By: Greg Wright, MBA, CFE, CFP, CLU, ChFC
Drones,
or unmanned aerial vehicles[i],
are aircraft that can fly without an onboard human operator. Drones fly by
remote control and can be as small as an insect and as large as a traditional
airplane; they can be produced much more cheaply than traditional aircraft; and
can keep operators hidden and out of harm’s way.
They
are known by most Americans as being used overseas in tracking down and killing
members of Al Qaeda. However, drones are being considered for use in fighting
crime, disaster relief, immigration control, for environmental purposes, and by
private investigators.
Few
drones are currently legally flown over U.S. soil; however, the Federal
Aviation Administration (FAA) predicts that 30,000 drones will fly in our
nation’s skies in less than 20 years.[ii] When he saw his first drone at a spy gear
trade show, Indiana private investigator, Tim Wilcox, immediately saw the
potential benefits to one of his specialties – work comp fraud
surveillance.
Wilcox, an early adopter of technology, is
no stranger to lithium battery powered, carbon fiber vehicles. He was the first in Indianapolis to own a
fast (and expensive) Testa Roadster. Pictured to the right is a photograph of Wilcox
next to his Testa taken at an altitude of 150 feet from his drone.
He
said that drone technology offered a solution to thorny surveillance such as
dead-end streets, rural locations, restricted access and line-of-sight problems. Wilcox said “what is often needed is a video
recording that would satisfy the client and hold up in court.” He bought the most capable drone available at
that trade show and embarked on a three year technical research and training program
to integrate drone use into his private investigation business.
HISTORY OF DRONES
The first record of a drone was a simple method of launching
a camera into the air attached to a kite and securing a long string to the
shutter release. Douglas
Archibald, an Englishman, is credited with taking the first successful aerial
photographs from a large kite in 1883.[iii]
In February
1863, during the Civil War, a U.S. inventor named Charles Perley patented a
design for a hot-air balloon that could carry a basket filled with explosives
attached to a timing mechanism. The timer would trip the balloon's hinged
basket, and the explosives would drop out, igniting a fuse.
The first large-scale production of a drone in the U.S. was the product of
Reginald Denny who opened a Los Angeles model plane shop that evolved into the
"Radioplane Company". Denny believed that low-cost radio controlled
aircraft would be useful for training anti-aircraft gunners, and in 1935 he displayed
a prototype target drone to the US Army.
 |
| U.S. Army Photo |
In 1940, the Army placed an order for
53 drones. This small order led to much bigger orders and throughout WWII,
thousands were built in the Los Angeles area. It was at Denny’s factory in1944 that
an Army photographer took a picture of a young woman assembler named Norma
Jeane Dougherty, holding a drone prop. Norma Jeane, later changed her name to
Marilyn Monroe.[iv]
The “Predator” drone (Wikipedia picture
right) is perhaps the best recognized drone and was used extensively in Iraq
and Afghanistan. Armed with Hellfire
missiles, it is credited with killing 1,000 people in Pakistan alone. Drone technology has advanced to the point the
U.S. has drones flying and landing on an aircraft carrier.
CURRENT RULES
FAA rules only allow private
citizens to operate drones or “flying model aircraft.”[v] The FAA Policy Statement for drones is that
“no person may operate a UAS (Unmanned Aircraft System) in the National
Airspace System without specific authority”. [vi]
Further, the policy states, “The FAA
recognizes that people and companies other than modelers might be flying UAS
with the mistaken understanding that they are legally operating under the
authority of AC 91-57 (Model Aircraft Operating Standards). AC 91-57 only applies to modelers, and thus
specifically excludes its use by people or companies for business purposes.”[vii]
According to the ABC News
affiliate in Indianapolis[viii],
documents released to them by the FAA show a surprising number of warnings and
“cease and desist” letters issued to operators of drones for hire.
Fraud investigators might wish to operate drones as a civil
aircraft or as a hobbyist.
Realistically, for the time being, an option considered by some may be
to operate under the “model aircraft” rules and try to stay under the FAA's
radar. Many people and organizations are
doing just that today for many commercial applications. If the FAA learns about
those operations, generally as a result of advertising, it may ask operators to
“cease and desist.” The FAA does not
appear to have enforcement penalties specifically codified for drones; however,
they do have regulations for “careless and reckless operations.” Any air vehicle, including a lawn chair carried
aloft on balloons, is subject to these provisions which could result in a
$10,000 civil fine that would go through a judicial process, including
negotiations and appeals. I was unable
to locate any record of a drone operator being fined by the FAA.
As we wait for the small drone rules to be issued,
recognize that this rule could require that some of the larger drones used for
commercial purposes be certified as airworthy by the FAA. Or they could use some other standard as well
the current one used to regulate “ultra-light” aircraft. It looks like, according to experts, that rules
will depend on drone physical size or weight. It is estimated that drones under 4.4 pounds
would be excluded from certification.
