Owner: Executive Fraud Blog URL:http://www.executivefraud.com Join Date: Mon, 30 Apr 2007 14:48:55 -0500 Rating:0 Site Description: Executives that commit fraud are stealing out of your pocket! Learn about fraud protection from this blog for things such as credit card fraud. Awareness is crucial to ensure that they are not allowed to continue committing fraud. Site statistics:Click here
Occupational Fraud - Common Motivators to Commit Fraud 2007-04-29 19:29:37 http://www.executivefraud.com/Fraud_Blog.php/2007/04/29/occupational_fraud_common_motivators_to_From a study by Keith Howe, Marshall Romney, and Steve Albrecht, the following are the most common motivations of perpetrators of occupational fraud:
1. Living beyond one's own means
2. An overwhelming desire for personal gain
3. High personal debt
4. Close relationships with customers
5. A feeling of inequity of payment and contribution to employer
6. A wheeler-dealer attitude
7. Strong challenge to beat the system
8. Gambling problems
9. Pressure from family or peers
Published in their book Deterring Fraud: The Internal Auditor's Perspective Read more:Common
Voting Fraud: What the Public Should Really be Concerned About During Elections 2007-04-25 14:06:17 http://www.executivefraud.com/Fraud_Blog.php/2007/04/25/voting_fraud_what_the_public_should_realGovernment Focus on Individual Voting
Fraud
Critics recently have claimed that the government's decision to target individuals in suspected voting fraud has been an attempt to deter voting of minorities and the poor. The New York Times claims that there were only 86 voting fraud convictions in the last year therefore is not as pervasive and the type of person "illegally" voting is not the type of "criminal" officials have lead the public to believe. One particular case cited was a woman on probation that when she went to vote was unaware that in that particular state it was against the law. After an attempt to rescind her vote she was denied that right and later charge for voting fraud. Another example is of a foreign US resident that was given a voting registration care upon completing his driver's license renewal at the DMV. After sending in the application he was later deported f Read more:Public
, Elections
Executive Roadmap to Fraud Prevention and Internal Controls: Creating a Culture of Compliance 2007-04-25 14:05:26 http://www.executivefraud.com/Fraud_Blog.php/2007/04/25/executive_roadmap_to_fraud_prevention_an_1
Executive
Roadmap to Fraud Prevention and Internal
Controls: Creating
a Culture of Compliance
by Martin T. Biegelman, Joel T. Bartow
"Our nation is faced with dual alarming trends of record highs in white-collar crime and seemingly record lows in ethics. The solution cannot be left only to legislators, regulators, and law enforcement. It requires the attention of all of us in business to create a culture of compliance. This new book by Martin Biegelman and Joel Bartow is an invaluable resource to achieving the highest levels of compliance."
--Kenneth J. Hunter, former chief postal inspector and former president & CEO of the Council of Better Business Bureaus
Forensic And Investigative Accounting 2nd Edition by D. Larry Crumbley 2007-04-16 18:20:43 http://www.executivefraud.com/Fraud_Blog.php/2007/04/16/forensic_and_investigative_accounting_2n
Forensic
And Investigative Accounting by D. Larry
Crumbley, Lester E. Heitger, G. Stevenson Smith
"Forensic accounting" is a growing area of practice in which the knowledge, skills and abilities of advanced accounting are combined with investigative expertise and applied to legal problems. Forensic accountants are often asked to provide litigation support where they are called on to give expert testimony about financial data and accounting activities. In other more proactive engagements, they probe situations using special investigative accounting skills and techniques. Some even see forensic accounting as practiced by skilled accounting specialists becoming part and parcel of most financial audits--an extra quality control step in the auditing process that will help reduce financial statement fraud. CCH's Forensic and Investigative Accounting (2nd Edition
) is a complete and readily teac
Tax Fraud - IRS Allows Criminals to Avoid Prosecution 2007-04-16 18:13:30 http://www.executivefraud.com/Fraud_Blog.php/2007/04/16/tax_fraud_irs_allows_criminals_to_avoid_Estimated $100 Billion in tax fraud involved in shifting assets offshore
If that is the case then why is this not under investigation? The IRS has recently admitted that they are under constrained resources and have opted for more high profile investigations then tracking those tax shelters that hide assets off shore. The decline in prosecution referrals to the Justice Department has continued over the last 4 years following some of the highest shortly around the tech bust in 1999-2000. The referrals were totaling 3,037 in 2004 and have dropped to 2,720 by 2006, a decrease of 10%.
