestic, are these international? Talk about what these fraudsters are like.

Fremin: It can be both, certainly. It varies from sort of a grass-roots effort by fraudulent contractors to internet predators. We’ve seen both; we’ve seen it run the gamut.

HSToday: Who are your biggest partners in addressing and mitigating this issue?

Fremin: We work very closely with the U.S. Secret Service, with the FBI, with the DHS OIG. They are probably our biggest partners, but certainly not our only partners. We have many federal, state, local agencies that work with us to combat fraud, particularly because of the proximity of the call center, which is located in Baton Rouge, La. We’ve got a lot of local partners here, who are willing to pitch in.

HSToday: When you talk about all these calls coming into the center and the various trends, are you using technology to identify these trends? Are you using data and analytics?

Fremin: We do. As I said, we received tips via various forms, email, fax, calls. All of those complaints are funneled into a database that allow us to track many, many things, like the volume of complaints and types of the complaints, which are important. Also very important is we can use technology to map and store the location of the fraud, which as I said earlier leads to us identifying the multi-jurisdictional trends and perpetrators.

HSToday: One of the challenges in any law enforcement agency is always getting access and coordinating data and information sharing. Is the NCDF meant to navigate some of that information sharing so it can be a comprehensive clearing house?

Fremin: That’s the goal. By using the information that we upload into the database, the center can best determine which jurisdiction, or which entity is best suited to prosecute, or rather investigate and perhaps prosecute those types of cases. If we notice, for example, the complaint looks more like public assistance fraud than it does contractor fraud, well, then that’s obviously the federal government which will have an interest in it. We would be interested in sending those details over to a federal agency rather than sending it to a state agency for a potential contracting fraud.

HSToday: How does identity theft play into these actions?

Fremin: So that’s a big one. I think identity theft is probably the biggest problem we’ve seen. Most of those complaints we receive have, in some way, connection to identity theft. That’s as simple as a perpetrator stealing sensitive information and using that as an opportunity to do fraud to an unsuspecting victim, who, as you know, during an aftermath of any major event, that’s when folks are at their most vulnerable. That’s why it’s so despicable.

HSToday: It is, because people are being victimized all over again. They are already on the ropes, and the fraudsters are kicking them further down and makes climbing off those ropes even harder.

Fremin: They are under water, literally. This happened in South Louisiana two years ago. There was historic flooding in August 2016, and for several weeks thousands of people had several feet of water in their homes and as soon as the money started coming in, we noticed the complaints followed quickly. 

HSToday: You’ve been a local prosecutor, you’ve been a state prosecutor, and now you’re a federal prosecutor. You obviously can speak a lot of different languages and jurisdictions in all of this. What is the new spark that you were bringing to the center? We’re looking at 13 years after Katrina, and Hurricane Rita and all of that destruction. What are the things you are bringing to make the center even stronger in doing its job?

Fremin: On a local level, it’s communication, and that for me is the common theme among all the languages that we may speak. Fortunately, because of my background with different agencies, in prosecuting cases in my entire career I’m pretty well tied into the law enforcement community. So those relationships are there. Those relationships have helped us to spread the message nationally as well. Our Louisiana attorney general recently became the president of the National Association of Attorneys General, so we are using that as an opportunity to connect with other AGs around the country. The Louisiana AG has agreed to make disaster fraud and other mass catastrophic event support an initiative during his time as president of that association. That will include the NCDF having a liaison from every state attorney general’s office throughout the country.

So that was one of my first goals as the center’s director: to figure out a way to better spread the message of NCDF so that long before disaster strikes the folks that are most affected, which are the individuals who own homes and businesses, can at least have some awareness of the center and know that they can call us first and have an opportunity to have that complaint heard, deconflicted and routed to the most appropriate agency.

HSToday: Louisiana certainly has its share of disasters. You talked about the flooding a few years ago. Obviously there is Katrina and Rita, the BP oil spill and other types of events have occurred there. Is Louisiana the state that seems to have the most occurrences of disaster fraud, or is there another state that seems to unfortunately have the distinction of being the number one state for that problem?

Fremin: I think the data would speak for itself based on the storms and when those events occur. You are obviously going to see a spike of complaints after an event. Hopefully we won’t have a huge rise in complaints coming from Hawaii or the West Coast after the wild fires. I would expect to see spikes in those numbers, just after the events themselves. In terms of hard data, in terms of which state, sort of leads, if you will, in the number of complaints, I don’t have that information before me.

But in terms of costs, I will tell you this: If it costs one retiree the roof of his home, then it’s too much money. And it happens all too often.   

HSToday: Who’s the partner you don’t have working with you and the Department of Justice that you’d really like to have by your side in this fight?

