#10614 min
FRAUDFORWARD
#107Inside Deconflict: Bridging Law Enforcement and Banking
What’s up fraud fighters, and welcome back to Fraud Forward!
In this episode, I’m sitting down with Mudassar Malik, Special Agent with the U.S. Secret Service and Founder and CEO of Deconflict.com, to talk about something our industry needs to get a whole lot better at: financial crime deconflict.
Money mule networks do not care where one institution’s visibility ends and another one begins. Pig butchering scams, romance scams, business email compromise, BEC fraud, account takeover, wire fraud, they all move across people, accounts, institutions, platforms, and jurisdictions. Meanwhile, too many of us are still trying to solve pieces of the same case from opposite sides of the wall.
Mudassar walks us through what happens when law enforcement and banking actually have a better way to connect investigative intelligence, share what they are seeing, and recognize when different teams may be looking at the same financial crime pattern from different angles.
This episode is not about sharing everything with everybody. It is about better fraud response, better financial crime intelligence, and better collaboration between the people who are already fighting the same criminal networks. Because if a credit union, a community bank, a larger institution, and law enforcement are all seeing pieces of the same mule activity, but nobody can connect those pieces fast enough, the criminals keep moving. And the victims keep paying for it.
What you’ll hear in this episode:
- Why financial crime deconflict matters for banks, credit unions, fintechs, and law enforcement
- How the Deconflict platform helps connect investigative intelligence across financial crime cases
- Why money mule networks, pig butchering scams, romance scams, and BEC fraud require cross-institutional visibility
- Where 314(b)d information sharing fits into the larger fraud response conversation
- Why financial institution fraud prevention cannot stop at the edge of one institution’s data
- How law enforcement data sharing can help fraud fighters move from isolated cases to connected intelligence
- What teams can take back to think differently about collaboration and case escalation
You should listen to this episode if you:
- Work in fraud, BSA, AML, investigations, or financial crime intelligence at a bank or credit union
- Are trying to improve financial institution fraud prevention without adding more disconnected alerts
- Support fraud response for scams, mule activity, business email compromise, or suspicious account movement
- Want a better way to think about law enforcement data sharing and investigative collaboration
Episode notes:
Financial crime deconflict helps teams see the shared pattern
Most financial crime investigations start with a wire, an account, a victim story, a suspicious transaction, a member sitting across from you, or a case that feels familiar but not quite connected.
Financial crime deconflict is about connecting those pieces before they stay trapped inside separate investigations. If one institution is looking at mule activity, another institution is seeing business email compromise, and law enforcement is seeing a romance scam. The real question is: how do we know we are not all working the same case in isolation?
That is where a Deconflict platform gives fraud fighters and investigators a way to identify overlap, coordinate more intelligently, and move faster when the same financial crime pattern is showing up in multiple places. When teams build better pathways for investigative intelligence, they can start seeing more of the picture before the damage spreads.
Law enforcement data sharing can speed up fraud response
Fraud response is a race against movement. Once money is gone, every hour matters, every handoff matters, and every delay gives criminals more room to recruit new mules and shift the pattern somewhere else.
When financial institutions and law enforcement can connect around the right information, at the right moment, with the right controls, it becomes less about one institution chasing one transaction and more about identifying the network behind the activity.
A single case may involve a suspicious account, a mule account receiving funds, a BEC fraud pattern that touches multiple institutions, or a scam where the emotional manipulation started weeks or months earlier. This is not about replacing human judgment. It is about giving the people doing the work a better way to find each other when their cases are connected.
314(b) information sharing belongs in the collaboration conversation
314(b) information sharing allows participating financial institutions to share information with one another to better identify and report potential money laundering or terrorist activity. In fraud investigations, many scam and mule patterns have financial crime overlap.
Money moves. Accounts connect. Victims are targeted. The practical takeaway is this: collaboration needs structure.
Fraud fighters need clear procedures, trained staff, legal and compliance alignment, documented controls, a shared understanding of what can and cannot be exchanged, and a way to connect investigative intelligence without creating unnecessary risk.
Fraud investigation platforms should help teams connect, not just collect
Fraud fighters need connection. Can the platform help teams understand whether activity touches another investigation? Can it help law enforcement and financial institutions identify overlap? Can it surface a shared pattern across money mule networks or scam typologies without making investigators manually stitch everything together from scratch?
That is the bigger value of a fraud investigation platform built around deconfliction. It is not just another place to put case notes. It is a way to make investigative intelligence more actionable.
Teams have already spent years improving detection inside their own walls. But the next stage is bigger than one institution’s queue. Criminals already operate across institutions. Fraud intelligence has to get better at doing the same responsibly, with the right controls and guardrails.
What fraud teams can take back Monday morning
If you are listening to this episode and wondering where to start, start with the questions.
Bring this conversation back to you fraud, BSA, AML, risk, and investigation teams. Ask when your team knows a case may connect to another institution or law enforcement investigation. Ask how law enforcement outreach works. Ask whether your team is using 314(b) information sharing and whether staff understand the process.
Then look at the scam typologies showing up most often: money mule networks, pig butchering scams, romance scams, business email compromise, BEC fraud, or something else. Where does fraud response slow down because the team cannot see enough of the network? What investigative intelligence would have helped earlier?
That is the Monday morning work. Not fancy. Not theoretical. Just honest. Because fraud prevention is customer service. It is victim support. And increasingly, it is shared intelligence.
Key takeaways:
- Financial crime deconflict helps fraud fighters, financial institutions, and law enforcement identify when separate investigations may be connected.
- Fraud intelligence sharing matters because criminals move across institutions faster than most organizations can coordinate.
- Law enforcement data sharing can help teams respond faster when funds are moving through mule accounts, crypto wallets, or multiple financial institutions.