Critics of the decision to only target higher profile incidences claim that the threat/concern of getting caught wears off when there is a acknowledgement of lower investigations. Proponents of the high profile strategy offer examples of some of the recent success:
Walter Anderson - convicted of $170M due in Read more:Criminals
, Avoid
, Prosecution
Mortgage Fraud and Identity Theft - DreamLife Financial Executive Fraud 2007-05-02 02:22:13 http://www.executivefraud.com/Fraud_Blog.php/2007/05/01/mortgage_fraud_and_identity_theft_dreamlThe Former CEO with DreamLife Financial
was ordered to repay $6.7 million to lenders and clients that had been defrauded. Beyond repayment, Tony Daniloo has been sentenced to 7 1/2 years in prison for 122 counts of fraud and money laundering. The most disappointing part of this scandal is that Tony used the identities of his family members in order to hide the fraud. Read more:Mortgage
, Executive
, Mortgage Fraud
Asset Misappropriation - Skimming 2007-05-01 18:01:32 http://www.executivefraud.com/Fraud_Blog.php/2007/05/01/asset_misappropriation_skimming
Skimming
is the removal of cash for a victim company before the transaction is entered into the accounting system. Since skimming is an off the books type of fraud (it is never recorded) there is no direct audit trail therefore making the fraud difficult to detect. The employees with an opportunity to commit skimming schemes are those who deal directly with customers or those that handle their payments. This article will cover the four main categories of skimming schemes and discuss some of the red flags for detection of the fraud.
Unrecorded Sales
The most common form of skimming is not recording the sale of goods but collecting the money from the customer. Despite controls such as register tape, managers, and surveillance equipment, employees may be able to manipulate the system in order to prevent fraud detection. In some examples of unrecorded sales, the fraudster manipulates the registe Read more:Asset
Securities Fraud - Stock Scheme that Uses Your Computer 2007-05-05 19:29:45 http://www.executivefraud.com/Fraud_Blog.php/2007/05/05/securities_fraud_stock_scheme_that_uses_Many of you may have been exposed to the original online stock scheme where spammers will send out stock picks on penny stocks creating buzz that artificially drives up the price of these worthless stocks. As the price hits the daily high the spammers liquidate their own holdings and walk away with the profits leaving those buyers with the worthless stock. This old fraud scheme has been manipulated and redirected at users of public computers specifically hotel users.
Online criminals have developed software that will track the key strokes of these computers especially when these guests are checking out their online portfolio accounts. By stealing their accounting identity the fraudsters are able to buy large holdings in these penny stocks to drive up the price then they are able to liquidate their position while leaving the stolen account stuck in the those stocks. Companies such as E Read more:Securities
, Stock
, Scheme
, Computer
Student Loan Fraud - Financial Aid 101 2007-05-08 04:52:36 http://www.executivefraud.com/Fraud_Blog.php/2007/05/07/student_loan_fraud_financial_aid_101Finding the best financial aid package is never easy. But experts say there are things students and families can do to minimize their debts and avoid problems.
1. Get free money first. Look for grants and scholarships before you assume debt, and don't be shy about asking financial aid staff for help.
2. Use cheaper federal loans before you turn to other forms of debt. Some lenders may encourage you to take out private loans that aren't backed by the U.S. government, but they're typically more expensive than Stafford or Perkins loans.
3. Know yourself. If you're unlikely to pay your bills on time every single month, seek loan discounts - for electronic payments or the waiving of origination and default fees - that don't disappear if you miss a payment.
4. Ask questions and read the fine print. Make sure all the benefits you've been promised will stay with the loan forever, even if it's Read more:Student
, Financial
, Student Loan
Student Loan Fraud - Preferred Lenders of the Financial Aid Office 2007-05-08 04:50:07 http://www.executivefraud.com/Fraud_Blog.php/2007/05/07/student_loan_fraud_preferred_lenders_of_Student
loan fraud has been investigated in the relationships between universities and large financial banks. The cause for concern is that certain universities have been accused of exclusively directing their students to lenders in exchange for revenue sharing opportunities or extravagent gifts related to their role in giving students higher rate loans. From a review of college arrangements with banks done by the St. Petersburg Times explains the following relationships:
- At Florida State University, the financial aid director sits on the advisory board of preferred lender Student Loan
Xpress, which has seen nearly half of its board members suspended by their schools recently for allegedly accepting hefty consulting fees or owning stock.
