A Canadian bank better predicts, detects and prevents fraud

IBM i2 software helps expose a conspiracy among multiple groups engaging in mortgage fraud

Published on 29-Oct-2013

"i2 Analyst’s Notebook was instrumental in the investigation and in providing proof of collusion amongst the different groups involved." - A Canadian bank

Customer:
A Canadian bank

Industry:
Banking

Overview

Founded in 1817, this Canadian bank offers a highly diversified portfolio of financial services. With more than 38,000 employees, the company offers retail banking, wealth management and investment banking products and solutions throughout North America. Within the United States, the bank serves customers through a major Midwest financial institution with a network of banks throughout Illinois and wealth management offices across the country.

Business need:
This Canadian bank needed to obtain proof of major mortgage fraud committed by multiple, interconnected groups and to better predict, detect and prevent future fraud.

Solution:
The bank implemented IBM® i2® Analyst’s Notebook software to more easily identify and expose a conspiracy among multiple groups and to pinpoint future fraud.

Benefits:
The solution helps detect and prevent mor tgage fraud, allows investigators to identify par ticipants in complex fraud schemes and provides substantial proof of the crimes.

Case Study

Founded in 1817, this Canadian bank offers a highly diversified portfolio of financial services. With more than 38,000 employees, the company offers retail banking, wealth management and investment banking products and solutions throughout North America. Within the United States, the bank serves customers through a major Midwest financial institution with a network of banks throughout Illinois and wealth management offices across the country.

Challenge
Criminals engaging in mortgage fraud steal USD4 billion to USD6 billion yearly in the United States; no comparable data for Canadian banks is available. Based on FBI findings, 80 percent of those cases involve industry insiders, with the rest relating to organized crime.

In 2006, the Canadian bank discovered what is believed to be the largest case of mortgage fraud in Canada. Over several years, the scam garnered approximately USD140 million, with almost USD70 million attributed to phony mortgages. The fraudsters targeted the worst house in a good neighborhood and bought it at an affordable, fair market value price using “straw buyers,” mostly new immigrants who charged USD8,000 to use their names to obtain a mortgage. The fraudsters convinced the bank that the house was worth more because of its location, ultimately causing the company to foreclose on the mortgage when no payment was made. The bank needed a solution that would help it investigate complex data relationships and uncover key players to provide prosecutors with evidence to dismantle the elaborate scheme. The company also wanted to predict, detect and prevent future mortgage fraud.


Solution
The Canadian bank implemented IBM i2 Analyst’s Notebook software to organize and analyze multiple forms of data ingested from various sources. This helped quickly uncover key data and complex relationships, producing actionable intelligence to aid in identifying key members of the criminal network.

By implementing i2 Analyst’s Notebook software, the Canadian bank pinpointed hundreds of Albertans, including a Calgary Conservative Member of Parliament (MP), lawyers, mortgage brokers and four of the bank’s employees. All of these people were charged in an ongoing lawsuit, alleging a sophisticated criminal network of 14 interconnected groups. Further, the bank is now positioned to better predict, detect and prevent fraud in the future.

Benefits
• Stopped a major mortgage fraud network that stole approximately USD140 million
• Improved the bank’s ability to predict, detect and prevent future mortgage fraud
• Saved the company potentially millions of dollars on future losses by providing better fraud protection

For more information
To learn more about IBM i2 software, please contact your IBM marketing representative or IBM Business Partner, or visit the following website: ibm.com/software/industry/i2software

Products and services used

IBM products and services that were used in this case study.

Software:
i2 iTel

Legal Information

© Copyright IBM Corporation 2013 IBM Corporation Software Group Route 100 Somers, NY 10589 Produced in the United States of America October 2013 IBM, the IBM logo, ibm.com and i2 are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at www.ibm.com/legal/copytrade.shtml. This document is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided.