Fascinating set of statistics in a story I just read about Los Angeles County.

The county has been challenged by an increase in fraud related to child services. It has grown by about 40 percent, and in many cases perpetrated by highly organized fraud rings.

A proof of concept (POC) to assess the effectiveness of social network analysis, suggests they would see a return on investment of between $7m and $30m annually.

The POC demonstrated that by using predictive models and peer group analysis to detect behavioral anomalies in the utilization of child care services, fraud risk scores could be developed to help decrease the number of false positive cases assigned to investigators. The POC also allowed the team to map potential fraud rings.

According to Manuel Moreno, Director of Research, Chief Executive Office, LA County, “We calculated that the accuracy rate of fraud rings identified by the social network analysis solution to be, with reliability, 85 percent.”

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