- With thousands of competing lenders to choose from, Florida A&M University students were, until recently, directed to use one of two lenders ba Read more:Financial
, Lenders
Forensic Accounting and Fraud Investigation for Non-Experts 2007-04-15 17:57:03 http://www.executivefraud.com/Fraud_Blog.php/2007/04/15/forensic_accounting_and_fraud_investigat
Forensic
Accounting and Fraud Investigation for Non-Experts
by Howard Silverstone, Michael Sheetz
A reference for every business professional, Forensic Accounting and Fraud Investigation for Non-Experts, Second Edition is a necessary tool for those interested in understanding how financial fraud occurs and what to do when you find or suspect it within your organization. With comprehensive coverage, it provides insightful advice on where an organization is most susceptible to fraud.
Katrina Fraud - More Indicted on Mail Fraud Charges 2007-04-15 17:52:47 http://www.executivefraud.com/Fraud_Blog.php/2007/04/15/katrina_fraud_more_indicted_on_mail_frauMail Fraud
Louisiana sees another three people recently indicted in federal court for abusing services provided by a hurricane disaster relief program. Of the two charges the most serious one is mail fraud which carries a maximum sentence of 30 years and/or a $1,000,000 fine. The second charge is illegal conversion of government property that was using a FEMA check.
Pretty bad when they are taking away from those that really needed the support during tough times. Read more:Katrina
Guide to Forensic Accounting Investigation 2007-04-14 21:48:07 http://www.executivefraud.com/Fraud_Blog.php/2007/04/15/katrina_fraud_more_indicted_on_mail_frau
A Guide
to Forensic
Accounting Investigation by Thomas W. Golden, Steven L. Skalak, Mona M. Clayton
Today's demanding marketplace expects auditors to take responsibility for fraud detection, and this expectation is buoyed by such legislation as the Sarbanes-Oxley Act and the Auditing Standard (SAS99), which requires increased performance on the part of the auditor to find material financial statement fraud.
Written by three of the best forensic accountants and auditors, Thomas W. Golden, Steven L. Skalak, and Mona M. Clayton, The Auditor's Guide to Forensic Accounting Investigation explores exactly what assurances auditors should provide and suggests alternatives to giving the capital markets more of what they are requiring-greater assurances that the financial statements they rely upon for investment decisions are free of material error, including fraud. It reveals the surprising compl
Healthcare Fraud Settlement: Tenet Healthcare Corp. 2007-04-14 21:26:26 http://www.executivefraud.com/Fraud_Blog.php/2007/04/14/healthcare_fraud_settlement_tenet_healthTenet Healthcare
Corp. recently settled a civil penalty to the Securities and Exchange Commission (SEC) of $10 million. The investigation originated in response to allegations of Medicare fraud that Tenet had inflated the costs of providing care for sick Medicare patients.
In the midst of this fraud was an investigation into an accounting scandal related to managed care contractual reserves. The former CFO has settle a personal investigation for $150k and the CAO has settle a civil penalty as well of $240k.
Looks like they are just paying to get this to go away. I think the SEC should come down harder on them if they truly want to discourage healthcare fraud. The individuals received a slap on the wrist when compared to their incomes as executives. Read more:Settlement
Corporate Fraud Handbook: Prevention and Detection 2007-04-09 13:31:48 http://www.executivefraud.com/Fraud_Blog.php/2007/04/09/corporate_fraud_handbook_prevention_and_
Corporate Fraud Handbook
: Prevention and Detection
by Joseph T. Wells
Emphasizing that it is much more cost effective to prevent fraud than to punish it, Corporate Fraud Handbook: Prevention and Detection, Second Edition explains fraud schemes used by employees, owners, managers, and executives to defraud their customers and illustrates each scheme with real-life case studies submitted to the ACFE by actual fraud examiners who aided in the case resolutions. It shows the reader how to spot the "red flags" of fraud, how to comply with recent regulations including Sarbanes-Oxley, and how to develop and implement effective preventative measures. This new edition contains all new statistics from the ACFE 2006 Report to the Nation as well as new cases.
Tax Fraud - Jackson Hewitt 2007-04-05 09:55:01 http://www.executivefraud.com/Fraud_Blog.php/2007/04/05/tax_fraud_jackson_hewittIgnorance is NOT an Excuse for Tax Fraud
JacksonHewitt
is currently under investigation for maintaining a business environment that is conducive to filers committing tax fraud by using fake W-2 forms or taking false deductions. Allegedly employees of the franchise were told to overlook clear signs of fraud for the sake of filing more returns. As the Justice Department has begun sampling the returns filed they have found approximately 31% of Farrukh Sohail's franchises have contained fraudulent information.
