Fraud in the News

Unfortunately, there are new cases involving fraud almost every day.  In fact, if you Google “Fraud in the News” and go the actual news stories, you’ll find an astounding 176,000,000 results.  While it is obviously not possible to look at all of those stories, I thought it would be worthwhile to briefly discuss three cases I found interesting.  As you will see, it is a reminder of fraud’s broad reach across many facets of our society.

Instagram Influencer Fraud

According to influencer marketing measurement firm Instascreener, fake engagement on Instagram is on the rise again.  For us less tech-savvy folks (myself included), what does that mean?  Well, in 2019, companies spent $1.9 billion on influencer marketing in the U.S. and Canada, with $1.4 billion being spent on Instragram influencers alone.  That is, paying popular Instagram users (influencers) to promote or use a company’s products or services in posts. 

However, some of these Instagram accounts have fake followers and have even identified ways to demonstrate fake engagement (i.e., interaction with the accounts via likes, comments, etc.).  This makes it difficult for marketers to be sure that their $1.4 billion in spending is reaching real consumers – Instascreener indicated as much as $255 million was spent on Instagram accounts with fake followers.  Imagine if Fox were able to inflate the number of viewers for the Super Bowl to convince companies to pay more for its ads?

While I’m sure all of that is disheartening, I can recommend one Instagram account that is not being paid for its posts: https://www.instagram.com/schneider_downs/.  If you see the latest pocket protector, Ticonderoga© #2 pencil, or Swingline© stapler in any of those posts, you can rest assured it is because the folks in those pictures actually use them and are not recruiting fake followers to our highly influential Instagram page to sell these products. 

BigRobStyle

Robert Gorodetsky, known as “BigRobStyle” on social media, was recently charged with fraud for allegedly stealing $9.6 million from one victim.  According to prosecutors, Mr. Gorodetsky promised significant returns on the $9.6 million, but lied about how he would use the money and then lied about the actual returns.  Instead, the money was allegedly spent on living, travel, and entertainment expenses.

Mr. Gorodetsky had been previously profiled by USA Today regarding his “unique” sports gambling, which apparently involved his gut more than any specific analysis and making massive $100,000 bets (even betting $1.5 million in a single day).

Reading this story reminded me that wealth management should probably not be done with someone who is known as “BigRobStyle.”  Rather, I suggest working with a wealth manager who is a Registered Investment Advisor (RIA) with the SEC and who has a fiduciary duty to act in the best interest of his or her clients (https://www.sdwealthmanagement.com/).

Hoverboarding Dentist 

Seth Lookhart, an Anchorage, Alaska dentist, was recently found guilty of “unlawful dental acts,” reckless endangerment, and Medicaid fraud.  What constitutes an unlawful dental act?  Dr. Lookhart performed a dental procedure on a sedated patient while riding a hoverboard and, of course, videotaped it and sent the video to friends.

The hoverboarding video apparently led to additional scrutiny, and investigators also found that he committed Medicare fraud by needlessly sedating patients and charging Medicaid $10,000 for the procedures.

What to make of this?  Well, be on the lookout for any hoverboards on your next trip to the dentist.  And if you find one, should you worry that the dentist is committing Medicaid fraud?  Is there a correlation between hoverboard riding dentists and fraud?  Causation?  For now, the sample size is way too small (thank goodness) to make any conclusion, but I’m sure if any statistically valid trends start popping up, Schneider Downs’ analytics team will be all over it (https://schneiderdowns.com/data-analytics).

If you need assistance with assessing or responding to fraud within your organization, please contact us at contactsd@schneiderdowns.com. For similar articles, visit Schneider Downs’ Our Thoughts On blog. 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

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