The Fraud Culture: Organization, People and our Society

The Fraud Culture Global Forensic Insttute Ltd 2 What is Fraud? What is the Fraud Culture? The Red Flags of a Fraud Culture

Global Forensic Insttute Ltd 3

Fraud any artifice or deception practiced to cheat, deceive or circumvent another to detriment. involves the use of dishonest or deceitful words/conduct in order to obtain an unjust advantage over someone else. commonly known as white-collar crimes. Global Forensic Insttute Ltd 4

5

What the fraudsters say: “I am just borrowing the funds”. “I am not hurting anyone the organization/government can afford it.” “I am underpaid so it is my bonus.” “Everyone else is doing it so why not.” “The company is insured and would not lose.” Global Forensic Insttute Ltd 6

Occupational fraud Defined as internal fraud, or fraud committed by a person against the organization for which he or she works. The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets. Global Forensic Insttute Ltd 7

Examples Occupational Fraud Larceny by clerks; Embezzlement (Skimming cash); False Accounting; Payroll padding; Billing Schemes; Switching of genuine currency for counterfeit Stealing of confidential data to facilitate identity theft or industrial fraud; Forgery of authorization documents; and Uttering of forged medical certificates; Global Forensic Insttute Ltd 8

The Culture Management does not directly tell employees to commit fraud Management can unwittingly create an environment where fraud breeds. Management is responsible for setting the tone for behavior and ethics in an organization and managers are the role models. If these role models fail to show good judgment and ethics then the staff has no direction to follow. Global Forensic Insttute Ltd 9

High and Low fraud risk environments VariableHigh Fraud Potential Low Fraud potential Management StyleAutocraticParticipative Management Orientation Low trust Power driven High trust Achievement driven Distribution of authority Centralised, reserved by top management Decentralised, dispersed to all levels PlanningCentralised Short range Decentralised Long range Global Forensic Insttute Ltd 10

PROFILE OF A FRAUDSTER Missing documents (Board minutes, invoices, files, contracts, and other source documents) Long-term employee, who knows how the company operates. Individual is in a position of trust/authority (as individuals have signing/ procurement authority). Individual works excessive overtime (often unnecessary) and does not claim for it. Individual hardly wants to take a vacation; has to be forced and or encouraged to take a vacation. Comes to work early stays late. Visits by suspicious persons Regular audit exception reports Global Forensic Insttute Ltd 11

Fraud Schemes in Trinidad and Tobago (i) Forged identification (ii) Forged certification (iii) False supporting documents (iv) Photocopied or faxed receipts (v) Investment scams (vi) Money Laundering schemes (vii) Forged currency Global Forensic Insttute Ltd 12

Global Forensic Insttute Ltd 13

Global Forensic Insttute Ltd 14

Global Forensic Insttute Ltd 15

Global Forensic Insttute Ltd 16

Global Forensic Insttute Ltd 17

2014 Trinidad and Tobago Global Forensic Insttute Ltd 18

2014 Trinidad and Tobago Global Forensic Insttute Ltd 19

Fraud: Trends and Culture in Australia Global Forensic Insttute Ltd 20 FEDERAL AGENT ADAM MARSDEN FRAUD & ANTI-CORRUPTION

CULTURE Australians awareness of fraud has been increasing Fraud Awareness Weeks Increase media reporting Close collaboration of dedicated fraud departments in both private and public sectors. Australian Federal Police, in conjunction with partner agencies have created a Fraud and Anti-Corruption Centre enabling efficient and thorough correspondence between partner agencies. The bank and finance industry, a forum known as the Inter-Bank Fraud Network was created for the purpose of sharing current trends and offering solutions through experience gained through previous investigations. Global Forensic Insttute Ltd 21

Trends Australia sees cycles of trends The production of fraudulent cheques to purchase good at department stores Short term issues and often cease after the methodology has been reported in media A re-emergence of these same offences after about 2-3 years of no activity. Australia usually sees two types of attacks in relation to fraud; cyber, and physical Global Forensic Insttute Ltd 22

Physical fraud Local The offenders and syndicate members are more often than not of Asian decent – most likely due to the close proximity Australia is to Asia. Once Asian offenders have served their time in gaol, and if they are deported to their country of origin, they will usually change their names, gain a new passport and return to Australia to continue their criminal activities. Global Forensic Insttute Ltd 23

Foreign Foreigners, such as the Romanians, will travel to Australia with the purpose of criminal activity. E.g. the increase in credit card skimmers used on ATM’s and retail outlets to gather credit card identification The offenders then use these details to purchase high value items such as electronic goods and perfumes. Global Forensic Insttute Ltd 24

Global Forensic Insttute Ltd 25

Global Forensic Insttute Ltd 26

Global Forensic Insttute Ltd

@gillian_ash Global Forensic Insttute Ltd