A major area of most tax fraud emerges from the over use of the Earned Income Tax Credit that is designed to give large refunds to lower income tax payers. This is a large profit business area for companies such as Jackson Hewitt therefore there is a motivation to increase their return amounts. These franchises have withheld from the government approximately $70 million in tax revenue for the gove
Certified Fraud Examiners Manual 2007-04-02 08:06:32 http://www.executivefraud.com/Fraud_Blog.php/2007/04/02/certified_fraud_examiners_manual
2006 Fraud Examiners Manual by the ACFE
Section I: Financial Transactions and Fraud Schemes – Learn about the vast landscape of fraud in business and government including the responsibilities of managers and auditors in fraud detection, as well as the schemes used to commit most business fraud.
Section II: Law – This section serves as a ready, permanent reference for the courtroom with relevant statutes and common law principles involved in prosecuting a defendant in both the criminal and civil systems. It also includes a complete set of US Federal Rules of Civil and Criminal Procedure and the US Federal Rules of Evidence.
Section III: Investigation – Possess the tools and techniques necessary to gather evidence and information when conducting a fraud examination. This section also contains samples of useful forms, such as report forms, fraud examination checklists, and enga Read more:Certified
Credit Card Fraud - Banks Can't Identify Your Thief! 2007-04-02 07:30:11 http://www.executivefraud.com/Fraud_Blog.php/2007/04/02/credit_card_fraud_banks_can_t_identify_yBanks around the country have been faced with larger instances of credit card fraud while victims are often times left to foot the bill. On the chance that you are protected under your coverage it is often the case that banks are unable to reveal the source of the fraud. Their response is often that they must remain silent because there is currently a police investigation of that particular location/person. It seems to reason though if card holders where told where they were being defrauded from they would consider avoiding credit card use while in those areas. There seems to be a disconnect between stopping the credit card fraud and providing consumers with enough information to properly handle fraud prevention. Read more:Thief
, Credit Card
Sarbanes Oxley - Third Prosecution 2007-03-28 22:12:05 http://www.executivefraud.com/Fraud_Blog.php/2007/03/28/sarbanes_oxley_third_prosecutionSteven Garfinkel, CFO of the medical equipment manufacturer DVI Inc., was recently sentenced in the third prosecution to occur under the corporate accountability section of Sarbanes Oxley. This fraud case involved Garfinkel pledging the same assets as collateral for two separate loans. When the company tanked, Fleet Bank was left with a loss of $51 million from DVI.
Since Garfinkel as CFO had signed filed with the SEC that the financial statements were free from fraud and an accurate representation of DVI's financial position under Sarbanes Oxley he was liable for personal liability. Pending appeal he is currently being sentenced to 2 1/2 years in prison and must pay back the $51 million in restitution. Read more:Prosecution
Fraud Services - Federal Government Sources of Information 2007-03-26 21:09:13 http://www.executivefraud.com/Fraud_Blog.php/2007/03/26/fraud_services_federal_government_source1. Department of Defense
•Maintain records on all military personnel whether they are active or not.
•Collect information involving threats to national security.
•Investigators use their records to help search for hidden assets of military personnel by using their previous addresses.
2. Department of Justice
•Enforces the federal and civil laws.
•Maintains the records related to detection, prosecution, and rehabilitation of offenders.
•Includes US Attorneys, US Marshals, DEA, and FBI.
3. Bureau of Prisons
•Includes federal prisons, correctional institutions, and community treatment facilities.
•Information regarding repeat offenders can be important evidence when making a case against a suspect.
4. Internal Revenue Service
•Enforces all internal revenue laws except alcohol, firearms and tabacco.
•IRS records are not open to the public so Read more:Services
, Federal
, Government
Cash Larceny - Fraud Detection and Fraud Prevention 2007-06-14 17:33:17 http://www.executivefraud.com/Fraud_Blog.php/2007/06/14/cash_larceny_fraud_detection_and_fraud_p
Cash larceny is the theft of cash that has already been accounted for in the books. Since there generally is a paper trail it is considered to be one of the easiest frauds to detect and prevent through the use of internal controls. In this section, I'll discuss the different ways fraudsters can steal incoming cash.
