8 ms·
Fraud investigation is believing your lying eyes
- poplarsol 7mo agoPatrick is too polite to mention it, but frauds work much better if the fraudsters are also fully integrated into the political machine of the people nominally investigating the fraud.
- laidoffamazon 7mo ago[flagged]
- joe_mamba 7mo ago>cryptoracist He hates cryptographers?
- laidoffamazon 7mo agohttps://en.wiktionary.org/wiki/cryptoracist https://en.wiktionary.org/wiki/cryptoracist
- joe_mamba 7mo agoSo it's a made up term from people who want to discredit people they don't like by calling them "secret racist" without having any proof.
- laidoffamazon 7mo agoAll terms are made up by humans
- joe_mamba 7mo agoYeah but calling someone a racist is a serious accusation, you better bring receipts or be liable for defamation. Calling them a "secret racist" instead isn't the workaround that absolves you from this.
- tptacek 7mo agoYou cannot in fact be made liable for defamation for calling someone a racist. (Patrick, a close friend I have known for many years, is not a racist.)
- dragonwriter 7mo ago> Yeah but calling someone a racist is a serious accusation, you better bring receipts or be liable for defamation There are a large number of countries with their own systems of law, and its possible that in one of them calling someone a racist might be subject to defamation law, but in most I am aware of that's going to be a problem because its not even a well-enough-defined fact claim to be legally true or false.
- renewiltord 7mo agoI should warn you that the user you are replying to is a crypto-paedophile. Be careful. There is no evidence to describe how he might retaliate.
- mikkupikku 7mo agoCrypto[insult] is just a shorthand for saying "I don't actually have evidence to support my accusation."
- mock-possum 7mo agoNo, it’s a term for a particular brand of racism - Like complimenting someone for being ‘articulate,’ or ‘one of the good ones.’ Sounds innocent enough, until you understand the racist underpinnings.
- mikkupikku 7mo agoSee above, where it is being used as an insult without any evidence to back it up. This is the most common usage, and usage defines the true meaning of the word.
- SketchySeaBeast 7mo agoThe man has nothing nice to say about Bigfoot.
- renewiltord 7mo agoThe alternative explanation that he is against cryptocurrency actually is true.
- SketchySeaBeast 7mo agoSeems to be a bad use of "racist".
- renewiltord 7mo agoOh I agree. I’m mostly just being facetious.
- tptacek 7mo agoI don't think that's in evidence. Institutionalized and ideologically-driven apathy towards the fraud, sure, but that's not uncommon (see: the defense industry; the finance industry).
- learingsci 7mo agoA distinction without a difference imo. I think most people rightfully surmise the defense and financial industries are rife with, if not outright fraud, at least waste and abuse. We could use better language perhaps.
- christkv 7mo agoIts hilarious how short human memory is. To me Minnesota just seems like a replay of Tammany Hall in NYC
- tptacek 7mo agoThen I think you need to read more about Tammany Hall, because it was not simply a widespread pattern of fraud in social services.
- christkv 7mo agoThere was few social services at the time. It was a patronage system. Different rewards but buying votes all the same. My point is that patronage is a long storied American tradition so I don’t know why people are al shocked that such schemes are still ongoing. Republican and anti castro cubans is or was a similar patronage system.
- lazide 7mo agoTammany hall got people murdered [https://en.wikipedia.org/wiki/Tammany_Hall https://en.wikipedia.org/wiki/Tammany_Hall].
- treebeard901 7mo agoI'm kind of surprised how the political and legal network around Feeding Our Future, for example, has gone so unnoticed and underreported.
- sdwr 7mo agoAll I remember hearing about this is how creepy and racist it was to look for kids at a black-owned daycare. It was a scam the whole time?
- clucas 7mo agoAccording to OP, there is substantial evidence indicating about 50% of the daycares are scams. I've seen Nick Shirley's video, I don't think he demonstrated any concrete about any of the sites he visited (he's not a very good investigator), but if the 50% number is correct... well, the broken clock was probably right at least a couple of times that day.
