SEATTLE — Gov. Bob Ferguson on Tuesday signed an executive order creating Washington’s first Chief Fraud Prevention Officer and a statewide workgroup aimed at strengthening and coordinating fraud prevention efforts across state government.
Ferguson also announced he plans to request legislation in the upcoming legislative session to expand the state’s Medicaid False Claims Act to cover all false claims against Washington state.
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“Washington takes fraud seriously,” Ferguson said. “As we continue to face challenging state budgets and devastating cuts from the federal government, it is more important than ever to protect every dollar. My executive order unifies our prevention efforts across state government and expands them.”
The new Health & Human Services Chief Fraud Prevention Officer will…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.