Monday, July 16, 2012

Vandy grad uses economics to uncover massive fraud

Brian Fox, distinguished Vandy alum, remembered one of the lessons from Chapter 1,  that those who fail to anticipate self-interested behavior are often victimized by it.  Brian's software helped uncover the fraud at PFGBest:
Wasendorf was asked by NFA months ago to grant permission for audit confirmations to be run through  Such permissions are required because banks cannot just give information out about a client without their permission.  However, Wasendorf pushed back and refused for months to give such permission.

When Wasendorf signed off on allowing NFA to use last week, he knew the end was near.  By 8:00am on Monday, he was in his car when his son found him unconscious in the PFGBest parking lot…
Beyond its use to catch fraud, Brian is also suggesting that you can use his software as a "screen" to identify miscreants:
”Simply not wanting to use the system is often a red flag that something is wrong,” Fox said of the PFGBest refusal.  Fox, who has been on vacation since Monday, only heard of the PFGBest situation when he read about it in the news.  As he read more about the case, he knew that their software had been a part of discovering this fraud.  ”Since Tuesday, my phone has not stopped ringing,” he said.
 Now, if I can only get Brian to plug the textbook...

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