Software Helps With Indictment in Texas Fraud Case

Galveston, Texas — Law enforcement officials know too well that a criminal can’t be brought to justice unless a jury understands the crime. The Galveston County Auto Crimes Task Force recently encountered a criminal scheme so complex that explaining it clearly to a grand jury would ordinarily have been a difficult, day-long challenge. But with the help of sophisticated software called Watson®, the Task Force made a clear and convincing argument in just 15 minutes, securing an indictment.

The multi-jurisdictional Auto Crimes Task Force is dedicated to fighting commercial auto theft, as well as other vehicle-related crimes. Among the many things that are big in Texas, the recent reduction in auto theft is certainly a source of pride. Statewide auto theft dropped 36 percent over a 5 year period, according to the Texas Automobile Theft Prevention Authority (TATPA), which was established in 1991 by the state legislature. TATPA funds the Auto Crimes Task Force, in concert with the citizens of Galveston County.

When the Task Force presented its findings to the grand jury in this complex theft and fraud case, it was aided by the intelligence analysis capability of Watson. Watson automates the intelligence analysis process and represents findings in chart form. These capabilities saved the Task Force time and money in analyzing the data and creating a compelling presentation.
By modelling the offender’s illicit activities in Watson, the Task Force were able to generate charts automatically that clearly showed how different parts of this scheme worked in relationship to one another, explained Sergeant Mike Creech, who directed the Task Force effort. The software has more than paid for itself by bringing clarity to the Task Force’s grand jury presentation and saving weeks of work in its development, he said.

Watson helped officials on the case sort out what Sergeant Creech described as “a major paperwork nightmare.” The case involved the manager of a body shop at an auto dealership who was stealing auto parts, filing bogus insurance claims, making kickbacks to an independent adjuster, and pocketing insurance deductibles paid in cash. He would apply other customers’ insurance deductible checks to cover his trail.

The Task Force reviewed a years’ worth of financial records from the body shop, which filled two large file boxes. Investigators meticulously chronicled inventory, insurance claims and cash deductibles. They were able to trace, for example, when one person’s insurance deductible paid by check was fraudulently applied to another customer’s deductible paid in cash.

As if the sheer complexity of the data wasn’t frustrating enough for investigators, additional paperwork that would have supported the investigation was destroyed by the defendant’s internal auditor, allegedly by accident. The Task Force had to piece together the sequence of transactions in this multilayered scam using partial information.

Watson was not yet on board when the year-long investigation began, so investigators analyzed data and charted relationships among transactions manually. But the static nature of manual charting was at odds with the constant changes inherent to an ongoing investigation.

“If you’re in the middle of the investigation and you draw a chart, then every time you get new information you have to redraw the chart,” said Sergeant Creech. “It’s time consuming.”
When Watson arrived; investigators were able to automatically generate updated charts as new discoveries unfolded. Analysis time was dramatically reduced.

The Task Force chose to present to the grand jury a two-month snapshot of the case that was representative of the year-long scam. The investigative team spent five days selecting a period of activity to model. Then the investigators entered the chosen two months of data into Watson, which they used to analyze the data and automatically chart relationships among events.
Watson charts showed events and transactions in sequence, making it easy for the grand jury to understand how each related to the next, and to see how the overall scheme operated. Not only was the suspect indicted after a 15 minute presentation, but the case never went to trial. Within a week, the offender pleaded guilty to misapplication of funds by a fiduciary. He was sentenced to 10 years in prison, plus restitution.

So clear was the Watson based presentation that “the scam was right here in front of my face,” Sergeant Creech said. “Watson saved me a great deal of time trying to draw and redraw charts.” he said. “It saved my investigator time in presentation to the grand jury. And it has saved our taxpayers and our grand jurors a whole lot of headaches.”

The Task Force continues to analyze data for a wide variety of cases using Watson. Cases have ranged from using automobile license data to crack a pyramid scheme, to tracing a missing person.

The Task Force also uses Watson to do post-mortem evaluations of cases. In one case that the prosecution lost, investigators had analyzed and charted the case data manually, before Watson was available. The charts done by hand had been misleading, Sergeant Creech said. Post-mortem analysis with Watson shifted the focal point of the case.

“We wouldn’t have lost it if we’d had Watson,” Sergeant Creech said.