Haywood Talcove, CEO of LexisNexis Risk Solutions’ Government Group, said the public sector experiences fraud at a rate of about 20 percent compared with about 3 percent in the private sector.
At a House subcommittee hearing on Wednesday, Talcove attributed the disparity to the federal government’s inability to use the tools employed in the private sector.
“Front end identity verification, self-certification, and then finally, making sure that individuals are who they say they are. If we start using these tools, you will see the fraud rate go down dramatically because for the most part, this fraud isn’t taking place by real individuals. It’s individuals whose identities have been stolen on the dark web,” he told lawmakers.
Criminals “use that information pretending to be somebody else. And because of the antiquated systems, processes and technologies in place in government programs, they were able to steal at scale,” Talcove added.
During the hearing, he agreed with Rep. Marjorie Taylor Greene, R-Ga., that the federal government never addresses its issues with data theft and stolen identities “because it can’t be forced to go out of business.”
“One of the things I noticed during COVID was that criminals learned that government was the mark because it never runs out of money … and the likelihood of getting caught is virtually zero,” Talcove noted.
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Digital Matching
The three-time Wash100 awardee touched on the issue of digital matching and the need to update the 1974 Privacy Act.
“These aren’t people problems. These are technology problems. You can’t process the number of individuals that are accessing our systems person by person. It just takes too much time,” Talcove said during the hearing.
“So, by updating the 1974 Privacy Act and allowing for digital matching, you would very quickly realize that a large portion of the PPP loan funds were going to the wrong person. You would have been quickly able to match, I think the number was 20%, and were on the do not pay list. You can’t expect people to do what a machine and especially AI can do today,” he added.
3-Step Plan to Reclaim Control of Federal Payment Systems
The chief executive suggested a plan outlining three measures to prevent fraud and abuse of federal payment systems.
“There’s no excuse for the government to lag if we do the following. Number one, implement identity verification on the front end. Criminals should never receive a dime. Eliminate self-certification. No more honor system for billion-dollar programs. And continuous auditing. Keep verifying because criminals never stop adapting,” Talcove stated.