Food Fraud: Criminology and the Focus on Prevention
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1 Fraud: Criminology and the Focus on Prevention Roy Fenoff, Ph.D., D-BFDE Assistant Professor, The Citadel MSU Fraud Initiative 4 th Asia-Pacific International Safety Conference Penang, Malaysia October 11, 2016 Today s briefing focuses on five objectives Defining food fraud Describing how it is different from food quality, food safety, and food defense Introducing the food fraud prevention system Discussing the criminology behind the system Illustrating how it works fraud defined Action: Deception using food for economic gain Including the FDA defined sub-category of Economically Motivated Adulteration Motivation: Economic gain Effect: Economic Threat Public health Vulnerability or Threat fraud is a collective term used to encompass the deliberate and intentional substitution, addition, tampering, or misrepresentation of food, food ingredients, or food packaging; or false or misleading statements made about a product, for economic gain.
2 Security The food protection risk matrix fraud includes Prevent by Understanding the Motivation All Fraud UK, EU, GFSI, China, ISO FDA/FR Economically Motivated Adulteration Quality Safety Unintentional Action Fraud Ac Defense Intentional Motivation Gain: Economic Harm: Public Health, Economic, or Terror Counterfeiting Over-Runs Dilution Unapproved Enhancements Substitution Fraud Mislabeling Contaminant Grey Market/ Theft/ Diversion Tampering Source: Fraud Think Tank Presentation, GFSI, 2012, 2013, 2014 The problem is large and growing fraud prevention system Incidents Estimate: the global food industry loses US $30 to $40 billion annually to food fraud (MSU FFI, 2014) Horizon Scanning Manage: Detect Deter Guardian & Hurdle Gaps The Fraud Opportunity Victim Enterprise-Wide Risk Assessment Initial Screening RANK A single food fraud incident can cost 2-15% of a company s annual revenue (GMA, 2010) Prevent Fraudster Adulterants Tampering Theft Over-runs Diversion Counterfeits Dilutions Countermeasures
3 fraud prevention system Horizon Scanning Manage: Detect Deter Guardian & Hurdle Gaps Incidents The Fraud Opportunity Victim Enterprise-Wide Risk Enterprise-Wide Assessment Risk Assessment Initial Vulnerability Screening Assessment RANK While criminology attempts to explain crime causation Crime science focuses on opportunity Prevent Fraudster Adulterants Tampering Theft Over-runs Diversion Counterfeits Dilutions Countermeasures Evaluating the fraud opportunity Established tenets of crime prevention theory guide our thinking The crime triangle identifies the basic elements that comprise any problem We must analyze and understand these elements in order to solve problems Are we disrupting the chemistry of the crime? Detect Deter Prevent Source: Center for Problem-Oriented Policing
4 Example: horsemeat in beef (EU) The horsemeat in beef crisis resulted in several countermeasures Laurence McAllister Red Lion Slaughterhouse (UK) Willy Selten Jan Fasen 14 companies throughout the EU 9 countries (Photo: Dimitar Hristov) An improved horse identification system in Europe (i.e., horse passports) Mandatory country of origin labeling for horse meat Companies Mandatory CCTV cameras inside slaughterhouses Governments Individuals along the supply chain Standards Agency (UK) Consumers Governments Companies Restriction of the Tripartite Agreement New problems emerge Incidents Counterfeit and forged horse passports were being targeted by the fraudsters So how does one obtain a fake identity document or horse passport? (Photo: Rio 2016/Alex Ferro)
5 Birth certificates can be used to obtain identity documents that give the holder access to various aspects of society Obtaining a horse passport ID ID So what does the food fraud prevention system tell us? Fenoff Report to ISO TC-247 Problems must be specifically and accurately defined The process must be data-driven The solution must be focused Assessment must be ongoing These principles can and should be applied to food fraud Questions and Comments Roy Fenoff, Ph.D., D-BFDE The Citadel rfenoff@citadel.edu
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