Technical Paper - Bi-Directional Payment Integrity Network

FWEA Verdict Engine - The Payment Integrity Network

The system that decides if a payment should happen - before it happens. Unified coverage of Fraud + Waste + Error + Abuse.

69 signal checks across 9 weighted categories covering Fraud, Waste, Error, and Abuse (FWEA). Cryptographic verdicts issued before funds move. Post-quantum signed. Under-2-second latency. All payment rails including SEPA, UK FPS, PIX, UPI, SWIFT gpi, CIPS, NPP, and CBDC.

April 2026 - JIL Sovereign Technologies, Inc. - Patent Pending

37
Fraud Checks
7
Signal Categories
4
Payment Rails
<500ms
Verdict Latency
SHA-256
Attestation Hash
Dilithium
Post-Quantum Signed

Executive Summary

The JIL Pre-Settlement Fraud Attestation Engine is the Outbound Integrity component of JIL's Bi-Directional Payment Integrity Network - a centralized verdict service that evaluates every transaction before settlement occurs. Unlike post-settlement fraud detection (which identifies fraud after funds have already moved), JIL's engine issues a cryptographically signed verdict - YES, NO, or REVIEW - before any funds change hands.

The engine runs 37 independent fraud signal checks across 7 weighted categories in parallel, produces an aggregate risk score (0-100), and issues a signed attestation receipt. This receipt is immutable, timestamped, and stored on-chain - creating an auditable record that proves due diligence was performed on every single transaction.

Bi-Directional Payment Integrity: JIL's network operates in two directions. Outbound Integrity (this engine) verifies before execution - no funds move until the verdict engine says YES. Inbound Proof proves every outcome after settlement with cryptographic attestation receipts. Together, this creates a continuous, closed-loop system of payment integrity. Verify before you pay. Prove every outcome.
Why "pre-settlement" matters: Traditional fraud systems flag suspicious activity after settlement. By that point, funds have moved and recovery is expensive, slow, and often impossible. JIL stops fraud before the settlement instruction executes. No funds move until the verdict engine says YES.

The Three-Verdict Model

Every transaction receives exactly one of three verdicts, determined by the aggregate weighted score across all applicable signal categories:

VerdictScore RangeActionDescription
YES 0-29 Clear to settle All fraud checks passed. Settlement proceeds immediately. Attestation receipt issued and published to Kafka for downstream consumers.
REVIEW 30-70 Hold for analyst One or more signals triggered above threshold. Transaction held in escrow pending human review. Analyst sees full signal breakdown with recommended action.
NO 71-100 Block settlement High-confidence fraud indicators detected. Settlement is blocked. Entity risk profile updated. SAR/CTR filing may be triggered automatically.
Hard Block Override: Certain signals produce an automatic NO verdict regardless of the aggregate score. These include: OFAC/SDN sanctions matches, excluded provider billing (healthcare), and instruction provenance hash mismatches (potential tampering). These signals cannot be overridden by low scores in other categories.

How It Works

From transaction initiation to sealed attestation in four steps:

1

Transaction Initiated

A settlement request arrives via the Verdict API (POST /v1/verdict). The request includes sender/receiver identities, amount, currency, payment rail, and optional metadata (claim IDs, procedure codes, routing numbers). The engine assigns a unique verdict ID and timestamps the request.

2

37 Signals Scored in Parallel

All 7 signal categories are evaluated simultaneously using Promise.all(). Each category runs its checks independently - calling internal databases, upstream microservices (KYC, sanctions, compliance), and behavioral scoring models. No category waits for another. Total wall-clock time is determined by the slowest single category, not the sum of all checks.

3

Verdict Issued

Category scores are combined using a weighted average. Hard-block signals are checked. The engine produces a YES, REVIEW, or NO verdict with the full signal breakdown. The verdict, all signal scores, and entity risk profile updates are persisted to PostgreSQL.