FUTURE OF DRONES
It is impossible to put the genie back
in the bottle once technology has been developed. The Teal Group's 2013 market study estimates
that worldwide drone spending will more than double from current
$5.2 billion to $11.6 billion in ten years,[ix] Most
of those sales will be for military drones and over half bought by the U.S. government.
The
Association for Unmanned Vehicle Systems International, a drone trade
association, has over 7,000 individual and 2,000 company members, and is
supported by major players including Northrop Grumman, General Atomics, Boeing,
AAI Corp, and iRobot. They see great
potential in the civilian market where individual
commercial drones can cost $1 million for sophisticated units, to toy drones
with cameras selling for little more than the cost of a smart phone.
On Feb. 14, 2012, President Obama
signed the FAA Air Transportation Modernization and Safety Improvement Act of
2012 which will require the FAA to
allow drones to be used for commercial purposes by Sept. 30, 2015. The uses could include private investigation,
selling real estate, dusting crops, monitoring security, etc. Below is language reprinted from Section 321,
Subtitle B (Unmanned Aircraft Systems) of the law:
COMPREHENSIVE PLAN.—Not later
than 270 days after the date of enactment of this Act, the Secretary of
Transportation, in consultation with representatives of the aviation industry,
Federal agencies that employ unmanned aircraft systems technology in the
national airspace system, and the unmanned aircraft systems industry, shall
develop a comprehensive plan to safely accelerate the integration of civil
unmanned aircraft systems into the national airspace system.[x]
PRIVATE
INVESTIGATORS
If
you have tried your hand at surveillance in a rural or small town, most likely
you were quickly identified by the investigation target, his neighbors, and may
have even faced a local law enforcement official demanding to know what the
hell you were doing on his turf. It is
hard to hide a surveillance van in a small town, on a dead end street or farm
road. Wilcox’s fixed-wing drone is
pictured to the right.
Licensed
Private Investigators, Special Investigative Units and other professional
security organizations could benefit from drones. This includes large corporation campuses, universities,
news reporting agencies, outdoor concerts, athletic events, county fairs, fire
detection efforts, shopping centers security, and insurance fraud
investigations. The newer technologies include
thermal imaging and low vision capacities to identify humans, heat or fire
sources hidden inside buildings.
Below
are a few examples.
·
Surveillance
and video documentation without physical trespass, in rural settings, on dead-end
streets, or where access to bordering property is impractical.
·
Following
vehicles.
·
Large
corporate campuses with multi gates, fenced perimeters, and yard storage of valuable
assets.
·
Complex
manufacturing, petroleum, chemical production, or transportation centers.
·
University
or school districts with large campus, traffic issues, athletic games, crisis
incidents, etc.
·
Television
news organizations that want a lower cost alternative to manned helicopter and a
faster response time.
Given
the current rapid development of drone technology and the recognized efficiency
and safety opportunities, political pressure will influence drone regulations.
LAW ENFORCEMENT
The FAA and the Department of Justice has developed a
process for local and state law enforcement to operate drones weighing less
than 25 pounds under an agreement called the "Common Strategy."[xi] Five law enforcement
agencies[xii] are participating in
this drone testing program including the Mesa County Colorado Sheriff
Department. Program Manager, Benjamin
Miller, told me “We’ll accomplish 30 percent of our manned aviation mission for
two percent of the cost.” He said that
his operating cost was $25 an hour compared to $200 up to $1,500 per hour for a
manned aircraft. He operates both a
multirotor and a fixed wing drones. Examples
of their drone flights may be found on YouTube and the Mesa County Sheriff
website.
INTERNATIONAL
INVESTIGATORS, INC.
Tim
Wilcox’s firm, or “Three Eyes,” as it has been described by some pundits, is a
half-century old licensed private investigative firm specializing in insurance
fraud, legal support and technical surveillance countermeasures. Following Wilcox’s purchase of a rotary drone
at that “spy gear” show, he has continued developing the technology
specifically for private investigators. It
has helped that his electronics expert, a graduate engineer, was already a
remote control plane hobbyist. They have
formed a separate company, Recon Avionics Corporation to develop, research and
produce drones.
Two
years, thousands of man-hours and over $100,000 in equipment later, they have developed
technology. Here are a few issues they sorted
through in their search to find a better surveillance drone:
·
Multirotor
or hover drones are not practical for many surveillance situations. They are too noisy and too slow. They provide only about 15 minutes on target,
travel at speeds only up to 20 MPH, and most require line-of-sight use. Gasoline
powered drones are too noisy.
The
answer is a fixed wing drone that is electrically powered by batteries with the
capacity of flying for about two hours on target, a 60 MPH top speed, slow
speed and tight turning circle while over the target, GPS[xiii]
guided, sonar avoidance systems, thermal imaging, and wide-angle and optically
zoom capable gimbal mounted cameras.
