Data Mining and Social Network Analysis Identifies Welfare Fraud

California’s Contra Costa county has implemented a new “data-mining” system that warns authorities of possible welfare fraud so authorities can catch individuals and groups before they steal large sums of money from the government.

The new data mining system is designed to stop public assistance cheats and help prosecutors with fraud investigations.

In a recent test of the new data mining program, the county claims to have had a 85 percent success rate in finding public assistance fraud rings.

Last week Contra Costa county approved the data mining system for detecting child care, IHSS and other welfare cheats.

The new system can find hidden patterns called “red flags” in public assistance applications, IHSS documents and food stamp reports to find people who receive duplicate welfare benefits.

The data mining system can locate suspicious identifiers, like unusually long distances between job and home addresses of applicants and strange statistics in data and relationships among various people who are involved in activities that have been flagged by the system.

County officials agreed to study “data mining” systems in 2007 after reports were published that showed chronic fraud in federal, state and local public assistance programs by criminal enterprises.

Professionals estimate that around $300 billion is lost to public assistance fraud in the US annually – and half of that is believed to be stolen by organized crime groups.

In 2007, the county’s civil grand jury estimated child-care fraud costs county taxpayers $500 million annually.

The data mining system will assign a numerical score to all welfare recipients that will alert investigators about suspicious people.

The system will use activities and characteristics of past welfare cheats to create a computer model that assigns a “risk score” to help identify new cheats.

The new data mining system also has an advanced option called “social network analysis”. Social network analysis helps investigators see relationships between people and assistance providers to create a relationship picture of suspicious people, associations, groups and behaviors.

[ Source: Contra Costa Times ]