Fraud Detection & Remediation

Fraud Detection & RemediationJob Aid Level 2

January 2021

American Association of Motor Vehicle Administrators

Use your PDF reader’s bookmark function to view the Index

FDR Level 2 Job Aid – Introduction to Covert Features

Page 2

Introduction to Covert Features

Using a Mag Loupe

A mag loupe is an extremely versatile tool in document examination because it can be used to examine:

• Printing and overall document construction in order to detect counterfeiting or alteration attempts.

• Overt features that may appear legitimate to the naked eye, but reveal evidence of tampering or counterfeiting

when magnified.

• Covert features such as microprinting that are designed specifically to require magnification in order to authenticate.

Magnifying Printing

Viewing printed text under magnification can help determine if a document is genuine or fraudulent. Magnification of common desktop printing methods such as ink jet and toner technologies reveals flecks of Cyan, Magenta, Yellow (CMY) and sometimes Black (CMYK) in the background as well as the printed characters, often with noticeable bleeding. These printing technologies blend colors in an attempt to simulate true tone inks. Viewing what should be white areas of a document only to find drops of color can help confirm that desktop printing methods have been used. Here, the offset printing on the left is crisp with true colors.


Page 3

Familiarize yourself with these magnified examples of images produced with different printing techniques.


Page 4

Magnifying Overall Construction Examining the entire document under magnification can help to find evidence of counterfeiting or alteration that may not be obvious to the unaided eye.

Here, the "USA" overlapping feature was carefully cut to incorporate a substitute adhered photo. Although some versions of passports may use adhered photos, magnification here reveals the careful incision made that should prompt

further investigation.

Magnification reveals cut marks around the photo area.


Page 5

Magnifying Overt Security Features

Casual observation of a document can determine that an overt security feature may be present. However, magnifying

overt security features can reveal concerns unnoticed by the naked eye.

Overt features should be consistent, crisp and clear. Disturbances resulting from changes to overlapping information

and/or inferior attempts at replication can quickly become evident under magnification.

It is important to take a few moments to verify under magnification the quality and integrity of common security

features such as security fibers, OVD's, safety block, seals, perforations and fine-line detailing.

The intricate and sharp details of this Optically Variable Device (OVD) are especially prominent when viewed with a mag

loupe and are good examples of the quality of genuine construction.

Magnifying Covert Security Features

Many counterfeiting attempts neglect to replicate microprinting and merely display what appears to the unaided eye as

a solid or sometimes dashed line.


Page 6

Auxiliary Lighting

In addition to examining specific features like watermarks, auxiliary lighting is useful when examining overall construction. Even though an examiner may know that a particular type of document does not contain watermarks, application of lighting techniques is still recommended. Here, direct backlighting reveals that the photo of the original holder has been covered by a second photo. Backlighting and magnification reveal erasure marks and alignment issues in the personal information.

Watermarks are much easier to distinguish when backlighting is used. Remember, watermarks are not printed on the paper, but are part of the paper's construction. As is the case when magnifying overt features, use an auxiliary light source to scrutinize the quality of features like watermarks. Although casual observation under ambient lighting may conclude that "something" resembling a watermark exists in the document, only closer inspection under proper lighting will provide a means to judge its integrity.


Page 7

UV Lighting

Long wave ultraviolet or UV lighting can be used to examine both overall document construction and specific security features. This type of examination relies upon the property of fluorescence, or an object's ability to emit light as the result of, and during, the application of ultraviolet light to the object. Fluorescent inks, dyes and security features are:

• Available in a wide variety of colors • Used as a covert element of visible overt features • Used to create completely covert elements • Difficult to reproduce accurately on color copiers

Fluorescent inks and overlays are available in the open market. Document examiners must be diligent in their review of fluorescent features to be certain that they are of the quality and clarity typical of original manufacture by the issuing agency. Remember, an item's ability to fluoresce does not confirm that the item is genuine and/or unaltered.

UV Lighting and Document Construction

Optically dull material (paper, plastic, polymer, etc) is often used as the base material in documents incorporating UV features. This material does not react to UV light, thus allowing specific ultraviolet features to fluoresce in contrast to the base material. The image depicts a sample document manufactured with optically dull material incorporating fluorescent features and a counterfeit made with highly reactive base material.


Page 8

Scrutinizing watermarks under UV is helpful when examining paper documents. Here, an otherwise well-constructed counterfeit watermark reacts. Under UV light, watermarks should not react and should look the same as the rest of the base material, which is usually UV dull.