·
Their
drone has an on-screen display camera, and full telemetry including
incline/decline, air speed, waypoint distance, vertical speed, etc.
·
Fixed
wing drones have a time in the air advantage that is six to eight times greater
than multirotor drones. If you need more
than two hours over the subject, a fixed-wing drone can return to the launch
site and receive a replacement battery in less than five minutes.
Wilcox’s
setup allows an investigator to launch from a public location away from the suspected
fraudster’s house and travel to a specific GPS[xiv]
map coordinate that has been entered into the drone. Once at the location, by flying slowly and
silently in a tight circle about 150 feet off the ground, the investigator can
visually identify the investigation subject and keep the high-mega pixel camera
on the target. The investigator can
record the actual physical activities he observes from a remote location. Since the recording was not obtained by
trespassing on private property and the investigator documents a proper chain
of custody, the surveillance should hold up in court.
Investigator
Tim Wilcox said, “We estimate work comp fraud to be at least one-third of paid
claims and drones can help cut those losses.
Soon, surveillance investigators not familiar with this new drone technology
might need to find another occupation.”
Wilcox
and his staff demonstrated their drone technology at the September 2013 ACFE
Central Indiana Chapter’s Professional Development Conference.
PERSONAL
PRIVACY
Individuals
can expect protection against warrantless government authorities entering their
homes; however, the Fourth Amendment offers few limits on the activities of
government or private surveillance in public places. These include curtilage areas immediately
outside the home, such as driveways, back yards and open fields. State and local laws vary from jurisdiction
to jurisdiction. Private investigators
need to be informed about local laws that may affect the use of drones.
ACKNOWLEDGMENT
I want thank the technical contributions to this article provided
by my friend and former neighbor, Gary Church, the President of Washington DC
based Aviation Management Associates, Inc. Gary’s consulting firm has helped over the
last five years to bring drone rules into the National Airspace System.
Note: This
paper was originally published in a National Society of Insurance Fraud
Investigators newsletter in 2013; however, I retained the right to republish.
[i]
The FAA refers to "drones" as unmanned aircraft systems
(UAS). The military uses the term remotely piloted aircraft (RPA). However,
“drone” is a common term widely accepted by the news media and public.
[ii]
http://www.fas.org/sgp/crs/natsec/R42701.pdf
[iii] Nova, Spies That Fly, PBS, http://www.pbs.org/wgbh/nova/spiesfly/uavs.html
(text reference and picture), (July 24, 2013)
[iv]Wikipedia, “Radioplane OQ-2,” (
July 24, 2013), http://en.wikipedia.org/wiki/Radioplane_OQ-2
[v] Federal Aviation Administration,
(June 8, 1981), Advisory Circular AC 91-57, Model
Aircraft Operating Standards, http://www.uavm.com/images/ac91-57.pdf
.
[vi] Federal Aviation Administration,
(Feb. 6, 2007), 14 CFR Part 91, Unmanned
Aircraft Operations in the National Airspace System, Pg. 5, http://www.faa.gov/about/initiatives/uas/reg/media/frnotice_uas.pdf
.
[vii] Ibid
[viii] Stephen Dean, Indiana pilots
call drones for hire a growing threat, http://www.theindychannel.com/news/call-6-investigators/indiana-pilots-call-drones-for-hire-a-growing-threat (July 24, 2013).
[ix]
http://tealgroup.com/index.php/about-teal-group-corporation/press-releases/94-2013-uav-press-release
[x] United States Congress. Senate
and House of Representatives, 2nd Session. H.R. 658, FAA
Modernization and Reform Act of 2012, [signed into law Feb. 14, 2012],
http://www.gpo.gov/fdsys/pkg/BILLS-112hr658enr/pdf/BILLS-112hr658enr.pdf
[xi] Memorandum of Understanding
between the Federal Aviation Administration, Unmanned Aircraft Systems
Integration Office and the U.S. Department of Justice, Office of Justice
Programs, National Institute of Justice Concerning Operation of Unmanned
Aircraft Systems by law Enforcement Agencies, (March 4, 2013), http://www.alea.org/assets/pressReleases/assets/1805/DOJ%20FAA%20MOU.pdf
[xii]
The other four law enforcement agencies are Grand Forks County Sheriff, North
Carolina; Canyon County Sheriff, Idaho; Arlington Texas Police Dept.; and
Miami-Dade police Department.
[xiii]
The Global Positioning System
(GPS) is a space-based satellite
navigation system that provides detailed latitude and longitude coordinates
(location information) anywhere on the Earth where there is an unobstructed
line of sight to four or more GPS satellites.
[xiv]
Ibid
That,s great. phantom drone are used for many purposes.
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