Fraud Feed
Below you'll find various articles and resources on all things fraud. I try to update this page periodically when a news story breaks and catches my eye. With each story, I'll share my professional expertise as a CPA and Certified Fraud Examiner on techniques that could have been implemented to prevent/deter the fraud. If you find the takeaways useful and want a more customized training for your organization, let's connect. I use publicly-available cases to provide real-life examples, including an Excel-based case study where participants can find the fraud themselves! If you want more detailed case studies, I can connect you with my former employer; the team has hundreds of private cases and dozens of case studies, including the "real fake documents" identified in their investigations.
September 30, 2024 - Surprise, Surprise, Animal Abuser Also Steals
The key recommendation: When doing business with another entity (even if that means donating to a charitable organization), make sure they're providing the services or goods that you're paying them for!
Bonus recommendation: Don't steal from your mom. And don't be an animal abuser.
As a dog dad, I'm really holding back on some personal thoughts about this person. However, I'll keep it short and sweet and to the fraud point. She "allegedly" used a non-profit status to take $50K in supplies and cash. On top of that, she stole over $160K from her mom, which doesn't even include the credit card debt she also amassed in her mom's name, for personal expenses.
So what should you take away from this story? Vet (animal pun intended) your vendors if you're a business. Getting their I-9 is a good first step, but doesn't mean your diligence is done. Make sure they have a website. Look for reviews online. If it's a non-profit, check them on Guidestar. If you're spending a substantial amount of money with a vendor, consider putting in vendor audit clauses or mandated vendor site visits into your contract. I imagine most of the donations to this lady were from individuals with big compassion for dogs, but imagine if it turned out that your company's "charitable organization of the month" was something like this. You'd probably have a lot fewer employees willing to help out.
September 6, 2024 - The Personal Assistant
The key recommendation: As a business owner or executive not involved in the day-to-day finances, pick 10 checks a month and review the payee to make sure they're reasonable. Same goes for credit card transactions and other banking activity. Make sure your finance employees know you're doing this.
Bonus recommendation: If you're going to get arrested for embezzlement, look proudly into the camera. You got away with it for so long, might as well have some pride!
A classic tale of using a company credit card and bank access for personal use (allegedly. Throwing that in there as a disclaimer. Innocent until proven guilty.) If you're going to grant others in your organization signatory authority (or even if you're a large organization with many signatories), you need to be reviewing bank activity regularly. I'm not saying you should look at every transaction, as nobody has that kind of time, but at least look at a sample. For example, let's say you're a real estate company like this one. If you see payments to Louis Vuitton, you may want to take a closer look. While that may sound simple, it is amazing how many frauds of this nature occur just like it! Note that this article doesn't indicate how the funds were spent other than for personal use, but luxury goods are often tied to these schemes. Why not buy a $2,000 bag when it's not your money?
