In 2000, Enron was one of the largest companies in the United States. By 2002, it had collapsed into bankruptcy due to widespread corporate fraud. In the resulting Federal investigation, a significant amount of typically confidential information entered into the public record, including tens of thousands of emails and detailed financial data for top executives. In this project, I am building a person of interest identifier based on financial and email data made public as a result of the Enron scandal.

I am trying to build a predictive model that can identify Persons of Interest based on the features of Enron Dataset.

This model can also be used to investigate frauds at other companies.

It contains 146 records with 21 features/ attributes.

I found 3 outliers in this dataset, removed them by using pop().

data_dict.pop("TOTAL",0) , data_dict.pop("THE TRAVEL AGENCY IN THE PARK",0) : These two values can not be considered as the names of person. So, it is a wrong value in dataset and can be considered as outliers.

data_dict.pop("LOCKHART EUGENE E",0): This value be considered as name of a person but it didn't contain any values in its features set.

All features have 'NaN' values and "poi" feature is also False. Its an empty record in our data. So, this can also be considered as an outlier.

I added all the financial_features, email_features to feature_list. I also added 3 new features in this data set:

• poi_to_person_rate : Ratio of no. of emails recieved from POI and total no. of emails recieved.
• person_to_poi_rate : Ratio of no. of emails sent to POI and total no. of emails sent.
• total : Sum of all the financial features for each record.

I used SelectKBest() to select best features from this dataset. It selected 'exercised_stock_options', 'total_stock_value', 'bonus', 'salary','total', 'person_to_poi_rate' features from the dataset.

I selected only 6 features as from above table it is visible that after 'person_to_poi_rate' feature, score value drops significantly.

Effect of new feature on algo performance I tested my GausianNB() with all features('poi' , 'exercised_stock_options', 'total_stock_value', 'bonus', 'salary','total', 'person_to_poi_rate') & got Accuracy: 0.86073 Precision: 0.46846 Recall: 0.33050 F1: 0.38757 F2: 0.35118 values.

But after removing 'person_to_poi_rate' from feature_list & changing it to ['poi', 'exercised_stock_options', 'total_stock_value', 'bonus', 'salary', 'total'], I got these results- Accuracy: 0.86073 Precision: 0.46846 Recall: 0.33050 F1: 0.38757 F2: 0.35118

This is exactly similar to the one including 'person_to_poi_rate'. So, it means for this feature algo is neither increasing not decreasing the performance of our GausianNB() algo, so we can remove this feature from our feature list in our final analysis, it may improve the run time of algo.

Feature Scaling

Feature Scaling is helpful only in case of SVM and K-Means as in those 2 we consider Euclidean distance.

Due to this reason I have apllied MinMaxScaler only in case of SVM to scale all the feature values in a range of [0-1]. Scaling helps to avoid problems caused by different units in the data. It helps in maintaining consistency among values range.

I tested my dataset on 5 different algorithms, used GridSearchCV() for tuning my algorithm's parameters.

GaussianNB :

Accuracy: 0.86073 Precision: 0.46846 Recall: 0.33050 F1: 0.38757 F2: 0.35118

Decision Tree :

Accuracy: 0.86573 Precision: 0.48643 Recall: 0.12550 F1: 0.19952 F2: 0.14737

Best parameters :

class_weight=None, criterion='entropy', max_depth=2, max_features=None, max_leaf_nodes=10, min_samples_leaf=1, min_samples_split=20, min_weight_fraction_leaf=0.0, presort=False, random_state=None, splitter='random' Support Vector Machine :

Here we have done scaling of parameters using MinMaxScaler() Got a divide by zero when trying out. Precision or recall may be undefined due to a lack of true positive predicitons.

This algo didn't work well here. Its showing precision , recall undefined due to lack of positive predictions.

AdaBoost :

Accuracy: 0.84847 Precision: 0.19734 Recall: 0.04450 F1: 0.07262 F2: 0.05266

Best parameters :

algorithm='SAMME', base_estimator=None, learning_rate=5.0, n_estimators=5, random_state=None

RandomForest :

Accuracy: 0.84927 Precision: 0.37391 Recall: 0.19350 F1: 0.25502 F2: 0.21417

Best parameters :

bootstrap=True, class_weight=None, criterion='entropy', max_depth=None, max_features='auto', max_leaf_nodes=10, min_samples_leaf=1, min_samples_split=2, min_weight_fraction_leaf=0.0, n_estimators=10, n_jobs=1, oob_score=False, random_state=None, verbose=0, warm_start=False

GaussianNB is giving best value of Precision & Recall i.e > 0.3.

I have used sklearn's GridSearchCV() to tune all my algorithms and tested my results using our test_classifier(). After Tuning, I am getting best results from GaussianNB classifier.

Tuning an algorithm is an important step because different functions and initial settings can have an effect on its performance. In some cases, such as selecting a wrong parameters for algorithms, it can reult in algorithm overfit.

I am using test_classifier() for testing my algorithm's precision, recall values. This function is using **StratifiedShuffleShift ** for validating our results. We have a small dataset, so validation step is an important step to check overfitting. StratifiedShuffleShift provides train/test indices to split data in train, test sets.

In Validation, we test the performance of classifiers. Classifiers generally make a mistake of overfitting. Overfitting occurs when we have too many parameters but very few observations. An overfit model has poor predictive performance, as it overreacts to minor fluctuations in the training data. So, we divide data in training & testing set. We can also use train_test_spit but that does not shuffle the records. In StratifiedShuffleShift it is a merge of StratifiedKFold and ShuffleSplit algorithms. Runs K Fold times and shuffles the data.

Precision and Recall are two important metrics to evaluate a model. Since the dataset is small, accuracy will not be a good metric.

Here positive prediction is recognizing the person as POI

Precision: The precision is the ratio tp / (tp + fp) where tp is the number of true positives and fp the number of false positives. The precision is intuitively the ability of the classifier not to label as positive a sample that is negative.

Precision is the ratio of "no. of records with positive POI predictions who were actually POI" and "the total no. of records with positive POI predictions"

Precision = no. of persons predicted to be POI & were actually POI / Total no. of persons predicted to be POI

Recall: The recall is the ratio tp / (tp + fn) where tp is the number of true positives and fn the number of false negatives. The recall is intuitively the ability of the classifier to find all the positive samples.

Recall is the ratio of "no. of records which are predicted to be POI and who are actually POI ( true positives)" **and ** "no. of records which are predicted to be POI and who are actually POI + no. of records which were actually POI but predicted Non-POI"

Recall = no. of persons predicted to be POI & were actually POI / (no. of persons predicted to be POI & were actually POI + no. of persons perdicted to be NON-POI but they were actually POI)

Here we are getting best values in case of GaussianNB:

Precision   |  Recall 

----------------|----------------- 0.46846 | 0.33050