- tptacek 7mo agoThe 2019 OLA report "Child Care Assistance Program: Assessment of Fraud Allegations" is what makes the claim that greater than 50% of reimbursements to child care providers under these specific programs were fraudulent. That estimate is broadly and bipartisanly considered to be directionally true.
- bonsai_spool 7mo agoHave you read the document? I often find these things that we believe to be true wind up being a game of telephone. We further have no prior (is the metric of this sort of like how everyone has committed a crime given sufficient prosecutorial attention)? I've also never heard of this report before this year as someone quite attuned to what happens in Minnesota. One document contributor contends, notably, that if "adult “employees” spend hours in hallways chatting with other adults [...] the entire amount paid to that provider in a given year is the fraud amount." I'll leave the assessment of that definition to readers. https://www.auditor.leg.state.mn.us/sreview/ccap.pdf https://www.auditor.leg.state.mn.us/sreview/ccap.pdf
- deleted 7mo ago[deleted]
- renewiltord 7mo agoYeah, the fraud’s been around for a while and the Biden DoJ was investigating it. One of the guys got fingered trying to bribe a juror¹ but he stole half the bribe money. The politicization of the issue means that Democratic Party aligned people continually flag any reference to the scam on HN though. If anyone else said that someone broke in and stole all the records from a daycare days after it was accused of fraud it would be considered a bald-faced lie but because of the political alignment (this is VP candidate Walz’s state) everyone is forced to pretend there’s no scam. ¹ Paradoxically the one honest juror who reported the bribe was removed from the case. No others reported any bribe which obviously must mean they received none.
- joe_mamba 7mo ago[flagged]
- laidoffamazon 7mo agoI don't recall Brett Favre's scam in MS on HN
- Analemma_ 7mo agoTrump has pardoned literally dozens of Medicare fraudsters [0] (Lawrence Duran and Philip Esformes are two of the biggest ones, but there are a bunch more smaller ones), and also fired ~20 people who were attempting to investigate Medicare fraud. I haven't seen any HN articles about this, never mind getting to the HN front page twice a day, so I'll take your retraction and apology now. [0]: https://tennesseelookout.com/2025/04/02/trump-says-hell-stop-health-care-fraudsters-last-time-he-let-them-walk/ https://tennesseelookout.com/2025/04/02/trump-says-hell-stop...
- hyperpape 7mo ago> They will sometimes organize recruitment very openly, using the same channels you use for recruiting at any other time: open Facebook groups, Reddit threads, and similar. They will film TikTok videos flashing their ill-gotten gains, and explaining steps in order for how you, too, can get paid. > As a fraud investigator, you are allowed and encouraged to read Facebook at work. I tend to believe this, but it would be a lot more compelling with links to a case where Facebook/TikTok posts were useful evidence.
- margalabargala 7mo agoThere are tons of these out there. In late 2024 there was the whole "Infinite money glitch" tiktok trend that was just check fraud. https://www.bbc.com/news/articles/c4gzp7y8e7vo https://www.bbc.com/news/articles/c4gzp7y8e7vo
- hyperpape 7mo agoGood example, though my impression was that was a quasi-viral TikTok trend that caught up random fools, not organized fraud?
- mananaysiempre 7mo agoIs that contradictory? Seems like organized fraud would need a supply of random fools, and a viral trend, if you can manage one, isn’t a bad way to get that.
- photo_guy 7mo ago[dead]
- photo_guy 7mo ago[dead]
- deleted 7mo ago[deleted]
- 650 7mo agoGreat article, ties in neatly with observations among many that fraud, grifting, and devolution of the social contract has escalated greatly since 2020.
- arduanika 7mo agoI don't think anything in the article, or in Patrick's general work, makes strong claims about a trend. Fraud may be getting worse as you say, but that is not his beat. He tends to depict fraud as eternal, and wants to shed light on it as a technical problem to solve. Also, there are real dangers to blackpilling about fraud. "Everybody is doing it" is exactly what one says before doing fraud oneself. In reality, there are a lot of people out there doing the right thing every day.
