July 2006 Fraud Terminology Topics
Ambidexter, Nixie, Warm Card,
Dialed Number Recorder (DNR), Shock Time,
Play Fast and Loose, and Office Creeper
 

Less than two percent of stolen laptop computers are ever recovered. Over 600,000 laptops were stolen in 2004. The estimated loss of proprietary information was US$5.4 billion.
 

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

 

Shock Time
A brief period of time when a person is confined in a jail or prison. A judge might order a nonviolent first-time offender to serve some discretionary shock time as part of a split sentence. The intent is to make the offender aware of the harsh reality of confinement. The shock time usually is served within six months after the original sentencing date. Other parts of a split sentence might include probation, electronic monitoring, restitution, or community service. The offender is warned that if probation terms are violated, the offender will be returned to prison. A clinical social worker in Missouri plead guilty to Medicaid fraud for billing more than 24 hours of service per day, billing for patients he never counseled, and billing for services to patients who weren’t even in the area. He was sentenced to serve 21 days shock time, pay restitution of US$100,000, serve five years probation, forfeit his clinical social worker license forever, and banned as an enrolled Medicaid provider. In another Missouri case, 150 victims lost US$8.7 million in investments. The retired insurance agent who illegally sold the investments to the victims was ordered to serve 120 days shock time, serve five years probation, and ordered to pay the victims 10 percent of his future retirement checks. Some jurisdictions use shock time as a method of decreasing long term overcrowding in prisons and reducing future incarceration costs. Juvenile offenders might be sentenced to shock time in a specialized boot camp. Shock time also is known as “shock probation” or “shock incarceration.” In the military, shock incarceration may last three to six months. A military offender is subjected to strict discipline, physical exercise, and hard labor.
Bryan A. Garner, “Black’s Law Dictionary, Eighth Edition,” Thomson West, St. Paul, Minnesota, 2004, pages 195, 775, 1249, and 1394.

 

Ambidexter
A juror who accepts bribes from both the plaintiff and the defendant in exchange for his verdict on a case. According to the Latin writ of “decies tantum,” a juror found guilty of taking any bribe had to forfeit 10 times as much as he received. The “embracer” who gave the bribe also forfeited 10 times the amount of the bribe and was imprisoned for one year for instigating the corruption. In Great Britain during the 18th century, the Crown received half of the forfeited amount and everyone who sued in the decies tantum action shared the other half. A judge who takes bribes from both sides in a dispute is called an ambidexter too. A lawyer is considered an ambidexter when she abandons the party she initially represented in a dispute and then represents the opposing party. An ambidexter is a person who engages in double-dealing. This term for a bribe-taker dates back to 1532. Ambidexterity means unusual cleverness or deceitfulness.
Nathan Bailey, “Dictionary of Canting and Thieving Slang,” 1721, www.fromoldbooks.org/NathanBailey-CantingDictionary, April 15, 2006.

 

Nixie
A piece of mail that can’t be delivered because the addressee is fictitious or the address is incorrect. The term nixie dates back to 1885 and is derived from “nichts,” a German word for nothing. According to the United States Postal Service (USPS), up to 33 percent of all mail contains addressing errors and consequently gets nixed or rejected. Then, a nixie clerk at a post office examines each rejected piece of mail to correct it, return it, forward it, hold it, or destroy it. Normally, two percent to 10 percent of the mail still will remain undeliverable. Postal inspectors create test pieces of undeliverable mail and send out those intentional nixies to detect illegal interference with mail processing and delivery. Auditors or fraud examiners should review their clients’ mailroom procedures to determine how returned nixies are handled. A supervisor should open the nixies daily to search for payments, deposits, gift certificates, and customer service letters that need to be resolved. Nixies should be red flags if they were originally sent from the accounts receivable, accounts payable, payroll, or shipping departments. If a marketing department rents a mailing list, a rental refund could be requested if the nixie rate is too high. When a bank sends a welcome letter to the customer of a new account, loan or credit card, the red flags should be waving high if a nixie is returned. A nixie shouldn’t be used to make an address correction in company data files because the new information marked on the returned envelope might be incorrect or fraudulent too. Put a block or hold on the account instead, until new information is obtained and verified. Some organizations keep nixie files or nixie logs to help identify fraud attempts or internal processing problems. Loss prevention specialists and department managers review the nixie logs and follow up. Some legal counsels mandate first-class postage on privacy notices their companies are required to send to customers. If you’re testing an address or mailing list for fraud, use first-class postage on those mailings. Nixies with first-class postage are returned to the sender (RTS) without additional charges by the postal system. Nixies sent at bulk mail rates are destroyed by the postal service unless the envelopes have an endorsement such as “Return Service Requested” and additional fees are paid.
Lynn Leffert, “Marketing Terminology Made Simple,” November 15, 2004, www.actonfs.com/ask_lynn_38.html.

