Needles in Stack of Needles: Detecting Tax Fraud & Evasion Through Big Data
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Transcript of Needles in Stack of Needles: Detecting Tax Fraud & Evasion Through Big Data
Copyright © 2014, Oracle and/or its affiliates. All rights reserved. 1
Needles in Stack of Needles: Detecting Tax Fraud & Evasion Through Big Data
Hong-Eng Koh Global Lead, Justice & Public Safety (JPS) Oracle Corporation Vice President (Corporate) The Society for the Policing of Cyberspace (POLCYB)
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The Safe Harbor
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
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Customer & Partner
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Customer & Partner
Industry Business
Unit
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Global Public Sector Industry Business Unit
Marcel Swart Global Vice President Public Sector & Utilities
§ Tax & Revenue § Justice & Public Safety (JPS) § Enterprise Modernization § Social Services § City Platform
§ Defense § Public Transportation § Utilities § Licensing, Permitting & Inspections
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Oracle Global Justice & Public Safety Team
Jorge Medina
Cindy Schwimer Tim Wallace
Jeff Penrose David Shepherd
Udi Nessimyan
Koh Hong Eng
Global Lead Director Industry Strategy & Marketing
Bert Oltmans
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Issues & Challenges
Tax Avoidance Tax Evasion
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Issues & Challenges
Tax Avoidance Tax Evasion
Tax Fraud Cyber Security Threats Identity Theft
Crowd-Sourcing Virtual Currency
Social Engineering
Unwilling Customer
Cloud Computing
Social Networking
Cyber Security Threats
How a Hacker Intercepted FBI and Secret Service Calls With Google Maps 27 Feb 2014
US Government Agency Compromised by Social Engineering 4 Nov 2013
2009: “Robin Sage” (The Security Blogger)!Information and intelligence obtained from US military personnel!
2011: “Emily Williams”!“What else can happen outside of data being leaked over social networks?”!
Emily Williams Social Engineering
Virtual Currency
Bitcoin is the offshore tax haven of the future
10 Oct 2013 14 Apr 14
Tax Evasion: Bitcoin Better Than An Offshore Bank
Account
7 Aug 13
Bitcoin: Tax Evasion Currency
• Unreported Capital Gains • Keep Income off the Books • Corporate Slush Funds
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What’s Happening?
http://www.go-gulf.com/blog/60-seconds
Big Data
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VOLUME VELOCITY VARIETY
SOCIAL
BLOG
SMART METER
What is Big Data?
VALUE
Data
Information
Intelligence
“Free this week for a quick gossip/prep before I go and destroy America?” “3 weeks today, we’re totally in LA pissing people off on Hollywood Blvd and diggin’ Marilyn Monroe up!”
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Detecting Tax Fraud & Evasion Through Big Data
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Completing the Broadest Solution
Oracle Tax Analytics Leading with Breadth and Innovation
• Leveraging recommendations by OECD (Organization for Economic Co-operation & Development) and EC (European Commission)
• Performance Monitoring at every level of the Agency
• Pre-Built Oracle Tax Data Model designed to integrate data from multiple sources
• Data to analyze Compliance • Data to Identify & Manage Error, Fraud & Corruption
• Oracle Database & Data Mining • OBIEE with Scorecard & Strategy Management • Oracle Data Integrator • Exadata and Exalytics certification
Integrating Data from Multiple Sources
World Class Oracle Technology
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Oracle Tax Analytics’ Pre-Built Contents Accelerate Your Implementation
Pre-built Foundational Data
Model Point
§ Store data in lowest level of detail
§ Holds history of all entities & transactions
§ Integrate data from MULITLE source applications and 3rd parties
§ Extendable § Upgradeable
§ Star Schemas: § Taxpayer
Registration § Taxpayer accounting § Collections
§ Aggregates by year, month, week, day & more
§ Aggregates by tax type, industry segment & more
§ ETL mapping
§ Predict individual debt delinquency risk based on past behavior
§ Beneish M-Score Model: business manipulating earnings
§ Altman Z-Score Model: business predicted to go bankrupt
§ Metrics & KPIs based on OECD & EC recommendations
§ For directors/ commissioners, managers & other business users
§ Perform ad-hoc analysis
§ Create reports & dashboards
Pre-built Data Models for
Reporting Pre-built
Analytical Models Pre-built Library of
Metrics
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Oracle Tax Analytics – Solution Overview
Agency Systems S
ourc
e
Sys
tem
s P
re-B
uilt
Tax
Dat
a M
odel
P
re-B
uilt
Con
tent
Motor Vehicle Department
Land / Property
Registration
Oracle PSRM Customs Banks Population
Registry … …
Facts, Dimensions and Aggregates, Data Mining Models
Entities Transactions Assets Interactions
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Oracle Tax Analytics – Great, but…
§ Fraud has already taken place, so money is gone… § Models are based on historic perspective of non-compliance § Models do not take into account the changes in behavior associated
with non-compliance § Models tend to be static and difficult to change/update § Most fraud systems deliver and overwhelming amount of false
positives
We need more than “Needle in the Hay Stack”
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A New Way – Compliant Taxpayer Modeling
§ Capture behavior in a model of a ‘normal’ compliant taxpayer § Capture relevant data – Big Data § Reflect current behaviors and profiles against the “Compliant Taxpayer”
model and the absence of good behavior is a pointer to non-compliance
Needles in Stack of Needles
You don’t know what you don’t know Endeca Information Discovery
You know what you don’t know Traditional Business Intelligence & Analytics
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Oracle Advanced Fraud Management Needles in Stack of Needles
Oracle Tax Analytics
Endeca Info Discovery Real-Time Decisions Master Data Management
Oracle Big Data Appliance
Exadata
Oracle GoldenGate Oracle Data Integrator
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What About Day Zero & Social Engineering Attacks ?
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Day Zero & Social Engineering Attacks Big Data to the Rescue
Oracle Big Data Appliance
NoSQL DB Driver
Application
HDFS, Hadoop, CDH
Map ReduceORCH -‐ Stats
Map ReduceHive -‐ Activities
Map ReducePig -‐ Sessionize
Cyber Information Discovery
Complex EventProcessing
Expert SystemDecisionEngine
Cyber Real-‐time Analysis
API/NBI SIEM/SOC
Mass Analysis\Algorithm
s Layer
Probe/Switch
LAN
Probe/switch
Real-‐time Access
Batch Processing
System M
onitoring & M
anagement
§ Cyber Intelligence § Network Behavior
Anomaly Detection (NBAD)
§ Analytics & Reporting § DPI-based Router
• Big Data Appliance • Oracle Event Processing • Real-Time Decisions • Endeca Information Discovery
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Day Zero & Social Engineering Attacks Big Data to the Rescue
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Prevention is Better than Cure
And, converting unwilling customers to willing customers
In addition to: • Document/content
management • eFiling • Single Window • Multi channel • PKI • Payment gateway • Etc.
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1. Customer Relationship Management (CRM)
• Siebel Case Management
Examples: • Australian
Taxation Office • New Zealand
Inland Revenue Department
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2. Remove the Complexities Natural Language Taxation Policy Management
• Oracle Policy Automation Source Tax Policies Tax Policies in OPA
Examples: • Angola • Hungary • Netherlands • Kuwait • Mozambique • New Zealand • Qatar • Sweden • UK • USA
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3. Social Relationship Management (SRM)
§ Engage the community as part of community policing
§ Better understanding of public sentiments
§ Improve crime analysis over social networks
§ Early detection of suspicious activities and crime suspects
§ Incorporate new techniques in crime investigation process
A Federal Police Agency in Latin America
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Back to the Two British Tourists…
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Automated Targeting System (ATS)
§ Rules based decision support system § Data sources: government and public § Historical data and trends analysis § Deployed for air, land and sea travel § Massive volume of data § Identify high risk targets § Faster clearance for low risk traveler/
cargo
US Customs & Border Protection National Targeting Center
Source: Internet
• Exadata • Exalogic • Exalytics
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Parts versus Engineered Systems
Big Data Appliance
Exadata Exalogic
• Exadata • Exalogic • Exalytics
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