- laidoffamazon 7mo ago> To the extent that Bits about Money has an editorial line on that controversy, it is this: if you fish in a pond known to have 50% blue fish, and pull out nine fish, you will appear to be a savant-like catcher of blue fish, and people claiming that it is unlikely you have identified a blue fish will swiftly be made to look like fools. But the interesting bit of the observation is, almost entirely, the base rate of the pond. And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera. Does Patrick want to address the fact that this happened during school break and that Nick Shirley didn't prove much of anything?
- tptacek 7mo agoNo? He dunks on Shirley. His point is that professional investigators found and documented much worse things.
- wredcoll 7mo agoExcept for the part where when asked for proof he laughed off the idea of using convictions as a measure of accuracy.
- tptacek 7mo agoThe entire story of what happened in Minnesota, as agreed on by basically everybody involved including significant chunks of the government of Minnesota, is that convictions are not a reasonable measure of accuracy here. The story is that they didn't pursue fraud prosecutions in proportion to their severity. Responding to that with "but there weren't convictions" is literally just begging the question. It's very annoying that I feel like I have to say this but: I'm a committed Democrat, and I feel like my anti-Trump anti-racism bona fides, including on this site, are quite solid. The Minnesota thing happened. We can debate the scale, but it happened.
- wredcoll 7mo ago
- dispersed 7mo agoUnder "In which we briefly return to Minnesota": > And I think journalism and civil society should do some genuine soul-searching on how we knew—knew—the state of that pond, but didn’t consider it particularly important or newsworthy until someone started fishing on camera. In... the same section where he cites all of the evidence the government has put together against the fraudsters. What is the issue? That these investigations should have been more prominently featured in the mainstream news? Would that have helped or hurt investigations? > Of course, as the New York Times very carefully wordsmithed recently: >> Minnesota officials said in early January that the state conducted compliance checks at nine child-care centers after Mr. Shirley posted his video and found them “operating as expected,” although it had “ongoing investigations” at four of them. One of the centers, which Mr. Shirley singled out because it misspelled the word “Learning” on its sign, has since voluntarily closed. > An inattentive reader might conclude from this paragraph that the Times disputes Shirley’s reporting. The New York Times is literally quoting what the Minnesota officials said. What were they supposed to do, add on "but a kid on YouTube says differently"? I don't think the serious response to Nick Shirley's "journalism" is that there was no fraud; rather, it's that he came into the situation with a thinly veiled agenda and fed his audience exactly what they wanted to hear. Did his video make it more or less likely that we'll be able to investigate and resolve the fraud situation in MN? I guess that depends on how serious you think the laughably corrupt Trump administration is, but the fact that they seized on this as an excuse to send in 3000 ICE agents is not exactly promising.
- danielvf 7mo agoThe report to the government about a more than 50% fraud rate was from six years ago. The Minnesota government was not serious about dealing with problem. Most businesses would not last that long with a 50% customer fraud rate. Yes, there were some investigations and convictions, but nothing to on a scale that would deal with problem, nor any systematic change to a level paying huge amounts of money to scammers.
- dispersed 7mo agoFirst: assuming your goal is to stop the fraud, does making deliberately inflammatory YouTube videos get you closer to that goal? I think the government's response clearly shows that they're more interested in the optics of "blue state full of scammer immigrants" than any actual resolution. Second: I think one of the points Patrick misses is that fraud did indisputably occur, but that doesn't mean we need to treat Shirley as a neutral observer who simply cares about fiscal responsibility. (If I'm wrong, I eagerly away his next video on red state fraud.)
- advisedwang 7mo agoThe reason that "the left" is rolling eyes at the fuss being made over this fraud is: 1. The fraud is in fact being investigated, people are being charged and convicted. Despite this, rightwing media institutions are acting as if fraud is being ignored and maybe even covered up and encouraged because 2. This is just another example of the decades long project by those who have lots of money and don't want to see it go to takes to paint social programs as a money-pipe from good hardworking people to fraud and waste.
