To combat fraud effectively, you first must understand what it is and how it occurs. For our purposes, the definition of fraud from Wikipedia is sufficient:
In law, fraud is deliberate deception to secure unfair or unlawful gain. Fraud is both a civil wrong (i.e., a fraud victim may sue the fraud perpetrator to avoid the fraud and/or recover monetary compensation) and a criminal wrong (i.e., a fraud perpetrator may be prosecuted and imprisoned by governmental authorities).
In other words, fraud requires the perpetrator to use trickery, deceit, or lies to obtain some form of benefit – often money directly, but it could be other benefits, such as health insurance, a job, merchandise, better stock value for the company, etc.
Now, there are as many different types of fraud as there are things to lie about. For now, I will focus on the types of fraud and related forms of theft that specifically target the business and the workplace. I’ll begin with the most common types of employee fraud: Asset misappropriation, embezzlement, and employee theft.
Asset Misappropriation, Embezzlement, and Employee Theft
Generally, these types of fraud/theft affect either the company’s cash or its inventory or physical assets. Frauds affecting the company’s cash or revenues include the following:
Frauds affecting the company’s inventory include the following:
In a future blog post, I’ll summarize fraud in the form of falsified financial and business statements and corruption.
For more information on fraud schemes and how you can protect yourself, contact Radius Investigations at 1-888-698-0077, or [email protected].