- 314(b) information sharing needs clear procedures, trained staff, legal alignment, and documented controls.
- A Deconflict platform can help investigators surface overlap, connect related cases, and make investigative intelligence more actionable.
- Money mule networks, pig butchering scams, romance scams, business email compromise, and BEC fraud often require cross-institution visibility.
- Fraud investigation platforms should help teams connect intelligence, not just collect case notes.
- Financial institution fraud prevention is moving beyond one organization’s queue toward responsible, shared intelligence.
- The Monday morning question for fraud, BSA, AML, and risk teams is simple: what intelligence do we wish we had earlier, and how do we build a better path to find it?
Final takeaway:
Financial crime deconflict is not just a law enforcement concept. It is a fraud-fighting mindset.
When banks, credit unions, fintechs, and law enforcement stay isolated, criminals benefit. When we build better ways to connect cases, share appropriate information, and recognize the networks behind the activity, we give ourselves a better chance to move faster and protect more people.
A rising tide lifts all boats. And in financial crime intelligence, that tide is collaboration.
Stay vigilant, stay informed, and keep moving fraud forward.
Episode resources & links:
Connect with Mudassar Malik | LinkedIn
Special Agent, U.S. Secret Service | Founder/CEO @ Deconflict.com
Connect with Hailey Windham, CFCS | LinkedIn
Host of the Fraud Forward Podcast
Banking Community Lead at Sardine
Certified Financial Crimes Specialist (CFCS)
2023 Credit Union Rockstar, CU Magazine
Continuous Improvement Award, SAFE Federal Credit Union, 2023
Top 20 Professionals Under 40, The Sumter Item, 2022
Episode transcript
Hailey
00:05
What’s up, fraud fighters? One of the biggest challenges in fraud today isn’t technology. It isn’t even artificial intelligence. And it isn’t even the fraudsters themselves. It’s communication. Every day, banks, credit unions, fintechs, crypto platforms, and law enforcement agencies are investigating fraud. Each organization sees a piece of the puzzle. The problem is that those pieces don’t always get connected quickly enough to stop the bad actors before the money is gone. Meanwhile, the criminals are collaborating. They’re sharing tactics and moving funds faster than ever. Today’s guest has spent his career on both sides of that challenge. Joining me today is Malik, former Secret Service agent and founder of Deconflict, a platform designed to help law enforcement and financial institutions collaborate more effectively around fraud investigations and financial crime intelligence. We’re going to talk about where collaboration breaks down, why speed matters more than ever, right? And what happens when we start building bridges between organizations instead of operating in silos. So, Malik, welcome to Fraud Forward.
Malik
01:14
Thank you, Hailey. Thanks for having me. Looking forward to it.
Hailey
01:16
I truly am so excited about this. I told you on another call that I went to a financial crimes working group in South Carolina, and I overheard two law enforcement agents saying, “Hey, have you heard about Deconflict?” And I was like, “Oh my God, he’s coming on the podcast. This is great.” So I’m so excited to have you here. And before we dive into it, I would love it if you could walk listeners, you know, through your background in law enforcement and financial crime investigations.
Malik
01:43
Yeah, so thanks again for having me. So I did 22 and a half years in law enforcement. The first 11 and a half, 12 years in St. Louis as a police officer, where I investigated anything from a petty theft all the way to responding to a homicide scene. And then I lateraled over to the Secret Service back in 2016 under the Obama administration, and then recently exited back in January of 2026. And throughout my whole career, one of the biggest problems and challenges I saw, even when I was a patrol officer, was information sharing, as you mentioned earlier. And that’s really where I saw the opportunity 22 years ago. And then when I came through the Secret Service, you know, a lot of people don’t know, but we have two missions. One is protecting the protectee, the president, the principals, and the other is financial crime investigations. And that is really, over the last decade, where I have spent my time in financial fraud and where I have seen these actors, how smart they are in conning and scamming people. I mean, it just blew my mind. Like, this is something you see in the movies. So living it through real life, it has been an eye-opener.
Hailey
02:49
For sure. And I love that you called that out because I can remember when I first heard Secret Service, the agency, obviously I’ve seen all the movies, and so I’m only thinking of protecting the president. So whenever they’re like, “Yeah, you probably need to reach out to Secret Service about this,” I’m like, “Why in the world would we do that?” But quickly found out that it is such a great resource too, with Secret Service and financial crime investigations with financial institutions. So I’d love to know what originally pulled you into the fraud and the crypto-related investigations over all the others.
Malik
03:23
Yeah, so when I got there in 2016, I was one of the new guys, right? And when I was a new guy, you have to do anything and everything they want you to do. And nobody really wanted to do crypto because crypto was new. Nobody knew what it was. And so my really good boss, Brian Cockrell, was like, “Hey, I’ve got this crypto investigation case for you.” And I didn’t know what it was, to be honest. And so they sent me to bunch and bunch of training, and I like complex investigations, and that was kind of my, like, okay, this is something different. This is not your standard, you know, bad check where you just walk up to the bank, speak with the manager. This was a little bit more complex than that. People are hiding behind computers, behind keyboards, and doing these types of investigations. And even though Secret Service put me through some phenomenal, one of the best trainings in the world, there’s always that thing that you’re like, okay, well, there’s always more to learn. And what I did was during, you know, I’d go to the gym or what have you, and I would always watch these YouTubers talk about crypto, and nothing about fraud, but just what crypto was. What’s a hash? What’s a transaction ID? What are gas fees? What’s a hot wallet? What’s a cold wallet? And that’s how I kind of learned everything that I know about crypto today. And obviously, when I was in St. Louis investigating these crypto cases, I would often come across local police officers always reaching out, “Hey, I’ve got this crypto case. I’m stuck here. Can you help me?” And that’s really how I developed everything that I know about crypto through Secret Service and obviously through self-learning. And I was able to pass information on to my local agencies when I was in St. Louis.
Hailey
04:57
That’s so fascinating. And also, it’s like we have more things in common than you think, because I also, that’s how I got into fraud, was nobody else wanted to do it. I was the new girl in the office, and they were like, “Here, you do this because we don’t want it.” And then I just fell down the rabbit hole and loved every bit of it. During your time with Secret Service, were there any types of fraud trends that were escalating faster than others that, you know, really made you think, gosh, we’ve got to do more?
Malik
05:27
Yeah, I think pig butchering was probably number one. I remember my very first case. I got a call from this home builder that said he met this beautiful Asian woman. And it was Christmas Eve, he gets a random text saying, “Do you invest in crypto?” or something ridiculous like that. And he responds back. I mean, of course, as law enforcement, we tell everybody, hey, don’t respond, just delete it, right? But he responds back, “I don’t, but my son does.” And that was her hook. And she got him for $750,000. But by the time we got involved, and this is very standard within at least my cases, we’re almost like four months behind on average. They build that relationship. They con you as much as they can. They, you know, quote unquote, milk you as much as they can for the pig butchering. And when he went to withdraw his funds, typical standard, he gets a pop-up: IRS is requesting you put another 10% in. He puts another 10% in to get his $2 million out because he was up so much in four months. And yeah, and then she continues to ask him for more and more money. He’s like, “Well, I think this is fishy.” Then he contacts us. But by that time, you know, we traced the funds. It was over in China. Money was long gone, and we’re four months behind at this point. And, you know, we had all the tools that we possibly could, but it wasn’t about the tooling, like you mentioned earlier. It wasn’t about AI. It was like one human was lured into something to believe that he was investing into a company that was going to 10x his income. And being a home builder, that’s, you know, he was like, okay, yeah, let me see if I can make more money on the side. And unfortunately, he lost $750,000, $800,000 in that one instance.
Hailey
07:08
I hate that so much. I can remember my time with Operation Shamrock where I was on the victim calls, and those were some of the hardest things to listen to. And you’re exactly right. We are always four months behind. When I would do my training for frontline, it was, you’ve got to remember, we’ve got 10 to 15 minutes to try to change what they’ve had poured into them for the last four, six, 12 months. Right. And so it’s almost like an impossible task.
Malik
07:38
Yeah. I had a case where the victim, she cursed me out and hung up the phone on me because I told her she was being scammed. She said, “No, I FaceTimed him. He’s the guy. You know, you don’t know what you’re talking about.” And so it was actually her daughter who reached out to us and said, “Hey, can you please help my mom?” It actually started off as a credit union, contacted us saying, “Hey, we believe this is some sort of a scam. If you can help us.” So we spoke with her initially. She hung up on us. She thought we were scammers. And then the bank got her daughter involved. So I spoke with the daughter, and I said, listen, this is what I do for a living. Based on what you guys are telling me, it appears to be, you know, a pig butchering scam or romance scam, excuse me. And spoke with the mom. She cussed us out, and she hung up the phone on us. I mean, at that point, you’re like, lady, I don’t know what else I can do for you.
Hailey
08:30
Yeah.
Malik
08:31
And then she never contacted us back. So at that point, she had already wired a little over $100,000 to this Italian stallion in Italy who was building this rig, oil rig company, or something ridiculous. But yeah, unfortunately, we have people like that as well who think we, as the government, were the scammers and don’t want to work with us. So it’s hard.
Hailey
08:53
It’s truly hard. But at what point did you realize that communication gap between organizations was becoming a major problem?
Malik
09:04
Well, I’ve known that for years, right? It’s from my days as a patrol officer. When I got to the federal government is when I really saw it happening. It’s like I worked on multiple cases, and I’d get a call from the FBI. “Hey, we’re targeting the same individual or same network.” DEA, yeah. I have a real good friend of mine over at DEA. I’m like, “Hey, dude, we’re watching this target.” Although DEA does drugs, we’re not, you know. With Secret Service, the one thing I absolutely loved is, like, you could work really any case that you wanted to work as long as you could tie some sort of nexus back to money. And what doesn’t touch money? Everything touches money, right? So then it became upon you as the agent, as the investigator, what you wanted to do. Even me, like, you know, 20 years in, I still had that cop mentality in me, like, hey, let’s go lock up these bad guys. And so I was involved in anything and everything that cops called me on. It could be a small case or a big case. Like, I was, let’s do it.
Malik
10:01
And so that’s just my personality. This is who I am. And so when this thing happened, with nobody sharing information, I was like, there’s got to be a better way. So then I built, back in the day, it was called Verify Wallet. We rebranded to Deconflict. We’re like, what if we built a platform that allowed you as the investigator to share only the case details that you felt comfortable sharing, but enough to where, Hailey, you and I can know what we’re working on as law enforcement officers? And then we can de-anonymize some of that information. And with your consent, we share that information to the banks and the financial institutions and the fintechs and the cryptos of the world so they can make a much better decision instantly. So, for example, the way Deconflict would work, law enforcement agency would come, they would flag a crypto wallet along with, you know, my contact details. And if the institution sees it, instantly they’re like, let me stop this. Let me stop these funds and contact the officer or the agent who reported it. And then they can work through the legal processes, whether it’s a freeze letter or subpoenas or whatever, and try to get the money back to the victim. But before us doing this, really nothing like this existed. And so we truly believe information sharing is probably one of the biggest hindrances in law enforcement and the finance sector because everybody’s siloed. Nobody wants to share anything. So we wanted to build a platform that allowed you to share as much or as little information as you wanted. And obviously with AI, we can do a lot more now. So you can report, you know, literally a couple of data points, and we can take it from there and build this nice, beautiful contextual information for the financial sector so they can make a decision which otherwise they would not have known. Or allow the bad actors to withdraw those funds, and now the Secret Service or the FBI or your local PD is sending you a freeze letter or, you know, hey, who owns this record or who owns this account? By the time it’s too late because a bad actor is already gone, especially with these money mules. There were cases we’d work where our money mules were homeless people. You know, these bad actors would pay them $100 or buy drugs or buy liquor to use their identity to even open up a KYC, right? Know your customer. And they would use their IDs to open these accounts to commit fraud. And as law enforcement, we’re really going after, quote unquote, the homeless guy who has zero idea what crypto even is. Right. So, yeah.
Hailey
12:07
One hundred percent. I’ve even seen, I’m hoping to have him on here one day, but Shane Ensminger from Kentucky, he worked with some other investigators, and just specifically for the homeless things. They went around and they gave out get-out-of-jail-free cards. And it was basically, if anybody walks up to you and they try to get you to open up an account or try to get you to cash a check, like, we will pay you for those checks. Don’t do this. Like, come to us, call us. And so it worked out really well. So I’m hoping to have him on, but it just shows truly, like, this is all over, right? It’s not just in your area. It’s not just in my area. It’s everywhere. There was also, you know, just for the listener’s sake, because I love to tie it to real-world experiences and stories, there was a story that you shared with me about a particular bank that you mentioned, where relationships and timing made all the difference in freezing the account. Could you tell us more about that story?
Malik
13:01
Yeah. So our bad actor was in Mexico. He had conned a law firm in New York and in believing them to believe that he was suing a company for infringing on his IP. And they were going to get $534,000, and they would hold it in their escrow account. The attorneys would hold it in the escrow account, take their fees, and transfer the rest of the funds back to Mexico. What this bad actor did was, it was a BEC, business email compromise case. He got in through a phishing link to one of the local truck owners, truck dealers, and he watched their communication over four to six months. And when the transaction came through saying, okay, we’re going to purchase this truck, it’s a big construction truck for $534,000, he went in and responded back as a follow-up email saying, “Hey, don’t send the money to this bank. Instead, send it to this large bank.” And luckily, I had really good relationship with this large bank. And I picked up the phone after I did all my investigation. I picked up the phone. I called the investigator. I said, “Hey, is there money here?” And he said, “Yes, millions of dollars.” Okay. So once he told me those millions of dollars, we immediately sent a freeze letter, and they froze the entire account. Now, what this bad actor did, he was able to already withdraw the funds because we were, again, like I said earlier, four months behind. So by the time we got the call, we were so far behind. And this was actually a prominent law firm in New York. So that wasn’t making sense to me. I’m like, why would a prominent law firm be part of a fraud? But after the dust settled, that’s what we realized. What he did was he opened two separate accounts, one in Mexico, one in New York. Told the New York law firm he’s suing this company for the IP infringement. They’re going to get $534,000, which was stolen from the trucking company. Law firm gets the $534,000. They keep their cut and transfer the rest of the money back into Mexico. So my trace went through the law firm, seeing their account was the one that received the funds. So we froze that account because that was my bad actor account. But once the dust settled, we realized that the bad actor had already, the law firm had already given the money back to him and keeping their cut. So that is, if I had not had that relationship, I would have gone through at least another two or three weeks’ worth of work to get the paperwork through the legal processes to him. But just that one phone call, I had really good relationships. He was able to hold the account, and then we worked through the legal processes and got everything else that we needed. But that is like, I think, the missing piece here is like, we just don’t share information. We don’t talk to one another. And I think that is like the biggest hindrance in fraud, in my opinion.
Hailey
15:43
I so agree. You’re preaching to the choir right now, don’t worry. So I think the main point too is that the relationships, right? That fraud investigations today still rely very heavily on relationships and trust between people. Why do you think relationships matter so much in fraud response?
Malik
16:04
I think without having a full picture, without having relationships, like nobody wants to share information. Everybody’s like, you know, from the banking sector, there’s a lot of rules and regulations and policies. They can’t share stuff for legal purposes. And we totally respect that. And then from the law enforcement perspective, we’re like, no, tell us everything because we’re law enforcement. And the banks are like, no, we can’t tell you anything without a legal subpoena, a freeze letter. So I think having those relationships, you should be able to at least do your job where you’re not violating any rules and regulations. You’re still following the law. And I think we should. But having those relationships, like, it should not be illegal for me to pick up the phone, call Hailey, and call you and say, “Hey, is there money in this account?” And you’re, “Yes, Malik, there’s money in this account,” because you trust me enough. I’m not doing it just to do it, right? And then I follow up with my legal request. I can then pick up the phone, call the prosecutor, like, “Hey, I just spoke with Hailey at Bank of America, and she said, yes, there’s millions of dollars in there, and my bad actor deposited money in this account, and I need a subpoena as an exigent circumstance.” And they can be like, okay, cool, here you go. Right? We should be able to have those types of relationships. But unfortunately, we don’t.
Hailey
17:06
Yeah. And I think that, you know, relationships can only take us so far. So I’d love to talk about the broader communication challenges that you’re seeing between financial institutions, law enforcement investigators, you know, why those gaps are creating opportunities for fraudsters. So from your perspective, where does collaboration break down most often today?
Malik
17:26
Yeah, great question. I think, from my perspective, collaboration breaks down often at the point of ownership and urgency, where no single party feels fully responsible for pushing information across organizations quickly. I think going back to earlier, like, there’s a lot of rules and regulations in place to where everybody feels afraid. They’re like, well, this is, I don’t want to touch it. This is not my problem. Or let me get somebody else involved. And unfortunately, that second person you got involved doesn’t want to own it, doesn’t want to take responsibility because they are afraid to make a wrong decision and potentially get fired or reprimanded. And so they’re like, okay, well, just send me a subpoena or send me a freeze letter because that’s how we’ve always done it and that’s how we’ll do it.