- zahlman 7mo ago> The fraud is in fact being investigated, people are being charged and convicted. And as explained in TFA, this is inefficient and ineffective even in theory: > So-called “pay-and-chase”, where we put the burden on the government to disallow payments for violations retrospectively, has been enormously expensive and ineffective. Civil liability bounces off of exists-only-to-defraud LLC. Criminal prosecutions, among the most expensive kinds of intervention the government is capable of doing short of kinetic war, result in only a ~20% reduction in fraudulent behavior. Rearchitecting the process to require prior authorization resulted in an “immediate and permanent” 68% reduction. > Despite this, rightwing media institutions are acting as if fraud is being ignored and maybe even covered up and encouraged because Which is a reasonable characterization of the situation given the scale of the fraud and the fact that it's still going on, in such a blatant manner. We're talking about total fraud on the order of $10b, and some significant fraction of that money has presumably been sent back to Somalia. We're talking here about amounts that would represent a significant percentage of Somalia's entire GDP (https://en.wikipedia.org/wiki/Somalia#Economy https://en.wikipedia.org/wiki/Somalia#Economy). > This is just another example of the decades long project by those who have lots of money and don't want to see it go to takes to paint social programs as a money-pipe from good hardworking people to fraud and waste. "The left" clearly has a vested interest in that not happening; therefore, it is also in their interest to take appropriate actions against fraud as they might learn about from the financial industry.
- arduanika 7mo agoFair enough. But the reason that "the right" is not letting go of the story is: 1. The fraud was not in fact being investigated seriously enough until this kid, even while lacking the basics of journalism as Patrick describes here, forced the issue. 2. This is just another example of the decades long trend where more and more bad patterns and outcomes can persist for far too long because the normal checks are fended off with spurious accusations of racism. There's some variation on how "the right" would handle (2). The center-right wants to shore up our culture of color-blindness to patch these vulnerabilities. The far-right wants to do away with egalitarianism altogether, and just go back to plain old racism. If we can't figure out the former, we might well end up with the latter. (My reading is that Patrick falls squarely in the "center-right" here, fwiw. Then again, it can be hard to decode his exact subtext from under all the polite circumlocutions. Reading his stuff is something of an acquired skill and/or taste.)
- martythemaniak 7mo ago[flagged]
- tptacek 7mo agoNone of this has anything to do with what he wrote, which is about the largest fraud scheme in the history of the midwest. Fraud is part of BAM's beat.
- martythemaniak 7mo agoChoosing what to pay attention to says a lot about who you are and what you think. The largest fraud in the history of the country is unfolding in Washington, there is endless potential BAM content that would be of incredible consequence, but you won't find any mention of anything like that on his blog. Anybody that knows who patio is knows where his bread gets buttered understands very well why he would never say anything on those topics. As it stands this article is the only 'politica' post he has over the last year. This is essentially gish-gallop or Banon's flood but for an audience that thinks itself sophisticated. As long as you are only focused on discussing the minutia of carefully selected technical materials, you won't have to focus on anything else going on.
- tptacek 7mo agoNo, to all of this. Talking about the largest fraud scheme in the history of the midwest without taking on all of Washington corruption doesn't make you a "gish gallop" or "Banon's flood" (whatever that is). In fact, it's kind of the opposite of a gish gallop. It's a single coherent argument. If you can rebut it, do so.
- wredcoll 7mo ago"the history of the midwest" seems awfully specific and easy to redefine as required. That being said, it was a fairly interesting article about fraud in general, but if this is the only fraud article he wrote, why is that? There's lots of public frauds going on right now, is he going to write about them next?
- stackedinserter 7mo ago[flagged]
- kristjansson 7mo agoOn Shirely, and the reaction: there's a markedly different valence to a fraud 'investigation' seeking to arrest, try, convict, and imprison _fraudsters_ vs one seeking (through a thin veil) to mar an entire community and bring about their violent dispossession at the hands of unaccountable little green men. It would not be an unreasonable person that strongly supports the former and opposes the latter.
- arduanika 7mo agoHmm, you completely lost me at "little green men". What/who is this referring to? Extraterrestrials?
