Plum Identity, a Granite Bay startup, offers a platform to fight fraud, waste and abuse in government programs without invading people’s privacy or keeping personally identifiable information.
The platform checks for behavioral data, anomalies and user locations to look for fraud and bots, but it doesn’t keep any of the data, said CEO Jon Coss.
“We want to bring integrity to these programs without going after privacy,” Coss said.
Coss previously founded Pondera Solutions, a 2011 startup that provided software to detect fraud in state government programs. Folsom-based Pondera was acquired in 2020 for $125 million by business information provider Thomson Reuters Corp. (NYSE: TRI) in one of the largest exits for a Sacramento startup company in recent years.
Pondera uses huge datasets to find fraud, whereas Plum doesn’t need access to that, Coss said. “We do different and complementary work.”
With Plum Identity, Coss said he was interested in the rights of individuals and the right to privacy.
Plum uses behavioral analytics to detect fraud in government benefit programs, without storing or keeping personally identifiable information, he said.
“There is a need. It is large and we know it well,” Coss said.
The Plum platform monitors typing speed and looks for cutting-and-pasting behavior and how the user tabs around forms. It looks for unusual order in filling out forms, and it also searches to see if the applicant is doing anything to hide their identity or address. All of that platform data is searched in less than a second and the platform doesn’t see it or store it. It gives that application form a risk score, and a government agency can then decide how to proceed. The client agency can add a CAPTCHA to the form, require a phone call to verify information or perhaps investigate.
The company launched at the end of 2023, and has signed some government agencies as customers, and is in talks with others, Coss said.
Plum Identity made it into the final four of the Sacramento Kings Capitalize Contest, and has received some seed funding from Rocklin-based business accelerator Growth Factory, along with funding from the founders, Coss said.
Potential customers are 3,200 subsidy programs, he said.
Plum is pricing its service below the delegated purchasing authorities of agencies, to make the procurement process faster. With previous businesses Coss has run, he found that procurement can take months or even years. He is also offering Plum's service on a monthly basis, rather than a long-term contract.
Coss declined to disclose Plum's annual revenue or number of employees. He said the company has several employees in the Sacramento area, and they work remotely.
“I don’t know how I feel about offices anymore,” he said.
For the last year, Coss had been using an estimate of an annual range of between $175 billion and $250 billion in fraud, waste and abuse in government programs. The U.S. Government Accountability Office this month estimated a higher range — between $233 billion and $521 billion annually — just in federal programs between 2018 and 2022.
That amount of fraud represents thousands of schools or thousands of miles of highways not getting built, Coss said. “It is a huge amount of money, and it is a huge problem.”
Plum Identity identifies synthetic identities, drop houses, disposable emails and bots.
A synthetic identity is some stolen information from a real person combined with falsified information to create a new identity to secure money. Drop houses are where fraudsters have their funds sent. Disposable email is a temporary account. Bots are autonomous programs that can be directed to fill in applications.