Hailey
18:08
I agree. Yeah, it’s kind of the out of sight, out of mind. Like, I don’t know about it. It’s not a problem that I have to worry about. What do you think about financial institutions? Like, what are they missing when it comes to fraud intelligence sharing?
Malik
18:21
A consistent information flow, data quality, having those relationships. I mean, banks are always like the first ones to, you know, get those deposits, and then the law enforcement’s always behind. But if we had some sort of communication layer between the two parties where everything’s happening in real time or near real time, I think that would go a long way. So I think having consistent information would definitely help.
Hailey
18:42
I agree. So I’ve sat in the practitioner role of the financial institution and having to look and going, if I could only see the other side of this transaction, I’d do so much better with my knowledge, right? I’d be able to determine, hey, no, this is suspicious because this isn’t going to purchase a puppy dog. This is going actually, you know, just another wallet, or this is going somewhere else. You know, so being able to have both sides, I totally agree. The other question I have is, how often were you seeing multiple agencies, like, unknowingly investigating the same targets?
Malik
19:15
It happens fairly often. Just recently, actually, I think I did a post on LinkedIn, we had nine agencies, nine victims, nine different states targeting the same individual who was in Nigeria. Right? This is like one of our smaller investigations, believe it or not. I think our largest one, at least within the Deconflict platform where I’ve seen, it was 30 agencies across like 15 or 16 different states. They were all investigating this extremely well-known Georgia prison gang in Georgia, right? But nobody knew that. So we’re leaving so much information just like in silos. That frustrates me so much. It’s like maybe I’m not a good investigator, but I may have the lead that could solve the case. Right? So that is like, I’m like, just give some information. Like, you don’t share everything. You don’t share your secret sauce. We get it. But some information you can at least speak with, communicate with this investigator. Because your lead may be the lead that actually solves this problem. We had one case, I can’t get too deep into it, but I’ll just leave it at, like, it was tied to a homicide investigation.Okay. So, I mean, you just don’t know what this particular lead could help other investigators ultimately.
Hailey
20:27
So true, so true. Yeah, I just think back on other cases where I’ve had multiple agencies that came to the bank, and they were like, “Hey, we’re looking for this.” And I’m like, “Really? Because FBI just left. So yeah, I mean, I’ll share it with you, but obviously you’ve got your subpoena, but you might want to reach out to those guys because they’re also working something on this.” I think I know the answer to this question, but I’m just going to ask it for argument’s sake. But do you think fraudsters collaborate more effectively than the organizations trying to stop them?
Malik
20:57
Yeah. One hundred percent. I mean, listen, they have every, you know, Snapchat, Signal, WhatsApp, Telegram, I mean, you name it, right? They’ll exploit everything, including dating apps, to share information. Okay? That’s how sophisticated these people are. I had one suspect, he was using Grindr dating app, right? This is their network. They’ll pay the, you know, whatever, I don’t know whatever Grindr costs, but whatever their premium fee is to get those unlimited messages. They will do anything and everything to escape. But unfortunately with law enforcement, I wish, I just wish our government did a much better job at this. Like, allow us to kind of spread our wings a little bit. You know, but listen, we can play within the rules, within the Constitution, but allow us to do our job effectively. And I think that’s where a lot of frustration becomes from law enforcement officers. Like, I spend two months, three months, six months, eight months doing this job, and then just because, you know, I didn’t have a period at the end of the sentence, they’re going to throw the whole damn case out. Like, it’s just so stupid.
Hailey
22:05
Yeah. No, I agree. We do need to have our guardrails, but we need to have kind of, kind of flexible a little bit so we can actually get some work done. Do you think crypto has accelerated the speed problem for investigators and banks?
Malik
22:21
Oh yeah. One hundred percent. I think the biggest problem, at least what I am seeing when I’m speaking with law enforcement officers pretty much on a daily basis, is the lack of education. They don’t know where to go. They’re like, they’re calling their local Fed, you know. And even though as much money as federal agencies have to spend on education, you still have a lot of investigators within the federal government that don’t understand crypto, right? And then you have a lot of local law enforcement, state, local, they reach out all the time and it’s like, hey, this is my first crypto case. And honestly, it’s not their first crypto case. It’s the first crypto case they’re investigating. I have also seen, it frustrates me, and I’ve called a lot of the officers out on this, they’ll go there and they’ll say, “Hey, no, this is a civil matter.” Like, no, it’s not a civil matter. Because they scammed this individual under the pretense of this is an investment or this is a romance, whatever. Even if he or she voluntarily sent them the money, it doesn’t make it a civil matter. This is a criminal matter. We need to investigate it. And I think a lot of it comes back to, like, if I knew what I was doing, if I had the tools and the training in place, I could do my job effectively. I think a lot of the agencies are still under the illusion that, oh, this is not, I don’t have this problem in my town.
Hailey
23:34
Yeah. And by the time law enforcement identifies where funds have landed, how often is the money already gone anyways?