- vharuck 7mo agoThe last time I heard about "little green men" (other than ETs) was to describe obviously-but-unofficially Russian soldiers who invaded Crimea in 2014 and claimed to be natives who wanted Russia to annex the region. https://en.wikipedia.org/wiki/Russian_occupation_of_Crimea https://en.wikipedia.org/wiki/Russian_occupation_of_Crimea I guess it's now being used as pejorative against groups of vaguely military style. Like the DHS agents conducting Metro Surge.
- arduanika 7mo agoHmm. Do you think that kristjansson was using it just to mean state-backed thugs, or were they also claiming some Russia link? (They haven't responded, and I've been downvoted for even asking the question. I am genuinely confused. I'll admit I don't follow this all very closely, but I want to understand what the phrase means here.)
- deleted 7mo ago[deleted]
- kristjansson 7mo agoYour original question was a bit of a challenge to accept earnestly. It’s a pretty charged situation; joking about ETs led me to discount it and may have led others to downvote. That said, I described them as such because I considered the comparison to a masked and armed force of nebulous origin and ambiguous intention apt.
- almosthere 7mo agoHe was able to show all the evidence David had. The evidence had to be leaked out of the government of MN because it was silent whistleblowers that had been turned down after doing internal investigations. The government of MN may be complicit in all of this. It could be that they were trying to be anti-racist, which is why a lot of the fraud is specifically being performed by Somalians. But it can also be pay for vote fraud - where the leaders of the Somalian communities tell everyone who to vote for, and they are doing this because Walz (or some other people) are shielding the daycares from being shut down. There is literally nothing wrong with stating this, we ought not be political about this. There may also be conservatives being elevated from Fraud as well, all of it should be routed. At this point it definitely warrants deep investigations, not more articles trying to destroy a 23 year old that went viral.
- wredcoll 7mo agoLook, this is a mostly reasonable, if slightly vague, article about investigating fraud and mechanisms by which you do so. What it lacks is any concrete suggestion as to what should change, beyond some vague allusions that perhaps racial/ethnic profiling should make a comeback. The real problem here though is that the entire article ignores the duty[1] the government owes its citizens. It's "fine"[2] if stripe or visa or whoever flips a coin and if it's tails they decide this person isn't allowed to be a customer of their company. The company loses any profit they might have made and life goes on. It's considerably more problematic when the government refuses to serve a citizen (or even worse, levies an accusation). There's some famous quotes about how many innocent people are appropriate to harm in the pursuit of the guilty but I'll leave those up to the reader. [1] duty feels like too weak of a word here. Obligation? Requirement? The only reason the government even exists is to benefit the citizens. [2] it becomes rapidly less fine when the company essentially has a monopoly over a system requires to participate in modern life, but that's a different topic...
- mlyle 7mo ago> [2] it becomes rapidly less fine when the company essentially has a monopoly over a system requires to participate in modern life, but that's a different topic... That's the real thing here. Concentrated power is scary-- whether it's the federal government, Visa/Mastercard, Google, etc. At least power concentrated under the control of a government might be held accountable to the people. With private, concentrated power: fat chance.
- wredcoll 7mo agoI'm working on making it a thing, but my theory is that power can't be destroyed, merely transferred, and in most cases I'd rather have the power be vested in a democratic government.
- mlyle 7mo agoThe best option is it being decentralized and diffuse and operating through market mechanisms. If that leads to bad outcomes, then government is a next best choice. (Of course, all the special cases, natural monopoly, etc etc etc-- government has a role in addressing the bad outcomes associated with those).
