GOTCHA! Network-Based Fraud Detection for Social Security Fraud

We study the impact of network information for social security fraud detection. In a social security system, companies have to pay taxes to the government. This study aims to identify those companies that intentionally go bankrupt to avoid contributing their taxes. We link companies to each other th...

Full description

Saved in:
Bibliographic Details
Published in:Management science 2017-09, Vol.63 (9), p.3090-3110
Main Authors: Van Vlasselaer, Véronique, Eliassi-Rad, Tina, Akoglu, Leman, Snoeck, Monique, Baesens, Bart
Format: Article
Language:English
Subjects:
Algorithms
Bankruptcy
bipartite graphs
Fraud
fraud detection
fraud propagation
guilt by association
Investigations
network analysis
Social security
Taxation
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We study the impact of network information for social security fraud detection. In a social security system, companies have to pay taxes to the government. This study aims to identify those companies that intentionally go bankrupt to avoid contributing their taxes. We link companies to each other through their shared resources, because some resources are the instigators of fraud. We introduce GOTCHA!, a new approach to define and extract features from a time-weighted network and to exploit and integrate network-based and intrinsic features in fraud detection. The GOTCHA! propagation algorithm diffuses fraud through the network, labeling the unknown and anticipating future fraud while simultaneously decaying the importance of past fraud. We find that domain-driven network variables have a significant impact on detecting past and future frauds and improve the baseline by detecting up to 55% additional fraudsters over time. This paper was accepted by Lorin Hitt, information systems .
ISSN:0025-1909
1526-5501
DOI:10.1287/mnsc.2016.2489