4

Attestation Sealed

A SHA-256 attestation hash is computed over the verdict payload + cryptographic nonce. The attestation receipt is published to the fraud-verdicts Kafka topic for downstream consumption by the settlement consumer, compliance archives, and audit trail. The receipt is immutable - any attempt to alter the verdict would invalidate the hash.

9 Signal Categories (69 Checks - FWEA Coverage)

FWEA = Fraud + Waste + Error + Abuse. JIL is the only unified attestation engine that covers all four pillars of payment exposure as a single framework. The 9-category breakdown below includes 18 international rail checks (SEPA, UK FPS PSR, PIX, UPI, SWIFT gpi, CIPS, NPP, MiCA, DORA, FCA, FATF Travel Rule, IBAN, correspondent chain, FATF typology, Egmont FIU, BIS CPMI, cross-border velocity, hub routing) and 14 extended / emerging threat checks (pig butchering, AI voice deepfake, FaaS intelligence, DPAN wallet provisioning, Magecart, ZKP proofs, real estate wire protection, TBML, bust-out credit fraud, CBDC attestation, consortium intelligence, adversarial ML drift, HNDL quantum-safe TLS, XAI explanations). See the FWEA Framework and 69-Check Developer Reference for full details.

(Legacy note: the 7-category / 37-check framework described below is the original framing. The engine has since been extended to 9 categories / 69 checks. Each category has a weight that determines its contribution to the final aggregate score. Weights are configurable per deployment and can be adjusted by compliance officers via the Rules API.)

Each category has a weight that determines its contribution to the final aggregate score. Weights are configurable per deployment and can be adjusted by compliance officers via the Rules API.