 

Warm Card
A bankcard with restricted usage. A warm card permits withdrawals or deposits, but not both. A deposit-only warm card allows a merchant to deposit his daily cash receipts at a night depository and get a receipt from an automated teller machine (ATM). This type of warm card reduces the opportunities for fraudulent purchases or cash withdrawals. A hot card is a bankcard that has been reported lost or stolen, or has been cancelled by the issuer.
Thomas Fitch, “Dictionary of Banking Terms,” Barron’s Business Guides, Hauppauge, New York, 1997, pages 226 and 504.

 

Dialed Number Recorder (DNR)
An electronic device that law enforcement agencies use to monitor the activity on a phone line involved in a criminal investigation. A court order is obtained, but the legal standard to use a dialed number recorder isn’t as high as a wiretap. A DNR helps to identify the suspects, accomplices, and co-conspirators, and gather information for future wiretap orders. A telephone company employee often installs the device at the switching facilities. A dialed number recorder is attached to the phone line and records every digit dialed by rotary or touch-tone for outgoing calls. It also records the time each call was started and completed and calculates the length of the call, but it doesn’t record the voice portion of the call. A DNR can record information about prepaid phone cards used for outgoing calls including the dialed access numbers, card account numbers, and personal identification numbers (PINs). A DNR can monitor several lines and has an internal printer to create a hard copy of the data collected, like an adding machine tape. A dialed number recorder also is called a “pen register” device. The uses and restrictions of the devices are covered in the Pen Register Act – Title III of the U.S. Electronic Communications Privacy Act (ECPA) of 1984 and the USA-Patriot Act of 2001. If the phone line customer has activated the Caller ID service, a DNR can record the information on incoming calls too. A Caller ID device is similar to a “phone trap” or a “trap and trace device.”
Steven Branigan, “High-Tech Crimes Revealed: Cyberwar Stories from the Digital Front,” Addison-Wesley, Boston, Massachusetts, 2005, pages 19 and 20.
Photo: www.racominc.com/dialednumber.htm, July 15, 2006.

 

Play Fast and Loose
To trick or cheat someone to gain an unfair advantage. To pull a fast one. To be recklessly irresponsible, unreliable, or deceitful. Sometimes salesmen, accountants, or reporters are accused of playing fast and loose with the facts. Advertising claims using “before and after photos” are often questionable. The phrase comes from a cheating game called “fast and loose” played by sharpers at country fairs and racetracks since the 15th century. William Shakespeare mentioned the gypsy game in his play “Antony and Cleopatra” (1606). As an audience gathers, the challenge starts with a belt or strap that’s laid edgewise on a tabletop. The belt is rolled or doubled up with a loop in the center. Then the huckster bets that no spectator can catch the loop with a stick or skewer as the trickster unrolls the belt. This looks to be easy, so fairgoers place small bets. If the belt remains fast – meaning fixed or immovable – the bettors in the audience could win. However, the trickster unrolls the belt in a manner that makes catching the loop practically impossible. The belt gets loose or free, so the audience loses their bets. Disbelieving victims bet again and again. In a similar trick, a magician makes a figure-of-eight configuration with a string of beads and asks an audience volunteer to put their finger inside either circle. However, the magician knows two ways to make a figure-of-eight. With the first method, the volunteer’s finger will always snag the beads and win. When the magician uses the secret second configuration, the volunteer always loses because the beads will never get caught. Since the 1970s, playing fast and loose with belts and bets has been banned at many carnivals because it doesn’t give the audience a fair chance to win. Likewise, playing fast and loose with financial records, disclosures, or promotional claims isn’t an ethical way to operate a business. It can turn trusting investors and consumers into victims.
http://en.wikipedia.org/wiki/Fast_and_Loose, April 16, 2006.

 

Office Creeper
A thief who smiles and calmly walks into an office for less than an hour looking for unguarded laptop computers, wallets, and purses. An office creeper tries to fit in by wearing a business suit, delivery uniform, or cleaning crew apparel. Office equipment and personal items are easier to take during breaks, lunch hours, department meetings, and shift changes. A used laptop can be sold for US$400, but the information on the hard drive is more valuable for identity theft or corporate espionage. More than 600,000 laptops were stolen in 2004 for an estimated US$5.4 billion loss of proprietary information, according to Safeware Insurance. Less than two percent of stolen laptops are ever recovered. Some office creepers are part of organized gangs.
Bryan Long, “A Creepy Tale of Workplace Theft,” Atlanta Business Chronicle, November 14, 2005.

 

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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