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Profile of a Perp



Occupational Fraudsters
To learn more about fraud, or to schedule your free fraud risk assessment, contact Kit Powell.

Kit Powell
Certified Fraud Examiner
616.735.3104
kitp@hscompanies.com



‘Tis The Season To…Hire Temporary Employees



Background checks help protect employers

Background checks help protect employers

USA Today reported, “six of the largest store chains in America will together add more than 300,000 temporary workers during the season to account for the expected higher volume of shoppers”. According to MSNBC, Amazon alone is hiring 50,000 employees for the holiday season. That’s a lot of new faces for employers to keep track of!

While this time of year is busy for stores looking to hire people quickly, some forget one important step — background checks. The ACFE reports that small businesses lose $2.9 trillion annually because of fraud committed by their own workers.  Background checks are one way to help prevent fraud from happening to you.

When running a background check, the first thing to consider is whether you want to run a state or national background check.  When making this decision, keep in mind that a state background check will not show if crimes were committed outside that respected state and may not show a clear picture of the individual’s activities.

Before implementing a background check, your company should have policies regarding best practices and industry requirements. In the policies, it should state what types of crimes would cause you to retract an employee offer. It is best to run a check after an offer is made with a clause that employment is pending results that are in align with your specific policies.

H&S Companies facilitates background checks with real time processing. Our software pulls data from a national database and provides accurate reports of convictions.

For more information, check out the following articles:

To learn more about preventing fraud in your business, contact Kit Powell.

Kit Powell
Certified Fraud Examiner
616.735.3104
kitp@hscompanies.com



Bank Teller Pleads Guilty to Embezzling More Than $100,000




check

Don't leave checks out. Make sure you lock them up in a safe place.

On Monday, October 5th, Tammy Lumbard was sentenced to 12 months and one day in prison, as well as, four years supervised release for embezzling more than $100,000 from Huntington Bank.  Lumbard, a former Huntington Bank teller supervisor and universal banker, took the money by forging and cashing checks from various customer accounts.

As we head into the holiday season it’s important to take steps to protect yourself and your business from fraud. According to the ACFE’s Report to the Nations, in 2011, check tampering was the scheme of choice in 22.4% of cases for businesses with more than 100 employees and 7.6% of the time for businesses with fewer than 100 employees.

Remember, the following actions can help prevent check tampering schemes in your business:

  • Keep the checkbook locked up and limit access.
  • Institute a system of checks and balances. Have one person prepare the checks and another review the invoices and sign the checks.
  • Scrutinize financial statements. If something doesn’t look right, investigate further.

If you’re concerned fraud may be occurring in your business, or are interested in learning more about preventing fraud, contact Kit Powell.

Kit Powell
Certified Fraud Examiner
231.924.8035
kitp@hscompanies.com



Protect Your Non-Profit From Fraudsters



Donation

Little do they know, he’s going to pocket that money.

A common problem for churches and not-for-profit organizations is embezzlement, which occurs because decision makers are often times too trusting, internal controls are lacking, and even the simplest checks and balances are not in place. Because these organizations want to welcome and trust everyone, fraudsters can easily take advantage of their goodwill. Most fraudsters place themselves in multiple groups in a church and gain the “trust” of fellow members.

Once the trust is there, fraudulent activity is easier to pull off. I have worked with several churches and not-for-profits that have had the same answer as to why they were defrauded:  “I never thought he/she would steal from us”, “we trusted him/her”, “She is a good person”, “outstanding Christian”.

Be sure to not give church group members too much access to money and other valuables without church staff present.

Employees working for not-for-profits and church organizations have also been known to commit fraud. According to the Association of Certified Fraud Examiners, in 2012 the median loss for not-for-profits from fraudulent activity was $100,000. There are many factors that drive people to commit fraud. Red flags include:

  • Extraordinary medical expenses of the employee or a family member
  • Loss of spouse’s employment
  • Financial struggles of children
  • Divorce Gambling problems

It’s important to know what may be going on in the lives of personnel that have the potential to appropriate assets of your business for their personal use. Remember the importance of internal controls! Things like segregating job duties, rotating job duties, and instituting a system of checks and balances can all help deter fraud. Overall donations and contributions have been down the past couple years, the last thing a not-for-profit organization needs is embezzlement to occur.