A feature's ability to fluoresce should not be used solely to determine authenticity. Although the security thread used in the counterfeit document does shine brightly, the genuine thread illuminates crisply and in specific colors (red and blue on this document).


Page 9

UV Lighting and Overt Security Features

Overt seals, stamps, optically variable devices and text can be manufactured to react to UV light. Be diligent in your

review of these features to be certain that quality is consistent with that of the issuer's manufacturing process like the

example depicted here.

UV Lighting and Covert Security Features The most common interpretation of UV-sensitive features is that the feature is invisible to the naked eye but is revealed when exposed to UV light. This type of covert application must be examined carefully to avoid accepting a feature as genuine merely because it fluoresces. In contrast to overt features that may be treated with UV characteristics, it may be challenging to make determinations based upon the covert feature alone. For example, an overt seal that fluoresces should reveal a consistent level of quality in both its visible and UV-sensitive displays. The quality of an otherwise invisible UV feature must be judged on its own.

This example illustrates the importance of scrutinizing covert UV features. To the casual observer, the counterfeit on the right could very well be mistaken for genuine simply because the UV reactions are present.


Page 10

This image of a genuine document displays an otherwise invisible feature activated by UV light. Notice the crisp detail, use of color, intensity and the image's position which overlaps variable information.

In contrast to the original, the counterfeit is obvious. Simply because the document fluoresces does not mean that it should be accepted as genuine. It is important to look at the details within the image.

Covert UV photos can be incorporated in secure documents. Here, the standard photo appears on the document in one place, while an otherwise-invisible UV version of the photo appears elsewhere on the document (as evidenced

here by the personal data appearing over one image only)

FDR Level 2 Job Aid – Expanding the Review

Page 11

Expanding the Review

Evaluating the Mix of Documents

The Fraud Detection Model introduced in FDR Level I recommends a pathway to examine documents and the people presenting them in order to determine appropriate actions. When embarking upon an expanded review, it may be helpful to take a few moments to evaluate the overall scenario in which the documents are being presented. While you may have been careful in examining the documents for specific security features, take a moment to put the documents presented within the context of the document presenter's objective. Ask yourself:

• Does it make sense that a person with this purpose generally present these kinds of documents? • Are a number of the primary or supporting documents: • From multiple jurisdictions? • Temporary in nature? • Recently issued? • Expired? • Easily counterfeited/altered?

Interviewing Techniques

Your goal is to gather relevant information that will aid your review of the intent of the document presenter as well as the veracity of the documents in order to decide your next steps. Your interview questions should reveal...

• What • Where • When • How

…fraudulent documents may have been introduced.


Page 12

Prepare to Listen

Before formulating questions to ask, take a moment to prepare to effectively listen. By listening carefully and patiently, you can:

• Watch behavior and observe the document presenter's reaction to each question • Prevent the document presenter from misdirecting your attention • Avoid making incorrect assumptions

Approach

It is important to ask questions that will assist you in obtaining additional information, while following your organization's policies. Remember, an interview is a fact-finding exercise that will enhance your efforts to listen, observe and examine. You will be more successful if you:

• Maintain good eye contact • Use a pleasant voice • Have a friendly appearance • Speak clearly to ensure effective communication • Ask the document presenter for feedback to ensure understanding • Remain calm and interact in a professional manner • Keep your composure if confronted or contradicted • Control your facial expressions

The Basics

The specific questions to ask a document presenter will be dictated by his/her objectives, documents presented and the types of discrepancies noted. You can craft your questions to address the goals of the interview by beginning with the basics:

• What agency produced or issued this document? • Where did you receive this document and from whom? • When did you receive this document? • How did you obtain this document?

More Detailed Questions Example: Driver’s License Do you have any restrictions on your license? Did you just move here? From where? What is that near? Example: Social Security Card or Birth Certificate Could you tell me your date of birth starting with the year, month and day? Is this the only card you have ever had? Where were you born?


Page 13

Larger Fraud Efforts Although many individuals attempt to create/alter documents themselves, criminal enterprises on large and small scales have been built upon providing higher-quality fraudulent documents to a growing number of eager customers. As you become more familiar with the types of fraudulent documents you encounter, it is very beneficial to make note of the specific attempts that may indicate links to larger fraud efforts.

• Common Source: Individuals within these enterprises will often specialize in the counterfeiting or alteration of a particular document such as a driver's license, credit card or passport. Many times, flaws will be repeated across all instances of this individual's work.

