5/11/2011
1
The Issue of The Issue of Electricity TheftElectricity Theft
Applications for CFEs
Presented by: Johnnie Huneycutt CFE, CPP
AgendaAgenda
• Slides 1 through 8 = Potatoes
• Slides 9 through 21 = Meat & Potatoes
• Slides 22 through 25 = Meat or Vegetarian Delight
Electric & Gas Industry Electric & Gas Industry StatsStats
• Approximately 3,275 currently regulated Electric and Gas entities in the U.S.
• Divided into – Investor owned – publicly owned –Cooperatives – and Federal utilities
• Investor owned Electric utilities (about 6.5% of total U.S.) = $253 Billion in Revenues & account for 65% of all power production and serve approximately 71% of ultimate consumers.
• TECO ENERGY = Investor owned 3.5 Billion – Approx. 675,000 electric and 1 million total for electric and gas customers.
From Fraud MagazineFrom Fraud Magazine
TEC Departments TEC Departments Thefts and Fraud Common to UtilitiesThefts and Fraud Common to Utilities
• Copper Theft & Electricity Theft
• Customer Representative / Billing schemes
• Credit card Payment fraud & ID Theft
• Customer Credit policy related fraud
• Debit & Credit card fraud
• Purchasing & Contracts Fraud
• Employee theft issues
• Ethics & Compliance issues
5/11/2011
2
Role of Corporate Security at TECRole of Corporate Security at TEC
• Security Consulting
• Emergency Management
• Workplace violence
• Investigations o Crimes Against Company
o Internal Thefts / Fraud
o Due Diligence
o Incident handling
o Liaison with Risk Mgmt.- EEOC- H/R & Revenue Protection (Electric Theft Group)
• Guard Force Management
• Executive Protection
• Security Compliance & Cyber Security
Role of the Corporate Role of the Corporate InvestigatorInvestigator
• Have a comprehensive knowledge of the Corporation and its assets
• Have a thorough understanding of Risk, Liabilities, and Mitigation strategies.
• Effectively provide viable security solutions on behalf of the Corporation.
Electricity Theft Electricity Theft -- A Global ProblemA Global Problem
• World wide problem
• Often called “line loss” – no exact means to measure
• Is both “Commercial and Residential” problem
• 2 general means of theft – before Meter and at Meter
• Generally prosecuted as a misdemeanor
“Trespass and larceny with relation to utility fixtures; in most states. - Florida FSS = 812.14 (2) (C)
Any person who willfully violates paragraph (2)(a), paragraph (2)(b), or paragraph (2)(c) commits a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
Common Common motivations aremotivations are: : CresseyCressey Fraud TriangleFraud Triangle
• Justification /rationalization “Company is so big / should be free”
• Opportunity – meter usually on the back of house – out of sight
• Needs based – Can’t afford it -common for low income & residential
• 50 % er’s - if not for free – I will pay half – but that is all!
• I have a grow house and don’t want to be detected by extreme use
Marijuana Inc.Marijuana Inc. Indoor Hobby Indoor Hobby
5/11/2011
3
Some BudsSome BudsMy Best Bud !My Best Bud !
Single timer Single timer –– Multiple Multiple lights lights
Multiple TimersMultiple Timers
Elaborate Relay PanelsElaborate Relay Panels Tap in front of Meter Tap in front of Meter
5/11/2011
4
Some Dangerous Some Dangerous SituationsSituations
Stolen meter / switching meters Stolen meter / switching meters
(50%)(50%)
Remote Switch to turn off Remote Switch to turn off and onand on
wire / hole in glasswire / hole in glass
Price of Admission for Price of Admission for One Crime!One Crime!-- 10K10K Industry ResponsesIndustry Responses
• Automated / Remote metering
• Specialty locking rings & other tamper resistant devices
• Specialized training – ie. Law enforcement type
• Specialized teams of personnel within the utilities
• Media attention
• Smart Grid Technologies
• Electric Theft organizations (Furpa – Surpa)
5/11/2011
5
Impact for CFE’sImpact for CFE’s
• Confrontational interactions
• Knowledge of Statutes – applicable laws
• Interview & interrogation techniques
• Discovery and rules of evidence – real & forensic
• Reliance on law enforcement
• Liaison with States Attorney
• Case management & investigation reports
• Court proceedings & presentations & testimony
• Restitution claims & judgments
Questions