- blurbleblurble 7mo agoTake a look at the actual 2019 OLA report McKenzie cites. This characterization is wrong in ways that matter. The "50% fraud" claim? It comes from one investigator (Swanson) using what the OLA explicitly calls "a higher level view, a view that does not require the kind of proof needed in a criminal or administrative proceeding." His methodology? If kids are poorly supervised, "running from room to room while adult employees spend hours in hallways chatting".... he counts the entire payment as fraud. That's not "billing for phantom children" it's "I don't like how this daycare is run." The OLA's actual finding: "We did not find evidence to substantiate the allegation that the level of CCAP fraud in Minnesota is $100 million annually." Proven fraud over several years was $5-6 million. Terrorism? "We were unable to substantiate the allegation that individuals in Minnesota sent CCAP fraud money to a foreign country where a terrorist organization obtained and used the money." They checked with the U.S. Attorney's Office.. none of Minnesota's terrorism cases involved CCAP money. McKenzie writes "beyond intellectually serious dispute" about claims the primary source he cites explicitly could not substantiate. Meanwhile the president is posting videos of the Obamas as apes and calling Somalis "garbage", having federal prosecutors throwing out arbitrary $9 billion estimates in press conferences. See for yourself: https://www.auditor.leg.state.mn.us/sreview/ccap.pdf https://www.auditor.leg.state.mn.us/sreview/ccap.pdf
- patio11 7mo agoThe Swanson memo memorializes the consensus of his investigatory group and, put to question by OLA and legislators, they stick with that story: Page 14 of PDF: [The OLA] did not find evidence to substantiate Stillman’s allegation that there is $100 million in CCAP fraud annually. We did, on the other hand, find that the state’s CCAP fraud investigators generally agree with Stillman’s opinions about the level of CCAP fraud, as well as why it is so pervasive. (Stillman is a line level investigator who gave a media statement which was explosive. Swanson, who authored in the internal memo, was his manager.) I do mention that other officials only agreed to characterize as fraud fraud which had resulted in convictions. We now, years later, have nine figures just from the convictions (and guilty pleas). These officials pointedly refuse to put any number on fraud other than the number incident to convictions. Moreover: you should be very clearly correct if you accuse someone of citing a document as making claims it does not say. That is a serious accusation. BAM's citation of this piece is "the state’s own investigators believed that, over the past several years, greater than fifty percent of all reimbursements to daycare centers were fraudulent." This is _absolutely true_ and _is in the report as claimed_.
- kristjansson 7mo ago> Responsible actors in civil society have a mandate to aggressively detect and interdict fraud. If they do not, they cede the field to irresponsible demagogues. They will not be careful in their conclusions. They will not be gentle in their proposals. They will not carefully weigh consequences upon the innocent. But they will be telling a truth that the great and the good are not. Leaving this to the conclusion does the piece a disservice. One can quibble (and it would be good to here) the extent to which the government isn't pursuing the sorts of fraud discussed, but this as a thesis makes clearer the argument throughout for earlier and more aggressive pursuit.
- amadeuspagel 7mo agoInstead of giving parents vouchers, that they then use at a fraudulent daycare, in exchange for a fake job, while they take care of their children at home, parents should just get money, so that they can stay home taking care of their children if they prefer that.
- Muromec 7mo agoOr get a proper kindergarten run by the government. Radical idea, I know
- sakopov 7mo agoI never understood why we have public schools but not public kindergartens.
- sgerenser 7mo agoEverywhere I have ever lived in the U.S. has had public Kindergarten. I assume this is probably a regional difference in terms, though? In the U.S. Kindergarten is just the grade before 1st grade. Any schooling/day care before that is usually called "preschool" and is often funded to some extent at the state level but if so is usually limited only to low income individuals.
- Karellen 7mo ago> if you fish in a pond known to have 50% blue fish, and pull out nine fish, you will appear to be a savant-like catcher of blue fish, I don't get this. What does the proportion of blue fish have to do with the total number of fish you catch? Is there some stats knowledge I'm missing?
- amiga386 7mo agoIt's a fumbled metaphor, mixing absolute and relative numbers, and I think it's supposed to say "pull out nine blue fish". The point the article is making is that the "reporter" turned up and alledged to have found nine cases of daycare fraud. Nine sounds like a lot, right? But the article claims the state already knew 50% of the daycares claiming its aid were frauds (this is quite debatable, don't take it as fact). Presumably that's 50% of hundreds or maybe thousands of daycares. If blue fish were much rarer in the pond, i.e. lower percentage of daycares defrauding the government, you'd be considered a savant for fishing once and pulling out nine blue fish... but if the pond has thousands of fish and 50% are blue, it looks a lot less impressive.
- Karellen 7mo agoOh yeah, "nine blue fish" would make a lot more sense there.