January 2006 Fraud Terminology Topics
Tracking Dots, Fleece, Invigilate, Magha,
Revenge Fraud, Schumer Box, Honesty Box,
Straight from the Horse's Mouth, Sug, and Blute
 

Fraudsters aren't aware that a laser color printer
or photocopier prints a hidden code
on every document it produces.
 

Fraud In Other Words™
Professional Jargon and Uncensored Street Slang
by Larry C. Adams, CFE, CPA, CIA, CISA

 

Tracking Dots
On every document it produces, a laser color printer or photocopier prints this hidden code of yellow dots that identifies that machine. When the Braille-like pattern of this “forensic branding” is decoded, it reveals the manufacturer, printer serial number, and the date and time the document was printed. This built-in security feature can’t be disabled without destroying the machine, and it’s similar to an artificial watermark. The pattern of scattered yellow dots appears about every inch on a page, blending into the printed words and margins. On white paper, the tiny yellow dots (0.1 millimeter) are unseen by the naked eye. The tracking dots can be viewed with a magnifying glass or microscope (10x to 60x). For easier viewing, the yellow dots appear black when illuminated by a blue LED (light-emitting diode) flashlight, instead of white light. Most consumers and fraudsters aren’t aware of the hidden code, but government agencies are. For a criminal investigation, the printer manufacturers and dealers can link the serial numbers to shipping locations, customer invoices, or warranty registrations. KLPD (Korps landelijke politiediensten), the Dutch National Police Services Agency, uses the tracking dots to identify printers that make fake railway tickets in The Netherlands. The U.S. Secret Service uses the tracking dots to trace counterfeit currency and forged government documents. Some countries use the tracking dots to hunt for the makers of fake passports and identification cards. The yellow dots can be used to track corporate and personal documents as well. Researchers at Purdue University in Indiana use an alternate forensic technique. They use specialized software to detect “intrinsic signatures” comprised of slight variations in printed characters that distinguish one printer model from another.
“DocuColor Tracking Dot Decoding Guide,” Electronic Frontier Foundation, www.eff.org/Privacy/printers/docucolor, October 19, 2005.

 

Fleece
Removing or stealing fleece became a symbolic term for a swindle in the 16^th century. Today, it also refers to an overcharge, a rip off, a soaking, a waste of tax dollars, or a secret diversion of money for a different purpose. On television, NBC Nightly News exposes scams during its regular segment about “The Fleecing of America.” A buyer feels fleeced, or stripped bare, if he purchases goods or services at unreasonably high prices. A desperate seller feels he has been taken advantage of when he has to sell something for an unreasonably low price. Originally, the term referred to shearing a sheep so the wool was removed intact in one piece, and that valuable piece was known as a fleece. Fleecey-claiming and May-gathering were underworld terms for stealing sheep in the United Kingdom around 1889. Fleece jackets are sold by the ACFE Bookstore with a bit of tongue-in-cheek symbolism.
Jay Robert Nash, “Dictionary of Crime, Criminal Justice, Criminology, & Law Enforcement,” Paragon House, New York, 1992, page 133.
Image: http://www.bbc.co.uk/herefordandworcester/content/
image_galleries/3_counties_shearing_gallery_gallery.shtml?10

 

Invigilate
To keep a vigil. For a teacher, invigilate means to proctor or keep watch over people sitting for an examination, especially to prevent cheating. For a parent with children, it means to guard or keep an eye on. For a manager, it means to monitor or supervise closely. For a detective, invigilate means to observe and follow. Forensic accounting and investigative services like Eide Bailly LLP perform invigilations of bars and restaurants. The purpose of an invigilation is to increase the perception of detection during a specified week or month, and to provide the client’s employees with an opportunity to report any fraudulent activities. Invigilation is time-consuming and expensive, so it should only be performed after obtaining the client’s approval. The invigilators use overt and covert surveillance techniques, and interviews to assist in identifying employees who skim money and misallocate company assets. The investigators conspicuously watch employees handle cash, conduct surprise cash counts, reconcile “changes in inventory” to cash register tapes, monitor end-of-a-shift cash counts, and witness daily bank deposits. In the United Kingdom, revenue officers of the HM Revenue & Customs department (formerly Inland Revenue) visit a business and observe trading over a period of time, which is then compared to the normal trading pattern and revenue declared by the business before and after the invigilation period. The Scotch whisky industry cooperates with customs officers during invigilation exercises at warehouses used by suspected fraudsters, so there will be a major deterrent effect.
Thomas Buckoff, CFE, and James Clifton, “Exotic Embezzling: Investigating Off-Book Fraud Schemes,” The CPA Journal, September 2003, www.nysscpa.org/cpajournal/2003/0903/dept/d095603.htm.