• Theft of Legitimate Base Materials: Criminals will often target issuing agencies for the theft of blank stock or base material. Branch offices of DMV's have been burglarized of blank title certificates, registrations, validation stickers, license/id stock, etc. This material is then either sold to other criminals or used directly by the thieves in the creation of fraudulent documents.

• Issuer Practices: There are instances when issuing-agency practices unintentionally allow for a large number of documents to be issued under substandard safeguards or with poor controls in place. This may lead to persons who have illegally obtained these documents seeking to use them in more secure jurisdictions to gain a better-accepted form of identification or to support an alternate identity.

• Sovereign Citizens: Sovereign citizen groups are loosely organized associations of antigovernment extremists

who believe that the established government has no authority over them. They believe that they are exempt

from federal, state, and local laws and tax systems. Sovereigns believe in “common law”in which crimes only

occur when property is damaged or a person is physically injured. Sovereigns often incorrectly apply this logic to

deny responsibility for motor vehicle or administrative infractions. They are known for filing nuisance lawsuits or

liens against individuals who attempt to mitigate fraudulent activity. Sovereigns have been known to create their

own driver’s licenses, license plates, and other documents.

Although holding sovereign beliefs is not itself a fraudulent activity, awareness of common behaviors can help you to better scrutinize interactions.


Page 14

Sovereigns often use words/phrases and paperwork that can help identify them, such as: - "Indigenous", "Domicile", "Aboriginal", "Strawman" - "Non-resident Alien" - "Traveling in a commercial/private capacity" - "El-Bey" (as part of Sovereign's name) - "Who is the victim?" - "De-facto Government", "Uniform Commercial Code" - "Oath of Office" - "Conveyance" or "Vessel" - Red thumb print or gold/silver seals on paperwork - Red ink written at 45 degree angle - Multiple notary stamps, Bracketed zip codes Sovereigns have attempted to intimidate government officials to issue documents with incorrect information, bypass certain requirements, or avoid civil penalties. They may present documents that claim immunity, or that those filing charges are liable for violating the Sovereign's rights.


Page 15

Fraud Trends

The pursuit and attempted use of fraudulent documents continues to rise. Increased communication within the fraud detection community is critical in identifying trends in the counterfeiting and alteration techniques being discovered as well as the methods and instruments used to perpetrate fraud.

• Pseudo Documents: Used as both supporting and primary documentation to support fraudulent activities, pseudo documents can present challenges for the document examiner, particularly in environments with an international clientele. Though they may appear official, pseudo documents have no legal basis as they are not issued by an authorized entity. These types of documents generally fall into generic categories:

• Fantasy documents bear the names of imaginary issuers. For example, a passport issued by "The World Service Authority" or a nonexistent country.

• Camouflage documents appear to be issued from entities that in fact, no longer exist or have officially changed names. For example, a passport issued by the country of Burma (now the Republic of the Union of Myanmar).

• Fictitious documents display the name, seal or other information from a legitimate agency, but do not correspond to any existing or real document. For example, a "universal benefits identification card" issued by the U.S. Dept. of State.

• Imposter Fraud: As genuine identity documents become increasingly difficult to counterfeit/alter successfully, imposter fraud has increased at a substantial rate. Imposter fraud involves obtaining genuine documents from an issuing agency using another party's identification information.

• Somewhat different from traditional identity theft, imposter fraud is most often used to facilitate legitimate movement in society while disassociating oneself from criminal histories, watch lists, immigration restrictions, etc.

• Being alert for imposter fraud is critical in both the issuance and "checking" processes.

• When issuing credentials, a careful review of supporting documentation is critical. Often, the key to identifying an individual attempting to secure primary identification credentials under another identity will rest upon finding counterfeits/alterations in supporting, secondary documents. Further, because the identification sought is usually a "first issue", it is important to corroborate the applicant's purpose, circumstances and "mix" of available documents.

• When checking credentials for entry or benefit release, the use of a genuine, verifiable document presents significant challenges, as verification processes and record checks will indicate a "pass" because the document is genuinely and properly issued.


Page 16

Resources There are a number of resources within the fraud detection community that can be accessed for a variety of needs. Associations of fraud detection and prevention professionals exist on both national and regional levels and can be identified through typical internet searches.

• Document Security Alliance Federal issuers: • Department of State • Department of Homeland Security • Social Security Administration • Department of Defense • Passport Canada Other Federal Resources: • U.S. Secret Service • U.S. Immigration and Customs Enforcement Forensic Laboratory • U.S. Postal Inspection Service Information Networks: • Law Enforcement Fusion Centers