1 Identity & Counterparty Integrity Weight: 20%
Signal IDCheckWhat It DoesData Source
ID-001UBO VerificationQueries KYC service for Ultimate Beneficial Ownership. Flags missing/stale UBO data, shell company indicators, circular ownership structures (recursive CTE graph traversal).kyc-service
ID-002Synthetic Identity DetectionScores identity authenticity based on SSN issuance date vs. stated age, address history depth, email domain age, phone carrier verification, and document anomaly patterns.Internal + Experian CrossCore (vendor stub)
ID-003Account-to-Name ValidationCompares sender/receiver names against account holder names using Jaccard bigram similarity. Catches name mismatches that indicate unauthorized account use or account takeover.Internal (Jaccard similarity)
ID-004Sanctions ScreeningHARD BLOCK. Screens all parties against OFAC/SDN, EU Consolidated, UN Security Council, and OpenSanctions datasets. Any match produces an automatic NO verdict. Uses fuzzy matching (Levenshtein distance) for transliterated names.sanctions-screening-cache
ID-005Deepfake/Liveness DetectionStub for behavioral biometric verification. Will integrate with Sardine for device fingerprinting and behavioral analytics to detect session hijacking and deepfake authentication attempts.Sardine (vendor stub)
ID-006Corporate Synthetic FraudDetects artificially created corporate entities: recently incorporated entities with no history, shared registered agent addresses, mismatched SIC/NAICS codes, and missing beneficial ownership filings.Internal + OpenCorporates
2 Payment Rail-Specific Fraud Weight: 20%
Signal IDCheckWhat It DoesData Source
PR-001Business Email Compromise (BEC)Detects BEC attacks: domain age <180 days, MX/SPF/DMARC failures, lookalike domain scoring (Levenshtein <3 vs. known counterparties), free email for business transactions, and domain typosquatting patterns.kyc-service (RDAP/DNS)
PR-002Invoice Fraud DetectionIdentifies invoice manipulation: amount significantly above historical average for the sender-receiver pair, sudden large increases, round numbers, and duplicate invoice references.Internal (historical analysis)
PR-003Account Takeover (ATO)Detects account takeover via impossible travel (login from two distant geolocations within an impossible timeframe), new device fingerprints, changed notification settings, and password-then-transfer patterns.Internal + MaxMind GeoIP2 (vendor stub)
PR-004Processor ImpersonationDetects when a transaction claims to originate from a known payment processor but arrives from an unrecognized IP range or uses inconsistent processor metadata.Internal
PR-005ACH Unauthorized ReturnScores sender based on historical ACH return rates. High unauthorized return rates (R05, R07, R10, R29) indicate potential unauthorized debit origination.Internal (return rate analysis)
PR-006APP Scam DetectionAuthorized Push Payment scam indicators: first-time payee, amount above normal, urgency metadata, social engineering indicators, and known scam typology patterns.Internal + Feedzai (vendor stub)
PR-007Check Fraud (MICR/Image)Validates check MICR line via Luhn checksum (ABA routing numbers). Detects duplicate check numbers, altered payee names, and MICR encoding inconsistencies.Internal (Luhn/MICR validation)
PR-008Wire Transfer AnomalyDetects suspicious wire patterns: first-time international wire, amount exceeds 3x the sender's 90-day average, intermediary bank in high-risk jurisdiction, and time-of-day anomalies (wires initiated outside business hours).Internal
3 Regulatory Compliance Flags Weight: 15%
Signal IDCheckWhat It DoesData Source
RC-001Real-Time SanctionsHARD BLOCK. Real-time screening against OFAC SDN, Consolidated, and Sectoral lists. Cross-references entity names, aliases, addresses, and ID numbers. Fuzzy matching with configurable threshold.sanctions-screening-cache
RC-002AML Typology MatchingDetects three core AML typologies: (1) Round-trip transactions (funds return to originator via intermediaries), (2) Fan-out patterns (one sender to many receivers in short window), (3) Fan-in patterns (many senders to one receiver).Internal (graph analysis)
RC-003OFAC Jurisdiction RiskScores transactions involving sanctioned jurisdictions (Iran, NK, Cuba, Syria, Crimea), high-risk jurisdictions (FATF list), and FATF grey-list countries. Separate severity tiers with different score impacts.Internal (jurisdiction sets)
RC-004GENIUS Act ComplianceValidates stablecoin-specific compliance requirements per the GENIUS Act: issuer reserve attestation, redemption right verification, and custodial/non-custodial classification checks.Internal
RC-005BSA/SAR Auto-FilingAutomatically flags transactions requiring Suspicious Activity Report (SAR) filing based on FinCEN guidelines. Tracks cumulative activity per entity for aggregate thresholds ($5K-$25K bands).Internal (aggregate tracking)
RC-006CTR DetectionCurrency Transaction Report detection for transactions exceeding $10,000 or structured patterns designed to evade the $10K threshold. Tracks 24-hour rolling aggregates per entity.Internal ($10K threshold)
4 Transaction Behavior & Velocity Weight: 15%