 

Revenge Fraud
Revenge or vengeance consists of retaliation against a person or group in response to perceived wrongdoing. When provoked by an extremely callous or cruel boss, hate can be a powerful motivator for revenge fraud. An employee might try to “even the score” for being overworked, underpaid, overlooked for a promotion, or underappreciated. Job dissatisfaction, or the fear of losing a job, might pressure a disgruntled employee to scheme and steal. Perceived work-related pressures and resentment can be strong motivators to commit revenge fraud. If an employee diverts company income for his personal use, he might rationalize the act as “simply a way to right a wrong.”
Christopher Eiben, “It Pays To Be Paranoid: Securing Business Success by Preparing for the Worst,” Agate Publishing, Chicago, 2005, pages 133 and 134.

 

Schumer Box (Honesty Box)
A required table of disclosure information that is printed on all credit card solicitations and final credit card agreements. The Schumer box highlights important credit card terms and conditions in a clear and conspicuous manner for consumers, instead of burying them with fine print and difficult to understand legal phrasing. The intent of the Schumer Box is to make the conditions more obvious and easier to compare with other offers. The box is named after U.S. Senator Charles E. Schumer of New York, who wrote the provision in the U.S. Truth-in-Lending Act of 1988 (TILA). The box discloses the annual percentage rates (APRs) for interest on purchases, cash advances, and balance transfers; the method of computing the balance for purchases; any minimum finance charge; any annual fee, transaction fees, late fee, or over the credit-line fee; and the grace period for purchases. In 2001, the Federal Reserve Board’s Regulation Z required 18-point type for interest rates and 12-point type for other disclosures. The U.S. Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires Internet solicitations to include Schumer Box disclosures. After considerable criticism of misleading “a bait and a trap” marketing practices in the United Kingdom, the Association for Payment Clearing Services (APACS) and its member credit card issuers began providing an Honesty Box or Summary Box in 2004. The Honesty Box increases the transparency of the pricing for credit card rates and fees in solicitations. The Nationwide Building Society provides a similar Consumer Box. The U.K. Office of Fair Trading has new powers to enforce consumer credit laws.
"UK Credit Card Companies Bow to Government Pressure,” Credit Cards Magazine, September 16, 2003, www.creditcardsmagazine.com/
managearticle.asp?C=30&A=3304.
Image: http://www.creditcardguide.org/card-basics/fine-print.htm

 

Straight from the Horse’s Mouth
An idiom or expression that reminds investigators, auditors, managers, and consumers to get information directly from the person or place where it originated. Get the information from a reliable source or a person that can’t be doubted. The phrase was widely used by 1900, but it began at racetracks about 1830. A crooked horse trader will lie about the age of his horse to enter it in a race for bigger prize money, or to sell his horse for a higher price. Stabled horses appear younger than they are. However, a smart buyer knows an accurate way to determine the age is to get it straight from the horse’s mouth. Temporary “milk teeth” are all present at age one, and show signs of wear at age two. Permanent “center teeth” appear at age three that are larger, longer, and darker in color. Additional permanent teeth such as “intermediate teeth” appear at age four, and “corner teeth” appear at age five.
Wayne Loch and Melvin Bradley, “Determining Age of Horses by Their Teeth,” Department of Animal Sciences, University of Missouri-Columbia, 2000, www.horses-arizona.com/pages/articles/teeth.html.

 

Sug
British slang for an attempt by an unscrupulous salesman to sell products or services in person or by telephone while pretending to be engaged only in market research. Sug is an acronym for the phrase “to Sell Under the Guise of market research.”
Anne H. Soukhanov, “Word Watch: The Stories Behind the Words of Our Lives,” Henry Holt and Company, New York, 1995, pages 141 and 142.

 

Blute
Newspaper is used as two types of bait in a con game or a sting operation. To lure more suckers, fake newspaper clippings (blute) are used in promotional materials to praise a product, service, or stock, or the “prestige, wealth, and fame” of a con man. Blute also is a slang term for newspaper cut to the size of currency, and then used to replace genuine bills in the middle of a “currency strap.” A currency strap contains 100 notes wrapped in a colored paper band. Real bills remain as the “tops and bottoms” in each strap. The newspaper filler makes it look like the fraudster has more money in a briefcase than he actually does.
Tom Dalzell, “The Slang of Sin,” Merriam-Webster, Springfield, Massachusetts, 1998, page 257.

 

Larry C. Adams, CFE, CPA, CIA, CISA, teaches fraud examination at the Keller Graduate School of Management of DeVry University in Arizona. He publishes the book and online editions of “Fraud In Other Words.” His Web site is www.larry-adams.com. His e-mail address is fraudwritr@aol.com.

 

ã Copyright 2006 Larry C. Adams. All rights reserved.
“Fraud In Other Words” is a trademark of Larry C. Adams.
 

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