It’s based on...
It’s based on the assumption of all sorts of convoluted guesses on our part, but
the guesses turn out to be mostly right.
We actually had these human investigators, like 20 to 30 human investigators,
that would try to unravel particularly large fraud cases and see if we could
recover some money or send the Feds after somebody. We didn’t really have
much success sending people after criminals. All they’d try to do is see where
the money went and see if we could recover some of it before it left the system.
That was pretty difficult to do because the tools we had available to us at the
time allowed you to look at only a couple of accounts at the same time. If you
had a well-coordinated fraud, with thousands of accounts or hundreds of thousands
of accounts involved, you basically didn’t know how to follow it.
I remember walking into the cubicle of one of the investigators, and he had
volumes and volumes of printouts. I asked what it all was, and he said, “I’m tracing
some money.” I said, “How many cases is this?” And he said, “This is just
one case.” I said, “How much money are we talking about?” He said, “It’s like
$80,000 worth of losses.” “Well, that’s a lot of money, but it’s taken you clearly at
least a week to print this stuff out.”
We realized that the way we were attacking these things was just fundamentally
flawed. So Bob and I built this system that was part visualization package,
part graph balancing tool, that would try to represent large-scale travels of
money in the system in a visual form. Taking that as a base, we built all these
different tools that would allow computers to predict where particularly expensive
losses would be and then represent the networks of losses to the investigators
in such a way that they could very quickly make a decision whether or not
to pursue a particular case.
Once we had that, I sort of had this tearful moment with one of the investigators
where she was just crying in happiness—“You don’t even understand
what you did, Max”—when we showed it to them. They were really overworked.
Once that happened, there was this huge reduction. It wasn’t like 80 percent
or anything. But, all this time, we had all these different ideas and we’d
bring the fraud down one-tenth of a percent or one-fifth of a percent, but it was
really not noticeable. Then, one day, we brought the fraud down with that tool,
a lot. So we’re clearly getting better at this.
Then a woman named Sarah Imbach went into a sort of self-initiated exile.
She moved to Omaha and first became the manager of the fraud group and
| ← prohibitive. | then eventually became → |