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Sniffing out Skunks


Conan C. Albrecht

Conan C. Albrecht

Conan C. Albrecht (BS ’97), associate professor of information systems, is catching bad guys.

Well, at least vicariously—through his fraud-detection system, Picalo. Albrecht spent the last three years implementing the system in India. The World Bank, which finances India’s health-care program, recruited Albrecht for the job.

“Previous [World Bank] administrations had an understanding that, when operating in the Third World, there was going to be fraud,” says Albrecht. “The World Bank has since put out a no-tolerance policy . . . if they find serious fraud in a country, they will pull funding. That’s huge.”

When Albrecht arrived on the scene, India was losing millions of dollars to fraud in its bidding system for medical supplies. In some instances, one company was coming in with the lowest bid every time—a red flag that it was getting inside information. Shell companies won bids, then subcontracted the work after taking a cut off the top. There was collusion, bribery, and the list goes on.

“The second you close one hole, they’ll look for another,” laments Albrecht, who would know—he has detected fraud for the United Nations, the U.S. Iraqi Reconstruction Group, and several major corporations.

Working with Indian government officials, he created a central database that processes every bid. Equipped with Picalo, the system will eventually screen for 200 fraud indicators.

“It’s much like what a doctor does,” Albrecht explains. “If you go in with a stomach ache, the doctor is not going to immediately prescribe you medicine. . . . Only when multiple symptoms point to the same thing will he diagnose the problem.”

Picalo searches for symptoms of fraud through “detectlets”—mini applications that run specific fraud-detection routines. The detectlets are algorithms written by Albrecht, his students, and programmers around the world; as open-source software, Picalo is free to anyone, anywhere, to contribute to and use. The government of North Carolina now employs the system, and several countries in South America and Southeast Asia have expressed interest in Albrecht’s research.

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