Signal IDCheckWhat It DoesData Source
VE-001Velocity AnomalyTracks transaction counts and volumes across three rolling windows: 1-hour, 24-hour, and 7-day. Flags when current velocity exceeds 3x the entity's established baseline. New entities (<30 days) receive elevated scrutiny.Internal (rolling windows)
VE-002Mule Account ScoringComposite score based on: rapid fund passthrough (receive-then-send within hours), multiple funding sources, account dormancy followed by sudden activity, and round-number transfers.Internal
VE-003High-Volume Low-Value (HVLV)Detects micro-transaction patterns used for money laundering: >50 transactions in 24h with individual amounts <$100. Commonly used to test stolen credentials or launder small amounts.Internal
VE-004Smurfing/StructuringDetects deliberate structuring to avoid the $10,000 CTR threshold: multiple transactions in the $8,000-$9,999 range within a rolling 24-hour window, especially across different accounts or branches.Internal ($10K threshold)
VE-005Geographic AnomalyDetects impossible travel and jurisdiction hopping: transactions from two geographically distant locations within an impossible timeframe, or rapid jurisdiction switching designed to exploit regulatory gaps.Internal + IP geolocation
VE-006First-Party FraudDetects first-party fraud patterns: entities filing disputes on legitimate transactions, chargeback ratios above industry norms, and coordinated dispute filing patterns across related accounts.Internal (dispute analysis)
5 Settlement Instruction Integrity Weight: 15%
Signal IDCheckWhat It DoesData Source
SI-001Routing Change DetectionDetects changes to settlement routing instructions (ABA number, SWIFT/BIC, account number) within the previous 72 hours. Any recent routing change triggers a mandatory 72-hour hold and elevated review.Internal (change tracking)
SI-002Beneficiary Account AgeScores the age of the beneficiary account. Accounts <30 days old receive elevated risk scores. Accounts <7 days old are flagged for review. Combines with velocity data for compound risk.Internal
SI-003Instruction ProvenanceHARD BLOCK on mismatch. Computes SHA-256 hash of the settlement instruction at initiation and compares it to the hash at settlement time. Any discrepancy indicates tampering between initiation and settlement. Uses Dilithium post-quantum signatures for hash verification.Internal (SHA-256 + Dilithium)
SI-004Entity Credential ValidationVerifies sender and receiver credentials via the credential registry and compliance API. Checks credential expiration, revocation status, and issuer validity.credential-registry, compliance-api
6 Healthcare & Government Rails Weight: 5%
Signal IDCheckWhat It DoesData Source
HC-001Duplicate ClaimsDetects three types of duplicate billing: exact duplicates (same claim ID), semantic duplicates (same provider + patient + service date + procedure), and cross-provider duplicates (patient billed by >3 providers on the same day).Internal (claim analysis)
HC-002Provider EnrollmentValidates provider NPI (10-digit Luhn checksum with 80840 CMS prefix). Checks against internal exclusion list for debarred/excluded providers. Vendor stub for OIG/LEIE/SAM exclusion database integration.Internal (NPI Luhn) + Streamline Verify (vendor stub)
HC-003Upcoding DetectionIdentifies billing for higher-complexity procedures than historically supported: statistical outlier detection (amount >2.5 standard deviations above provider average), E&M code level analysis (99214/99215 usage rate >70%).Internal (statistical analysis)
HC-004Remittance MismatchCompares expected remittance advice amount to actual payment. Flags variances >10% (moderate) and >25% (significant). Overpayments scored higher than underpayments due to higher fraud correlation.Internal
HC-005Overpayment RecoveryTracks providers with excessive overpayment patterns: >10 overpayments in 1 year triggers elevated scrutiny. Also checks for pending recovery actions that indicate ongoing investigation.Internal
7 Macro & Systemic Flags Weight: 10%
Signal IDCheckWhat It DoesData Source
SY-001Fraud Ring DetectionGraph analysis to identify coordinated fraud rings: clusters entities sharing IP addresses, device fingerprints, and account details. Two-hop analysis detects indirect connections. Clusters with >5 entities and >3 shared attributes trigger investigation.Internal (graph clustering)
SY-002Typology SharingCross-references detected patterns against known fraud typologies from FinCEN advisories, OCC bulletins, and internal pattern library. New typologies are automatically added when confirmed by analysts.Internal + FinCEN advisories
SY-003Cross-Rail CorrelationDetects when the same entity or related entities conduct suspicious transactions across multiple payment rails simultaneously (e.g., wire + ACH + check in the same 24-hour window to the same beneficiary).Internal (multi-rail analysis)
SY-004Four-Rail Coverage VerificationEnsures that every transaction is properly classified and routed through the appropriate rail-specific checks. Validates that Check, ACH, Wire, and Instant Payment transactions each receive their rail-specific fraud analysis.Internal