Malik
23:41
Oh my God, yeah. It’s rare. I mean, I think dumb criminals are the ones, I think there’s a saying in law enforcement: we only catch the dumb ones. And it’s so true because the smart ones, you know, they have withdrawn the money. In the majority of my cases, again, going back to the four-month timeline, the money was long gone. Like, I’m trying to play catch-up. Did we seize money and recover some funds? Yes. But ultimately our success rate is very, very low. And it sucks. I wish we were, you know, in a 90 percentile in terms of winning, but we’re not. And it’s just, we just need to do a better job in law enforcement and training law enforcement officers. But then also, we need to train the public better because ultimately we can’t just say, hey, it’s law enforcement’s job. Because if the public is also undereducated, then that’s a problem as well, right? So I think we all have to work together, like from law enforcement to the banking sector, and then passing the information on to the citizens, the community members, saying, hey, this is fraud, especially our elderly community, right? Like, my parents are getting older and stuff, and I’ve told my mom and my dad a million times, like, hey, somebody calls me saying I’m in a wreck or something, just hang up. Okay, call my wife, right? And ask her because her number is unlisted and we have a separate number for families. But like, yeah, just hang up. You know, so my wife’s grandpa, John, he was scammed. You know, it was a couple thousand dollars, but he’s on Social Security, so he has, you know, very low income as is. But they called him as IRS agents and said that he had to go to Walmart and buy these Google gift cards and send them $1,500 or $2,000, whatever it was. And he was so embarrassed, and he wouldn’t talk to anybody for a while. And we’re like, what’s wrong with John? And then his daughter, my mother-in-law, he ended up telling her he couldn’t, you know, buy groceries or something. I forget the whole story, what he couldn’t pay for something. And so he’s asking her to borrow money, and she’s like, “Yeah, sure, but did you not get your Social Security check this month?” or whatever. And that’s when he told her, “Hey, IRS called me, and I had to give him $1,500,” or whatever it was. She goes, “Why would IRS call you?” And anyways, but yeah, unfortunately he was scammed.
Hailey
25:48
I hate that so much. And it’s also one of the things that I think when we look at this, it’s like scams are no longer just fraud losses, right? We have to make sure that we handle these with empathy while still operating those effective fraud programs.
Malik
26:05
Yeah, yeah, yeah. I agree. I agree. [Ad Break (26:14): Finally, I’m so happy to share with you all that the Saturday Fraud Strategist is now a podcast. On top of my weekly newsletter, you could now listen to and watch me talk about, hopefully, your favorite topic. Fraud strategy. And from time to time, I’ll be hosting operators and founders to discuss where the industry is headed and what we fraud fighters should pay attention to. I must say, I’m super excited and if I’m being honest, a bit nervous about all of this. So I guess there’s no turning back. So if you want to join me for the ride, head over to Sardine’s website and subscribe now. Are you ready? Am I ready? We’ll find out next Saturday.]
Hailey
27:10
I’d love to get into Deconflict, right? That’s one of the main reasons why you’re here. Obviously, we’ve enjoyed the conversation so far, but I definitely want to make sure that we can learn more about what Deconflict is. And so I’d love if you’d start with, you know, what is the origin or the original idea behind Deconflict?
Malik
27:30
The original idea came from, with Deconflict, I was investigating a case six months into it. Come to find out, I got a call from the FBI saying they’re also investigating it. And it was a campaign year for me with the Secret Service, so I was constantly on the road. And I had built up a very, very good case, got the IP addresses, got the whole gamut, right? My pile was, I don’t know, I had hundreds and hundreds of evidence paperwork. And then FBI calls me. And the reason FBI called me was because the area where I was in, the prosecutors, the AUSA’s office, was fairly small. And actually, it was a prosecutor who called me and said, “Hey, do you know FBI’s working on this case too?” And I was, “What do you mean?” He goes, “They just requested a subpoena for this individual.” And I was like, “No.” So FBI and I got connected. I forget who had more lead than I did, or they had lead. Anyways, I ultimately gave the case to the FBI. I said, “Dude, I’m on travel. Like, I’m constantly gone, and you’re at home, so you can go ahead and have this case.” But that was extremely frustrating where you spend six, seven months on building up a really, really good case, and you’ve identified the individuals, and then you find out some other agency was also working on the same case in parallel without knowing. In law enforcement, that’s actually a bad thing because what we call blue on blue, it could be where him and I are going to go on the same day, same time, to kick down our door, and we’re both in civilian clothes with our badges under our shirts tucked in, and we could ultimately shoot each other, right? That’s what blue on blue is. So anyway, so that’s where it was extremely frustrating. I came up with the idea of creating a product called Verify Wallet back then. Now it’s Deconflict. It’s, why don’t we create one unified platform where all law enforcement agencies, they have to be vetted, law enforcement agency, active law enforcement agencies, can come in there, share information, as much or as little as they want. Just give us a couple of data points that we ask you for, and then we’re able to build everything upon that using AI and our own proprietary methodology that we have built over time. And so that’s really how Deconflict got started. And then it kind of took off. We launched in July of 2025. As of, you know, a couple of weeks ago, we’re over 1,300 different law enforcement agencies across all 50 states and 36, 37 different countries that are using our platform, that give us data, and then we’re able to take the data and then share it with the private sector to stop fraudsters from withdrawing those funds.
Hailey
29:39
That’s incredible, by the way. Congrats. Like, so, so amazing. I’d love to ask, in part of the traditional risk scoring, why wasn’t that enough for these types of cases?
Malik
29:51
Yeah. So from my own personal experience, I would sit across the table with my victims and I would ask them what happened. They would tell me their story. And then I would do the whole tracing, do everything else, and I would, you know, pick up the phone, call Binances, Coinbases of the world, along with a lot of banks that had crypto exposures. And I would ask them, like, hey, you know, how do you guys prevent fraud? And there’s actually a couple former Secret Service agents who work for Binance. And I’m like, “Hey, dude, how do you guys investigate? Like, tell me, how does it work on your side?” And every single time it was like, hey, we use analytics tools that provide us risk scores, and then we take that, and then we have our own internal methodologies we use to determine if something is fraud or not. And I was like, well, that’s like a half a picture you’re getting. That’s not a full story. But I’m like, well, how do you know if the victim’s speaking with law enforcement? They’re like, “Well, we don’t, because we don’t speak with victims. We work with law enforcement directly.” Sometimes the victim will email them or call them and report it to them, and they’ll, you know, open up an internal investigation. But by the time it’s too late anyways, and then they’ll come to law enforcement. So then I was like, well, that was kind of my aha moment. Like, what if we switch the model here? Like, I think risk scores have a place, but I think depending on, but I don’t think the risk scores matter in investigations, in my opinion. I think you need something a little bit more concrete than that. Because if you’re the compliance officer and a risk score comes through, and I’ve seen this multiple times happen, it says 30%, 20%, 5%, 6%, and you search the same wallet in Deconflict and it’s saying it’s been tagged by ABC PD or New York or Dallas or FBI, whatever. I mean, as a compliance officer, that’s the information that I need, right? So that is essentially what we wanted to build, and that’s what we have built. So we don’t do anything with risk scores. We don’t think they work when it comes to fraud investigations. So we think if a wallet is coming onto your platform, if you’re going to interact with it, you should know whether that has been reported as, quote unquote, fraud by law enforcement. And that’s essentially the gap that we fill.