If you are concerned about fraud in your not-for-profit, contact Kit Powell

Kit Powell
Certified Fraud Examiner
231.924.8035
kitp@hscompanies.com



After An Employee Embezzles…



Ways Fraud is Discovered

Tips for preventing fraud, as well as, the top ways fraud is typically detected.

Embezzlement has been the number one financial crime for the past 30 years.  If an employee embezzles, then the employer has already lost. Of those losses the employer suffers a financial loss, a loss of trust, and additional revenue loss from litigation matters that follow the embezzlement. To avoid embezzlement embarrassment, employers have to move quickly, as the financial impact will likely have a greater effect than was first suspected. The employer has to stop the damage quickly and conduct a fraud examination.  If stockholders are involved then the employer has the responsibility to investigate and recover the losses. If you have an embezzlement issue come up, follow these three steps in order:

Contact Legal Counsel and Your Insurer

Contacting legal counsel is an important first step because sometimes the employee’s rights can be violated even though they were the one who committed the crime. Contact your insurer also because failure to do so could void potential losses from being covered.

Secure Data

A fraud auditor will know what information and data to secure and back up. A good start for an employer is to do the following:

  • Create a mirrored hard drive of the employee computer
  • Secure electronic backups in the network and local drives of original data
  • Secure CDs, disks, thumb drives, etc.
  • Search the offending employee’s desk and office for any sensitive information (review handbook policies with attorney first)

Deal with the Employee

Management should follow their legal counsel’s advice in dealing with the employee as swiftly as possible.

Remember, fraudulent activities are easier to prevent than to detect. Make sure you have a plan in place, and know what to do should fraud occur in your business.

To learn more about preventing fraud in your business, contact Kit Powell

Kit Powell
Certified Fraud Examiner
231.924.8035
kitp@hscompanies.com



H&S Companies July Newsletter is Now Available



The Embezzler (back)


The Embezzler (front)


The H&S Companies Fraud Division is pleased to present the first edition of The Embezzler. Look for The Embezzler quarterly, with fraud related news and tips.

In This Issue:

Expense Report Embezzlement
After They Embezzle…
Prevent Bad Hires with Background Checks
Protect Your Non-Profit from Fraudsters
Click here to download.

H&S Companies July Newsletter is Now Available



The Embezzler (back)


The Embezzler (front)


The H&S Companies Fraud Division is pleased to present the first edition of The Embezzler. Look for The Embezzler quarterly, with fraud related news and tips.

In This Issue:

Expense Report Embezzlement
After They Embezzle…
Prevent Bad Hires with Background Checks
Protect Your Non-Profit from Fraudsters
Click here to download.

H&S Companies July Newsletter is Now Available


The Embezzler (back)

The Embezzler (front)

The H&S Companies Fraud Division is pleased to present the first edition of The Embezzler. Look for The Embezzler quarterly, with fraud related news and tips.

In This Issue:

Expense Report Embezzlement
After They Embezzle…
Prevent Bad Hires with Background Checks
Protect Your Non-Profit from Fraudsters

Click here to download.

Background Check Implementation List



Click here to download H&S Companies’ list of things to consider when implementing a background check.



Occupational Fraud Doesn’t Just Strike Small Business



Corruption schemes are the most popular form of fraud in governmental units.

Occupational Fraud doesn’t just strike small businesses; governmental units are susceptible as well. In the Association of Certified Fraud Examiners’ Report to the Nations, they found that corruption schemes, such as kickbacks, were the most popular form of fraud among government and public administration positions. Billing schemes, such as using fake companies to send bills to governmental units, stealing inventory, skimming money, and expense reimbursement schemes were the next most popular.

Those in government positions need to remember to put fraud controls in place. Rotating financial duties among employees, creating a system of checks and balances, and assessing and protecting areas susceptible to fraud are all important parts of preventing it from happening. To learn more, contact Kit Powell today.

Kit Powell
Certified Fraud Examiner
231.924.8035
kitp@hscompanies.com