Weighted Scoring Model

Each category produces a score (0-100) based on the average of its triggered signal scores. The final verdict score is a weighted average across all categories with applicable signals:

CategoryWeight# ChecksRationale
Identity & Counterparty20%6Identity is the foundation. A compromised identity undermines all other checks.
Payment Rail-Specific20%8Rail-specific attacks (BEC, ATO, APP) represent the highest volume of real-world fraud.
Regulatory Compliance15%6Regulatory violations carry heavy penalties. Sanctions are hard-block automatic.
Velocity & Behavior15%6Behavioral anomalies detect novel fraud patterns that identity checks miss.
Instruction Integrity15%4Instruction tampering is the highest-value attack vector. Provenance is hard-block.
Healthcare & Government5%5Specialized rail with lower volume but significant government exposure.
Macro & Systemic10%4Cross-entity and cross-rail correlation detects coordinated attacks.
Only applicable categories are scored. If a transaction has no healthcare metadata, the healthcare category is excluded from the weighted average (its 5% weight is redistributed proportionally). This prevents non-healthcare transactions from being penalized by irrelevant checks.

Four-Rail Coverage

The OCC, Federal Reserve, and FDIC joint mandate requires institutions to have fraud controls across all four payment rails. JIL's engine covers all four with rail-specific signal checks:

Payment RailKey Fraud VectorsJIL Signals Applied
CheckMICR alteration, duplicate presentment, counterfeit, payee alterationPR-007 (MICR/Luhn), HC-001 (duplicate detection), SI-001 (routing changes)
ACHUnauthorized debits, return fraud, account validation, Nacha rule violationsPR-005 (unauthorized return), VE-001 (velocity), VE-004 (structuring), RC-006 (CTR)
WireBEC, instruction manipulation, intermediary routing, time-of-day anomaliesPR-001 (BEC), PR-008 (wire anomaly), SI-003 (provenance), SI-001 (routing change)
Instant / RTPAPP scams, velocity abuse, social engineering, account takeoverPR-006 (APP scam), PR-003 (ATO), VE-001 (velocity), VE-005 (geo anomaly)

Cryptographic Attestation (Inbound Proof)

Every verdict produces a cryptographic attestation receipt - the Inbound Proof that completes the bi-directional integrity loop. This receipt serves as immutable proof that the transaction was evaluated and a decision was made before settlement, and proves the outcome after settlement. The attestation is:

Instruction Provenance (Dilithium-Signed)

One of JIL's most differentiated capabilities is instruction provenance attestation. This addresses the attack vector where a settlement instruction is modified between the time it is created and the time it is executed:

StageWhat Happens
InitiationWhen a settlement instruction is created, the engine computes a SHA-256 hash over the instruction fields (sender, receiver, amount, currency, routing details, reference). This hash is stored in the instruction_hashes table and signed with Dilithium.
SettlementWhen the instruction arrives for settlement, the engine recomputes the SHA-256 hash over the same fields. If the recomputed hash does not match the stored hash, the instruction has been tampered with - the engine issues an automatic NO verdict (hard block).
AuditBoth the original hash and the settlement-time hash are stored, along with the Dilithium signatures. Auditors can independently verify that instructions were not altered. If a discrepancy is found, the system logs the exact fields that changed.
Why this matters: Man-in-the-middle attacks on settlement instructions are one of the highest-value fraud vectors. A single altered wire instruction can redirect millions. JIL's provenance system makes this attack detectable and blockable with cryptographic certainty.

Nacha 2026 Compliance

The engine is designed to meet Nacha's 2026 ACH fraud prevention requirements:

Nacha RequirementJIL ImplementationSignals
APP false-pretenses detectionAPP scam detection with social engineering indicators and first-time payee flaggingPR-006
Account validation for WEB debitsAccount-to-name validation using Jaccard bigram similarity scoringID-003
Unauthorized debit monitoringACH return rate tracking with R05/R07/R10/R29 code analysisPR-005
Large item fraud monitoringVelocity anomaly detection with rolling windows, wire anomaly flagging for first-time large transfersVE-001, PR-008
Credit monitoring for originatorsMule account scoring with rapid passthrough detection and fan-out/fan-in analysisVE-002, RC-002

Service Architecture

The fraud attestation engine integrates with JIL's existing microservice mesh:

Upstream ServiceWhat It Provides
kyc-serviceUBO verification, BEC detection (RDAP, DNS, MX/SPF/DMARC), sanctions screening, identity verification
fraud-firewallReal-time velocity scoring, sanctioned address checks, transaction blocking
compliance-apiCompliance zone routing, watchlist screening, regulatory jurisdiction classification
risk-scoringDynamic entity risk assessment, behavioral risk modeling
credential-registryParty credential lookup, credential validity verification
sanctions-screening-cacheCached sanctions results from OFAC/SDN, EU Consolidated, UN Security Council, OpenSanctions
policy-decision-apiPolicy evaluation, rule-based decision logic, configurable thresholds
Parallel execution: All upstream service calls are made concurrently using Promise.all(). The total wall-clock latency is determined by the slowest single service call, not the sum of all calls. This achieves sub-500ms verdict times even when querying 7+ upstream services.

API Reference

MethodEndpointDescription
POST/v1/verdictIssue pre-settlement verdict. Returns YES/NO/REVIEW with full signal breakdown and attestation hash.
POST/v1/verdict/batchBatch verdict for up to 100 transactions. Parallel processing with individual results.
GET/v1/verdict/:idRetrieve a previously issued verdict by ID. Includes full attestation receipt.
POST/v1/signals/scoreScore a single signal category independently. Useful for testing and debugging.
GET/v1/signals/categoriesList all 9 categories with their 69 checks, weights, and current status.
POST/v1/instructions/hashRegister an instruction hash at initiation time (Dilithium signed).
POST/v1/instructions/verifyVerify instruction integrity at settlement time against stored hash.
GET/v1/rulesList all fraud rules with weights and thresholds.
PUT/v1/rules/:idUpdate a rule's weight, threshold, or enabled status.
GET/v1/profiles/:entityIdRetrieve an entity's risk profile with score history and flagged signals.

Competitive Differentiation

What makes JIL's Bi-Directional Payment Integrity Network fundamentally different from existing fraud detection:

Data Model

The engine uses the fraud PostgreSQL schema with 7 tables:

TablePurposeKey Columns
fraud.verdict_requestsIncoming verdict requeststransaction_id, sender/receiver entities, amount, currency, rail_type, metadata (JSONB)
fraud.verdict_resultsIssued verdictsverdict (YES/NO/REVIEW), score (0-100), attestation_hash, categories (JSONB), hard_blocks (array)
fraud.signal_scoresIndividual signal resultssignal_id, signal_name, score, triggered (boolean), details (JSONB), source
fraud.fraud_rulesConfigurable rulesrule_id, name, category, weight, threshold, enabled, description
fraud.entity_risk_profilesEntity risk stateentity_id, risk_score, flags (JSONB), last_verdict, total_transactions
fraud.instruction_hashesInstruction provenanceinstruction_id, hash (SHA-256), signature (Dilithium), fields_hashed (JSONB)
fraud.instruction_changesRouting change logentity_id, field_changed, old_value, new_value, changed_at, hold_until

Vendor Integration Roadmap

The engine is built with vendor-agnostic interfaces. Current vendor stubs return 501 with recommended integration partners:

VendorIntegrationSignals EnhancedStatus
SardineDevice fingerprinting, behavioral biometrics, ATO detectionID-005, PR-003Vendor stub
Feedzai / ComplyAdvantageAPP scam ML models, real-time transaction monitoringPR-006Vendor stub
Plaid / PrometeoAccount ownership validation, balance verificationID-003Vendor stub
MaxMind GeoIP2IP geolocation for impossible travel detectionPR-003, VE-005Vendor stub
Experian CrossCoreSynthetic identity scoring, credit header analysisID-002Vendor stub
Mastercard ACSAccount Confidence Score for real-time account validationID-003Vendor stub
Streamline VerifyOIG/LEIE/SAM provider exclusion databaseHC-002Vendor stub

Service: fraud-attestation-engine
Schema: fraud (7 tables, comprehensive indexes)
Dependencies: PostgreSQL, Redis, RedPanda (Kafka), upstream attestation services
API Proxy: /api/fraud

JIL Sovereign Technologies, Inc. - Patent Pending - April 2026
This document is confidential and proprietary.