Sep 13 2008
Fraud Schemes - 6 Main Types Of Occupational Fraud
Occupational Fraud: The use of ones occupation for personal enrichment through the deliberate misuse or misapplication of the employing organizations resources or assets.\r -The key to occupational fraud is that the activity:
\r a. Is clandestine
\r b. Violates the employees fiduciary duties to the organization
\r c. Is committed for the purpose of direct or indirect financial benefit to the employee
1. Employee Embezzlement
\r -Most common type of occupational fraud (more than 80% of frauds)
\r -Employees deceive their employer by taking company assets.
\r -Cash most targeted asset, taken 90% of the time
Occupational Fraud can be either direct or indirect
\r -Direct Fraud: employee steals company cash, inventory, tools, supplies, or other assets, or establishes dummy companies and have employers pay for goods that are not actually delivered Does not use a 3rd party, the money goes straight to perpetrators pockets.
-Indirect Fraud: employees take bribes or kickbacks from vendors, customers, or others outside the company to allow for lower sales prices, higher purchase prices, nondelivery of goods, or the delivery of inferior goods. Usually payment to employees is made by organizations that deal with the perpetrators employer, not the employer itself.
2. Management Fraud
\r -Usually fraud by top managements deceptive manipulation of financial statements
3. Investment Fraud
\r -Closely related to management fraud
\r -Fraudulent and usually worthless investments are sold to unsuspecting investors.
\r -Charles Ponzi is father of investment scams
\r -In 2000, more than $5 billion lost from telemarketing fraud
\r -Recent mutual fund frauds were investment scams using market timing and late trading
\r -Illegal market timing is an investment technique that involves short term in-and-out trading of mutual fund shares. This technique has caused losses to long term mutual fund investors of approximately $5 billion per year.
\r -Late trading allowed selected investors to purchase mutual funds after 4 pm using that days Net Asset Value (NAV) rather than the next days NAV that is required under law. Investors would capitalize on positive earnings news and then were allowed to immediately reap the benefit of the stocks upward movement the following day.
4. Vendor Fraud - 2 types
\r a. Fraud perpetrated by vendors acting alone
\r b. Fraud perpetrated through collusion between buyers and vendors
\r Usually results in either overcharge for purchased goods, \r shipment of inferior goods, or nonshipment of goods even though \r payment is made
5. Customer Fraud
\r -Customers either do not pay full price for goods purchased, they get something for nothing, or they deceive organizations into giving them something they should not have.
6. Miscellaneous Fraud
\r -Fraud that doesnt fit into first five types and may have been committed for reasons other than financial gain
Charles Ponzi - The Godfather Of The Ponzi Scheme
Ponzi schemes are hot and even its illegal they always will be hot.
if you go to some online forums on how to make money onl...
What is Qui Tam?
Qui tam is a legal term used to describe whistle blower claims. Qui Tam is actually an abbreviation for the Latin phrase qui...
What You Have Been Dying To Know About Fraud
Since the inception of the information technology and the technological advancement of the marketing industry, many people ar...
When to Avoid Fraudulent Medical Insurance Work From Home Jobs
Getting a job concerning medical insurance on work from home jobs is a practical choice these days. Among the many home-based...
Beware Of Anyone Wanting A Currency Exchange With The Same Bank
Most of the frauds people are aware of in e-currencies is that whereby the scammer, pays for an item from a reversible e-curr...
Paid Survey Fraud and Opportunities
Paid survey and ebay were among the first things that came to my mind 2 years ago when I decided to embark on creating altern...
Make Money With Paypal By Joining Paid Online Survey Sites
As you might have known, you can easily make money with Paypal by joining paid online survey sites. Paypal is by far the bes...
Are Paid Online Surveys Scams
Are paid online surveys scams or are they a legitimate way to make some money from home? The answer is that they are legitima...
How A Home Owner Insurance Company Looks At Your Credit Rating
Before a home owner insurance company issues you a policy, they will most likely check your credit rating. They have a syste...
Ethics - Perspective Of A Felon
Does it come as a big surprise that a convicted felonindeed, a white collar criminalwould have developed some thoughts about ...
Vice of Buggery at FTC
At the Federal Trade Commission we have seen attorneys who suffer from the vice of buggery get promoted to higher and more im...
What is a Statute of Limitations?
What is a statute of limitations? It is a legal deadline to file a lawsuit. The timeframes are defined by laws, written as ...
Pre-Employment Screening: The Watchful Eye That Mitigates HR Risk
Education qualification is one of the intrinsic factors on which an organization bases the eligibility and remuneration of an...
Attachment: The 8 Badges of Fraud
Few things are more frustrating to creditors than debtors transferring assets to affiliated entities in order to avoid collec...
How to Protect Your Business from Credit Card Fraud
Everywhere you look there is information on how individuals can protect themselves from credit card fraud. This information c...
Real Estate Investing Ethics - When is Lying Just Being Creative?
Here's the story. An investor- we'll call him "Bill"- was preparing to close on an investment property. He received a copy of...
Who Owns the Mortgage Can Foreclose - But What if No One Knows Who Owns the Mortgage?
There has been such a backlash against the subprime mortgage market that even homeowners in foreclosure have realized the fra...
Fraud and Corruption - A Strategic Direction
Nobody likes to be misled, especially by people they trust or have an expectation will do the right thing, whatever that is. ...
Get Paid For Filling Out Surveys Online
Companies are willing to pay you for the time you spend for them. Most of the reputed paid survey sites are online divisions ...
Equity Stripping in Minnesota
In recent years, this practice has become more commonplace due to rapidly increasing housing prices combined with high forecl...