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2008
Employee Fraud:
Perpetrators and their Motivations
CURRENT: To effectively detect and prevent
fraud, we must first understand what motivates people to commit fraud. Three
essential elements are common to all types of fraud schemes: opportunity,
pressure, and rationalization. In combination, these three elements make up
what is commonly referred to as the fraud triangle. (Read
more...)
2007
KPMG Profile of a Fraudster Survey 2007
2007: At first glance, an average fraudster is not much
different from an average person. Consequently, it is often
extremely difficult to detect fraudulent acts. But upon reflection,
the following circumstance must be considered: Why are people often
caught unaware when somebody is accused of fraud? Because it is
usually the colleague who is known to be helpful, polite and
inconspicuous.
But most importantly it is the colleague
that enjoys
the absolute trust of both superiors and colleagues. (Read
more...)
When upper-level
executives go bad
JUNE 2007: It’s easy to assume that upper-level executives in
companies with fraud scandals were always bad people. By assuming
that they were inherently bad people, we don’t have to confront the
issues related to trusting people who seemed trustworthy. We don’t
have to explore the idea that people can turn bad or choose a bad
path or give in to greed.
Yet the fact remains that many executives who committed fraud were
at one time considered rising stars with good values. If it was
recognized that their ethics were a little lower than preferred,
some were still promoted because those in charge believed the
results were more important than the methods. (Read
more...)
2006
Finding a
thief: Personal red flags of fraud
As victims of
occupational fraud reflect on crimes committed against their companies, they
wonder if there were any signs that a fraud was occurring. They wonder how a
trusted employee could steal from the company. Sadly, frauds are committed
by people in positions of trust. What is it about those people that leads
them to commit fraud?
Corporate
thieves have many things in common with one another. There are many
tell-tale characteristics about people and their lifestyles that signal the
potential for fraud. These range from personal financial circumstances to
attitudes on the job. A few of these traits alone do not indicate the
potential for fraud, but the probability rises as we identify more of the
characteristics. (Read
more...)
2005
Profiling: The DNA Of Fraud Rings
JULY 2005: Do some crooks plan their vacations on a "same time, next year" basis,
like the Chicago Cubs in late October?
Mike Cook, vp of products for ID Analytics, can't be sure. But from the
identity verification vendor's new research into the behaviour and techniques
of organized fraud rings, it certainly appears these criminals take a
post-holiday respite from fobbing off fake or stolen names to banks,
cell-phone companies and credit card issuers. "We don't know why," admits
Cook. "They'll be very active throughout the year, be really active in the
third or fourth quarter, but for some reason they take January and February
off." (Read
more...)
2003
Profiling serious fraud offenders
JUNE 2003:
Serious Fraud in Australia and New Zealand is a report
presenting the results of a study by the Australian Institute of
Criminology and PricewaterhouseCoopers of serious fraud cases that
went to court in Australia and New Zealand in 1998 and 1999. There
were 155 completed files identified from police and prosecution
agencies throughout Australia and New Zealand involving serious
fraud offences (generally involving sums in excess of $100,000).
The general profile of the 183 persons convicted of serious fraud
offences was that they tended to be in their mid-40s and male. A
large proportion of offenders were born in either Australia (43 per
cent) or New Zealand (23 per cent) and had completed secondary
education (55 per cent) or had some professional qualification (41
per cent). Serious fraud offenders were more likely to be a
director of a company or involved in accounting duties within an
organisation and to have relatively stable employment. Serious
fraud offenders were also more likely to have no prior criminal
record (56 per cent), act alone in the commission of the offence
(84 per cent) and be motivated by greed (40 per cent) or gambling
(23 per cent). (Read
more...)
MAY 2003: CRUNCHING THE NUMBERS PLAYS A ROLE IN
ANY FRAUD INVESTIGATION, BUT A VITAL ELEMENT IS UNDERSTANDING THE SUSPECT
Dan Kerr had a towering ego. That was one of the reasons he was the
top salesperson with Forrest Machinery Ltd., a medium-sized company
that sold heavy equipment in Northern Ontario. But that same
egocentricity was also the source of his downfall subsequent to an
investigation of suspected wrong-doing at the company that had
employed Kerr for almost two decades. (Read
more...)
2003: The key to
dealing with fraud is to focus on prevention. It is much less
expensive and more effective to prevent fraud from happening than
it is to try to detect the crime. By the time the fraud is
discovered, the money is usually already gone and chances are it
will not be recovered. Furthermore, it is costly and time consuming
to investigate a fraud.
But if we can
prevent fraud from occurring in the first place, we avoid all those
losses, and we save the time and effort of trying to reconstruct
fraudulent transactions, track down the perpetrator, and reclaim
missing funds.
In order to
prevent fraud, we must first understand why it occurs. What causes
people to steal from their employers or to "cook" the books? Most
people would say fraudsters are motivated by greed, but generally
speaking, greed is not the primary motivator.
To understand
why employees, managers, and executives commit fraud, we must
understand the fraud triangle. (Read
more...)
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