Tag Archive for: Fraud

Fraud Happens. Learn the Facts.

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Even your most trusted employee could be tempted to commit fraud under the right circumstances. Make sure you know how to prevent that from happening.

We’ve written a lot about the fact that fraud happens in small businesses. Often times people think, “it could never happen to me”, but it does and recovering the money is no easy task.

According to the ACFE’s Report to the Nation, more than 3/4s of the frauds reported in their study were committed by employees who worked in one of the following six departments: accounting, operations, sales, executive/upper management, customer service, or purchasing. In 2012, employees were found to be the fraudsters 43% of the time, managers 34.3%, owners/executives 18.5%, and others 4.2%.

Ensuring that you have a system of checks and balances between departments and between position levels can help deter fraud. Just because someone is your most trusted employee doesn’t mean they couldn’t or wouldn’t commit fraud. According to the report, fraud by employees resulted in a median loss of $50,000; managers, $150,000; owners/executives, $373,000; and others, $86,000.

And remember, there could be more than one employee involved in the scheme. The study found that in 2012, 32.9% of US cases involved two or more perpetrators, which resulted in median losses of $175,000. Try to segregate duties as much as possible or rotate job duties to try to deter fraud schemes.

To learn more about ways to prevent fraud in your business contact Kit Powell, Certified Fraud Examiner.

 

Kit Powell
Certified Fraud Examiner
231.924.8035
kitp@hscompanies.com



Small Businesses & Fraud – What you need to know

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Don’t let a fraudster break your bank. (Photo Credit: office.microsoft.com)

In the 2012 Report to the Nations, the Association of Certified Fraud Examiners surveyed their membership and reported on 1,388 cases they investigated. The findings shed light on the most prevalent forms of fraud across the world (this survey provides information from nearly 100 countries on six continents), and we feel can help guide business owners in what they should be watching for in their own companies.

One of the more disturbing findings, showed that small businesses suffered the largest median losses. According to the survey, 49% of organizations that fell victim to an occupational fraud scheme did not recover any money. Furthermore, 87% of the perpetrators had never been charged or convicted of a fraud-related offense. 87% of cases in the study were asset misappropriation schemes, which are things like falsifying wages, overstating expenses, taking multiple reimbursements, stealing cash on hand, etc.

Preventing fraud, or catching it early, should be a small business owner’s goal. We understand implementing such systems can be costly and overwhelming but they are worth it. Here are three easy things you can do to help prevent fraud in your organization:

  • Implement a confidential employee tip line. According to the survey, employee tips are the most common way occupational fraud is detected. Make sure your employees have a safe way to report suspicious activity should they see it.
  • Educate employees and managers on what constitutes fraud. Most people want to do the right thing, make sure they know what that is.
  • Assess the areas in your organization that are the most susceptible to fraud, and then work on investing further to protect those areas.

 

For more information and tips on preventing fraud, check out these additional resources:


A simple fraud risk assessment — performed by Kit Powell, Certified Fraud Examiner — will give you a detailed report with recommendations on how to strengthen internal controls to prevent fraudulent activity. Contact Kit today to schedule an appointment for your fraud risk assessment.

 


231.924.8035
kitp@hscompanies.com



Small Businesses & Fraud – What you need to know

/in /by




Don’t let a fraudster break your bank. (Photo Credit: office.microsoft.com)


In the 2012 Report to the Nations, the Association of Certified Fraud Examiners surveyed their membership and reported on 1,388 cases they investigated. The findings shed light on the most prevalent forms of fraud across the world (this survey provides information from nearly 100 countries on six continents), and we feel can help guide business owners in what they should be watching for in their own companies.
One of the more disturbing findings, showed that small businesses suffered the largest median losses. According to the survey, 49% of organizations that fell victim to an occupational fraud scheme did not recover any money. Furthermore, 87% of the perpetrators had never been charged or convicted of a fraud-related offense. 87% of cases in the study were asset misappropriation schemes, which are things like falsifying wages, overstating expenses, taking multiple reimbursements, stealing cash on hand, etc.
Preventing fraud, or catching it early, should be a small business owner’s goal. We understand implementing such systems can be costly and overwhelming but they are worth it. Here are three easy things you can do to help prevent fraud in your organization:

  • Implement a confidential employee tip line. According to the survey, employee tips are the most common way occupational fraud is detected. Make sure your employees have a safe way to report suspicious activity should they see it.
  • Educate employees and managers on what constitutes fraud. Most people want to do the right thing, make sure they know what that is.
  • Assess the areas in your organization that are the most susceptible to fraud, and then work on investing further to protect those areas.

 
For more information and tips on preventing fraud, check out these additional resources:


A simple fraud risk assessment — performed by Kit Powell, Certified Fraud Examiner — will give you a detailed report with recommendations on how to strengthen internal controls to prevent fraudulent activity. Contact Kit today to schedule an appointment for your fraud risk assessment.
 

231.924.8035
kitp@hscompanies.com


Small Businesses & Fraud – What you need to know

/in /by




Don’t let a fraudster break your bank. (Photo Credit: office.microsoft.com)


In the 2012 Report to the Nations, the Association of Certified Fraud Examiners surveyed their membership and reported on 1,388 cases they investigated. The findings shed light on the most prevalent forms of fraud across the world (this survey provides information from nearly 100 countries on six continents), and we feel can help guide business owners in what they should be watching for in their own companies.
One of the more disturbing findings, showed that small businesses suffered the largest median losses. According to the survey, 49% of organizations that fell victim to an occupational fraud scheme did not recover any money. Furthermore, 87% of the perpetrators had never been charged or convicted of a fraud-related offense. 87% of cases in the study were asset misappropriation schemes, which are things like falsifying wages, overstating expenses, taking multiple reimbursements, stealing cash on hand, etc.
Preventing fraud, or catching it early, should be a small business owner’s goal. We understand implementing such systems can be costly and overwhelming but they are worth it. Here are three easy things you can do to help prevent fraud in your organization:

  • Implement a confidential employee tip line. According to the survey, employee tips are the most common way occupational fraud is detected. Make sure your employees have a safe way to report suspicious activity should they see it.
  • Educate employees and managers on what constitutes fraud. Most people want to do the right thing, make sure they know what that is.
  • Assess the areas in your organization that are the most susceptible to fraud, and then work on investing further to protect those areas.

 
For more information and tips on preventing fraud, check out these additional resources:


A simple fraud risk assessment — performed by Kit Powell, Certified Fraud Examiner — will give you a detailed report with recommendations on how to strengthen internal controls to prevent fraudulent activity. Contact Kit today to schedule an appointment for your fraud risk assessment.
 

231.924.8035
kitp@hscompanies.com


Case Study: Ex-Marriott Worker gets 1 year, 1 day in jail for embezzlement

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Internal Controls can help prevent fraud from happening in your organization. (Photo Credit: office.microsoft.com)

A former Marriott International employee was sentenced to one year and one day in jail on Friday for embezzling money from the company, according to a story by Erica W. Morrison posted on Washington Post’s The Crime Scene blog

The employee, Lorraine Wakefield, 51, was able to embezzle $400,000 to $1,000,000 through her position of maintaining corporate credit card expenses, travel expenses, and reimbursements requests for Marriott executives.

This case serves as a good reminder of the measures all businesses should take to protect themselves. Even the most trusted of employees can commit a crime. Remember to have system of checks and balances in place to help prevent fraud from happening in your organization.

If you don’t have a system, or if you feel that the system you have is weak, a simple fraud risk assessment — performed by Kit Powell, Certified Fraud Examiner — will give you a detailed report with recommendations on how to strengthen internal controls to prevent fraudulent activity.

Contact Kit today to schedule an appointment for your fraud risk assessment via phone at 231.924.8035 or email at kitp@hscompanies.com.

Ex-Marriott worker gets 1 year, 1 day in jail for embezzlement



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