Hailey
31:52
I love that. And would love for you to maybe dive a little bit deeper on, you know, what’s the difference between a generic fraud score and actual investigative intelligence.
Malik
32:02
Yeah. So the way the tools work today, they rely on heuristics and probabilistic risk scores. They’re machine learning models that they feed this stuff into, and then it will trigger a risk score, what we call probabilistic risk score. The difference here with Deconflict is it’s an actual true intelligence signal provided by law enforcement. So if you see a wallet in Deconflict, it’s going to have the agency and the officer’s information along with it. And then you’re able to log in and message the officer, contact him, get a lot more information from him, and then ask for the legal process, right? So the ultimate goal here is, like, how do we connect public and private sector, share information, communicate with one another? And then we kind of step back. We just make the connection, and we’ll step back. Hey, you guys work through the legal process and try to get the victim their money back. So ultimately, for me personally, we need to do a better job at protecting the American people. And that is, like, the biggest thing what we’re not doing is because we’re just working in silos. We’re relying on legacy tools that really don’t work, and ultimately the American people are paying the price for it.
Hailey
33:07
So true. So what data can be shared without exposing sensitive victim information on Deconflict?
Malik
33:15
Yeah. So from the law enforcement perspective, we share the crypto wallet that’s been flagged by law enforcement. And then we’re able to share the law enforcement officer, his government details, with the private sector. We take that, and then we build our own internal contextual information behind it. And then we’re able to share that information that’s not provided by law enforcement to the financial sector. So when the financial sector, the compliance officer, when they see this information, they know that this is 100% verified, and they can contact the officer to even verify it if, you know, they don’t have to take our word for it through the platform. That’s why we tag every officer’s name behind every single wallet that gets reported in Deconflict. So we don’t do any tracing. We’re not trying to become a better tracing tool. You can still use the tools of your choice. We are simply a data provider. We’re tool agnostic, so doesn’t matter if you have a favorite tool that you use. You can continue to use those tools. But we are simply like another search engine for you to come and index and say, hey, is this particular wallet reported by law enforcement before I allow this individual to transact? It really is no different than, you know, how we process credit cards today, right? So if I swipe my credit card in New York today and five minutes later it gets swiped in Germany, Visa is going to block it, right? So like, well, Malik was just in New York. How can it be in Germany as well at the same time? It’s kind of the same thing. With us, with Deconflict, you can search it into our platform and index it, and then if it’s been reported, contact the officer. If it hasn’t been reporte d, we don’t say it’s, you know.We’d never obviously say everything is 100% accurate, like when it comes to what we’re reporting, because we only report information that’s been reported to us by law enforcement. And then you can contact the law enforcement officer yourself and get a lot more information, whether it’s through legal processes or other information.
Hailey
34:47
I think it’s amazing. But I do ask, you know, how does this differ from traditional 314(a) and 314(b) collaboration?
Malik
34:57
Yeah. So 314(a), obviously law enforcement is requesting you to produce, you know, records, right? And 314(b), it’s bank-to-bank information sharing, right? What we’re doing with Deconflict, we’re connecting law enforcement to the banks in real time. So related to crypto cases. So law enforcement, again going back, comes to our platform. They report a crypto wallet address, right? So it’ll surface to all the other agencies that are working. It’s, hey, Malik just reported this wallet, so now all 1,300 agencies know that I’m working on a case. Maybe two weeks from now, three weeks from now, you get to find out, I also have this information on this case. Let me contact Malik directly. But what we have done is we’re also able to take that information and share it with banks. Because otherwise, the only way the banks are getting notified that this crypto wallet is bad is after the fact. So what we’re trying to solve here is, instead of allowing the bad actors, and again everything happens automatically, so there’s nothing you don’t have to do, any manual searches, don’t allow the bad actor to withdraw the funds. Don’t let the law enforcement catch up to you where money’s going to come to you first before law enforcement even gets to you, right? So if you have the money, see if you’ve been triggered in Deconflict, because one of the things we’ve trained our law enforcement officers to do is immediately report to Deconflict. The sooner they report into Deconflict, immediately we can spread the information out to everybody that’s involved. So if I’m a bad actor, I just scammed you, I go to the bank to try to withdraw the funds, the bank’s already aware, hey, somebody’s tagged it, so I’m not going to allow you to do it. So and then they can work with them and try to get that 314 information from them.
Hailey
36:22
I love that. And I love how you said before in another conversation that, you know, those requests are what they are. It’s the request-based or voluntary after-the-fact sharing, where Deconflict is more proactive. And I think that that’s so essential in what we’re trying to accomplish now with fraud investigations. We’re tired of being so reactive. It’s time to get in front of it. So I just want to call that out, that I think you’ve done a phenomenal job here.
