Routine Fraud Detection Fingered Spitzer

by Doug Henschen, in Intelligent Enterprise, March 12, 2008

“Follow the money.” This approach to investigation, applied by criminal prosecutors going back before Eliot Ness and made famous as a line in the movie “All the President’s Men,” is exactly how soon-to-be-ex New York Governor Eliot Spitzer was tied to a high-end prostitution ring. In this case it was fraud detection technology, of the kind routinely applied by banks in money laundering investigations, that led directly to Spitzer and to his resignation.

… The detection, of course, was done by technology routinely and automatically applied to spot transaction patterns indicative of money laundering — not by bored bank employees randomly dipping into high-profile accounts on some sort of fishing expedition. Doug Henschen’s analysis.