Fremin: Wow, that’s a great question. You know, I can’t think of any. I’m assuming you are talking about law enforcement partners. I can’t think of anyone that we don’t already partner with. That’s one thing I can say definitively. We don’t have a partnership problem. Dependent on the nature and the location of the disasters in the future, we would like to establish and we will establish contact with the agencies who we believe should have a representative, and that goes to the initiative that we started with the Louisiana attorney general, through the National Association of Attorney Generals, to touch every state, or at latest give every state an opportunity to provide a point of contact or liaison for us.

But partnership isn’t a problem for us in the law enforcement community. Quite frankly, the biggest partnership that we can have, I think, is with the American people, to let them know that they, too, play a role and they are really front line. They understand that if they see fraud occur, or what they believe to be fraud occurring, they can pick up the phone and call the center. That’s one of the quickest ways to get the law enforcement engaged.

HSToday: Is there a typical fraud case? What does that look like?

Fremin: I’d say that the identity theft that we talked about earlier is probably in that category. The theft of personal identifying information or financial information for either real time or later use is the big one. I know I can speak locally here in Louisiana, one of the things we will see and often is referred to the state for investigation and prosecution, but it’s sort of the contractor fraud, in this application of contractor’s payments and things of that nature. I tell you those two are probably right up there.

HSToday: Contractor fraud is obviously they’ve either not done the work they were contracted to do and done the work so poorly that whatever the job was, they didn’t do it right. Or they just literally took the money and run away with it. Would that be an apt description of what contractor fraud would be?

Fremin: Those are probably two of the most common themes we see in contractor fraud. They either don’t complete the work or, like you said, they just take the money and run.

HSToday: What’s the prosecution rate for cases like this? How many of these cases end up in arrests and trials, or fines or jail time? Do you have any stats you can share?

Fremin: You know, that’s a tough one because with any criminal complaint, not just in the fraud arena, the prosecution rates are going to depend on many factors that are almost always case-specific. But with respect to certain jurisdictions and their prosecution rate for these types of cases, those are probably questions left best answered by the agencies, because the NCDF refers the investigation to the investigative body most appropriately suited for that set of facts and if an investigation leads to an arrest and prosecution, then it goes to the jurisdiction in which the matter occurred, based on the nature of the investigation, which could be local, state or federal.

HSToday: Can you give me a description of the typical perpetrator that you are looking at here: who they are, what they do, what skills they have? What’s an MO on them?

Fremin: You know, that’s a good question too. That can be as simple as a blue collar, contractor, whether he or she is licensed or not. It can be as simple as a guy with a pickup truck, who tries to perpetrate contractor fraud on an unsuspecting victim. Or it could be as complicated as a criminal organization operating in or outside the United States trying to do one of those mass identity frauds. We’ve seen both.

So it’s really hard to sort of pin down what a typical perpetrator looks like, which is why, quite frankly, it’s sort of slippery when it comes to victims …oftentimes these folks tell their victims that they are legitimate contractors or members of the government, working on behalf of FEMA or some other government agency at times. It’s up to the individuals to determine whether they trust the veracity of what these folks are telling them.

I can tell you that recently, just locally here [in Louisiana] we’ve had a problem with burglary. It’s not fraud related, but what they are doing is they are going into homes of elderly people, passing themselves off as contractors who previously did work on the victims’ home during the flood and ask if they can come inside and check their work for inspection. And being allowed inside, they are physically taking things from a home. They work in teams. This is not an NCDF issue, but local authorities are looking at that. It could be as simple as that. We are aware that it’s out there, and we are looking at all of it.

HSToday: What advice do you have for individuals and businesses to protect themselves from fraud? Obviously if they suspect something, they should call the hotline that the center has but how to they protect themselves from this ever occurring?

Fremin: So individuals need to be extremely cautious about giving away personal identifying information to strangers, particularly when it’s unsolicited contact and even more so when it’s followed by a disaster, natural or man-made. As I said earlier, when the money begins to flow, that’s when the fraudsters show up. So if someone appears before an individual, a homeowner, and claims that they are a federal government official, or a state government official, it’s always prudent for that person to ask to see some identification.

They should also know that government workers – federal, state, local – would never ask them for money, and would not ask them to sign contracts. I’ve seen situations in which people are asked to sign contracts with blanks left unfilled, obviously a terrible idea.

In terms of businesses, they should make sure they have security measures in place for the protection of sensitive data, particularly financial information. Always seek measures to improve those controls because as I said, hackers and others are constantly trying to figure out how to access that information.

HSToday: How do you train the center team to be always on the lookout for these new trends? You talked about data and analytics and some technology before, but how are you training your people to look for the next sort of creative con job?

Fremin: That goes back to one of your questions earlier, and for me that’s the partnerships. An NCDF analyst may not have a deep background in financial investigations, but it’s great that we are working with partners that do. We can always pick up the phone and call our partners at the IRS Criminal Investigation, or the Secret Service or the FBI and find out what trends they are seeing. And, unfortunately, if we see some overlap then we can use that information to better identify the trends that come through the center. So, I think it comes back to the partnerships. We are only a phone call or an email away from experts in any area or any field that may cross the path of NCDF.

HSToday: The Gulf Coast has been hit hard over the past two decades, between the hurricanes, the oil spill, the floods of two years ago. How is the work the center is doing and the U.S. Attorney’s office you lead helping the community to be better prepared for these natural or man-made types of disasters? How are you making that community more resilient and more prepared?

Fremin: The first, as I said earlier, for me, is communication. The more people out there who know about the center, and what we and our partners in law enforcement can do, the better we are as a community and the safer we are.

The NCDF does its level-best to identify the fraudulent conduct via our messaging. When potential victims hear our message, we are hopeful that potential fraudsters hear it, too. That and allowing disaster funds to be put in the hands of the right people is what we strive for.

On a local level, state offices relating to disaster assistance, they frequently distribute disaster funds to assist those and make those residences more resilient to damage in hopes of reducing damage to those caused by prior disasters.

For me, like I said, messaging is incredibly important. The more people know, the better armed they are with that information, the more likely is that we can deter some of that future behavior.

HSToday: What’s been your toughest case in combating disaster fraud?

Fremin: I’d say that it’s probably those technologically advanced perpetrators who are smart –  they work clandestinely, and it makes them difficult to track. The internet fraudsters are generally more difficult to track down and to deal with because oftentimes you are dealing with transnational organizations, not the guy in a pickup truck who tried to defraud a homeowner because he didn’t do a good job with the roof. So, I’d say the more savvy technological perpetrators.

HSToday: What’s been your proudest accomplishment with the center?

Fremin: I’m six months into this position. I’d say, right now, we are on track to meet the goals that I set forth in the short term, and that is to increase messaging. It was very important for me because of my experience here in the past two years prior to taking this post, with the floods that devastated South Louisiana two years ago. It was very important to me to get the message out.

I think that was one of our short- and long-term goals, and we are meeting those goals in just the first few months. As I have said, we have made the connection with the National Association of Attorneys General, and via their president we’ve reached every state in the nation. And, of course, through the Criminal Division at the U.S. Department of Justice, we are working our way to spread the message even further. I’m very proud of that.

HSToday: How did your time in the Marine Corps prepare you for this job?

Fremin: That’s a good one. There’s no challenge that we can’t meet. We don’t shy away from problems; we only search for solutions. There’s no challenge too big. That’s about as good as I can put it.

HSToday: Is there a particular piece of technology that you are looking for that the center could have to do its job? Is that predictive analytics, is that data mining? What would that particular technology be, and what would really help your team members in their job?

Fremin: Once we have our database, and the database is in place, once we have the information in the database, I think I’ve always been interested in data mining and I wonder if that would help us in our cause here at the NCDF. Most of what we do, obviously, is reactive. We receive the complaint and we forward it on, but I’m curious whether data mining would be something that could assist and hopefully predict future behavior and identifying those trends.

As I said earlier, the center is quite good in its current system of identifying national and multi-jurisdictional trends and perpetrators. I think we are quite in good shape in terms of technology but obviously it’s always evolving, so we have to evolve to meet those needs as well.

author avatar
Rich Cooper
Rich Cooper is Editor-at-Large for HSToday. A former senior member of DHS’ Private Sector Office (PSO), Cooper has been a frequent writer and contributor to numerous media outlets. He is Vice President for Strategic Communications & Outreach for the Space Foundation and a Principal with Catalyst Partners, LLC. Cooper is also a former Senior Fellow with GWU’s Cyber and Homeland Security Institute and has also served in senior positions at NASA, the US Chamber of Commerce Foundation, SAS and several other profit and not-for-profit enterprises.
Rich Cooper
Rich Cooper
Rich Cooper is Editor-at-Large for HSToday. A former senior member of DHS’ Private Sector Office (PSO), Cooper has been a frequent writer and contributor to numerous media outlets. He is Vice President for Strategic Communications & Outreach for the Space Foundation and a Principal with Catalyst Partners, LLC. Cooper is also a former Senior Fellow with GWU’s Cyber and Homeland Security Institute and has also served in senior positions at NASA, the US Chamber of Commerce Foundation, SAS and several other profit and not-for-profit enterprises.

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