Malik
36:50
Thank you. Yeah, we briefed the Senate committee a couple of weeks ago. We were invited to brief them on Deconflict. That’s how far the word has spread about Deconflict, where people from DC are calling us and saying, “Hey, how do we make this even better?” So I think, as we grow as a company, as we grow as a network, I think this is where everything is headed. And with the, especially with the digital assets that are coming on-chain, and, you know, right now I don’t think crypto is fully adopted, obviously we know that. But I think as more merchants, more consumers learn about crypto, want to own crypto or spend or pay with crypto, unfortunately, as the adoption increases, so will fraud. And so we are trying to be ahead of the curve. Like, how do we prevent as much or mitigate as much of it today? So when that big adoption does happen, at least we have tools and things in place to stop bad actors from harming U.S. citizens.
Hailey
37:46
For sure. And, you know, I want to kind of shift into the future of fraud intelligence sharing. You recently surpassed, I believe you now said it was 1,300 participating law enforcement agencies. First of all, again, congratulations. But what does that growth tell you?
Malik
38:01
We’re solving a massive problem, right? Law enforcement literally comes to us every single day asking for help. And we are there to help them as much as we can. My entire team is built around law enforcement or ex-law enforcement. So we speak the language. We know what you have gone through. And again, so yeah, we’re solving a massive problem for both sides of the aisle. We have a bunch of banks that reach out to us all the time, like, hey, and we’ll help them as much as we can. “Can you search this wallet?” Like, yeah, whatever. We had one reach out to us. They gave us 52 wallets, and we had 46 hits on it. Like, this is information they don’t have, right? And we want to help as much as we possibly can. I think, and again, that is what our goal is. Deconflict’s broader goal is not just one-off crypto investigations. It’s really broader. Like, we want to be the Google for fraud everything, to where you can come in there and search for banking information, IP addresses, you know, everything crypto plus, right? Because that’s our long-term vision. Like, we don’t want to, we want to solve the crypto problem, of course, but we want to, you know, solve a broader problem as well. And that’s still happening. I’ve talked to officers all the time that, you know, now I think the treasury checks are being forged. Like, we want to be known for all that stuff. Like, hey, just come in there, do a search, and see if it’s been reported. And that’s kind of our long-term goal and vision here.
Hailey
39:19
I think that’s a great goal and happy to support in any way, obviously. Where do you see that fraud collaboration heading over the next few years?
Malik
39:30
Yeah. I think especially with the GENIUS Act, with the CLARITY Act passing and the government setting up their own bunch of task force and fusion centers, I think ultimately, there will be one, my goal is one unified platform where everybody comes and uses it. And we hope to be that one. I do, as you know, I worked for the government, you know, 22, 23 years. I do think this problem can be solved much better in the private sector than the government. And the reason I say it is the government’s always under budget constraints. So when they cut something, you may be cutting something that’s vital to the whole system, right? Or when you downscale. And I think with a private company, it’s much easier to scale up and also scale down and also control it because that is your business. That is what, you know, helps everyone. So I think ultimately there’ll be, you know, one or two unified platforms, and we definitely hope to be one of them.And I think we will be just based on the growth that we are seeing. And yeah, so I think, you know, we invite all the law enforcement officers, all the fraud investigators to reach out. We’ll help you a lot. Nine out of 10 times, we help you for free. We definitely don’t charge law enforcement anything, like not a penny. And when it comes to the finance sector, we help them all the time. Like I said, I mean just recently, you know, we had somebody reach out to us, and that happens all the time. And we’re more than happy to help anyone and everyone that we possibly can.
Hailey
40:56
I think that’s very admirable. And also, it just kind of shows every fraud investigator that I talk to now that that’s kind of the way we all feel. It’s like, how can we help? Because we know that this problem is bigger than each one of our individual organizations. And so the only way to move forward is to help and to, you know, give information where they didn’t know where to go before, even resource sharing, you know?
Malik
41:20
Yeah, yep. Absolutely. One hundred percent.
Hailey
41:24
You know, before I let you go, I ask all of my guests some version of this question, and it’s, you know, if you could leave fraud fighters, investigators, and financial institutions with one piece of advice about collaboration and fighting financial crime, what would it be?
Malik
41:38
Be curious. That would be number one. Like, I think the more curious you are, the better, right? Because the more nosy you are. Yeah, no, nosy is a bad word, but like, you don’t be nosy like, hey, what’s your neighbor doing today? But nosy when it comes to fraud. Because I don’t think there’s one entity or one person that can know anything about everything, right? Or that knows everything about everything. So for me, I think education is a very big component. Like, even now, like, you know, I still read books, right? It’s just one of those things where I have to. I don’t read books just because I like reading books. I like to read books because I want to know, like, how are people doing things? Because I don’t know everything. I’ll be the first one to admit that I’m not the best investigator in the world. I’m not. I wasn’t the best Secret Service agent in the world. But I always held myself at a very high standard. And even the people that I work with now, I mean, we have that, hey, you have to be a super high standard. That would be my only advice. Just always be curious and always be learning.
Hailey
42:33
I love that. Malik, I can’t thank you enough for joining me today and for sharing your experience and your perspective. It’s truly been an honor to have you on the podcast.
Malik
42:43
No, I loved having it. Thank you for having us, or having me. And yeah, looking forward to doing this again.
Hailey
42:49
Yeah, absolutely. You know, one of the biggest takeaways from this conversation is that fraud prevention isn’t just about detection anymore. It’s about coordination. The organizations that can share intelligence, communicate effectively, and move quickly together are going to be far better positioned than those operating independently. Fraudsters have already figured out how to work as connected networks. The question for the rest of us is whether we’re willing to do the same. So thank you to everyone for listening. If you enjoyed this episode, be sure to subscribe, share it with a fellow fraud fighter, and leave a review wherever you listen to podcasts. As always, stay vigilant, stay informed, and keep moving fraud forward.
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