1. Stealing Cash from the Register
Register theft is the most common form of cash larceny for the obvious reason that it is an easily accessible point of contact with cash receipts. At the time the cash is stolen from the register there already is a record of the transaction on the register tape. Register theft creates an imbalance between the cash in the drawer and the transaction totals on the register tape. In order to detect register theft it is necessary to reconcile both cash balances and track individual cashiers to ensure there are not employees that consistently Read more:Detection
Cash Larceny - Part 2 2007-06-14 02:34:30 http://www.executivefraud.com/Fraud_Blog.php/2007/06/14/cash_larceny_part_2Continued from Cash Larceny Part 1
4. Register Tape Removal
Stealing the register tape or destroying it would allow the employee to cover the amount of money that they were able to steal from the register. A big problem with this method is that there needs to be an explanation of what happened to the register tape when it turns up missing and it would be rather obvious if it were to happen repeatedly. In order to prevent this from happening companies could install surveillance cameras that are pointed to all the cash registers therefore creating a record to go back to verify what happened to the register tape.
5. Cash Count Alteration
During the reconciliation process it is important that the cash count is correct or there would not be a means of comparison for the register tape. In order to ensure that there is not the opportunity to manipulate the count it is important to segregate duties where the cashi
Mortgage Fraud - American Home Mortgage 2007-09-21 05:37:05 http://www.newsday.com/business/ny-bzdefer0918,0,5702591.story?coll=ny-nycnews-headlinesAs the failing bank, American
Home Mortgage
, recently fired over 7,000 employees for cost savings related to their subprime investments, they've now decided to freeze the funds in employees deferred compensation plans. Bankruptcy court is to decide whether American Home Mortgage is able to release nearly $27 million of employees contributions to make them accessible to other creditors. This is a dangerous precedent if they find that employees funds are open to creditors. When other banks fail, the issue will be whether banks with commingled funds (investments + customer deposits all in same accounts) have open all their assets to creditors. In the end, customers could be treated as a regular unsecured creditor behind large institutional banks. Read more:Mortgage Fraud
Mortgage Fraud - Clarification of the Subprime Crisis and the Credit Crunch 2007-09-07 23:55:27 Subprime Crisis
To start off, I think its important to clarify the vague over simplifications you hear in the news describing the "Subprime Crisis" or the "Credit Crunch
." The story begins with commission hungry brokers and ends with consumers struggling to keep their homes as their adjustable rate mortgages (ARMs) begin to reset after their teaser rate period expires. After a quick look at the players in the lending industry it becomes clear what happened to the Subprime market.
Subprime Market
Subprime lending is typically for borrowers that have lower credit scores and do not qualify for prime rates. Understandably, the bank requires a higher interest payment for taking on a higher risk of default. Now as a borrower, if you wanted a loan you would seek out a broker that works with the loan originator (local bank branch) to close your loan. Keep in mind that most brokers are paid on commission for loans that they close. The approval and submission of loans that may not be credi Read more:Mortgage
, Mortgage Fraud
, Clarification
, Subprime
Fraud Prevention Techniques for Credit Card Fraud 2007-10-30 21:18:53
Fraud Prevention Techniques for Credit Card
Fraud by David A. Montague
Effective credit card fraud prevention programs can increase sales revenue while decreasing administration costs and fraud losses. Learn the techniques and strategies to feel secure about accepting credit cards.
Credit Card Fraud - US man sentenced to 13 years in prison, must repay $12M in credit card scam 2007-10-30 21:11:06 http://www.iht.com/articles/ap/2007/10/30/business/NA-FIN-US-Telemarketing-Scam-Sentence.php"Authorities say Porcelli defrauded or tried to dupe at least 165,000 Americans, many with poor credit histories."
Looks like this guy was busy, amazing that he was able to scam that many people without getting caught much sooner. Credit card fraud monitoring is crucial to minimizing losses to victims. It can be as simple as monitoring your balance online in order to identify fraudulent charges proactively.
Iraq Fraud 2007-10-28 16:43:22 http://news.yahoo.com/s/ap/20071026/ap_on_go_ca_st_pe/us_iraq_contract_fraud;_ylt=A0WTUeHJZyJHFu4AaxSs0NUE?loc=interstitialskipArmy investigators will look for fraud in the awarding of the roughly 6,000 Iraq
war contracts worth $2.8 billion.
Many of these investigations will continue long after the war, but I'm still waiting for the investigation of where the pallets of cash went in the early days of the US occupation. I'm sure it is difficult now to divert resources from proactive solutions to iraq fraud investigations.
Mortgage Fraud - Subprime vs FHA loans 2007-10-31 22:49:34 http://online.wsj.com/article/SB119241016826258768.html?mod=googlenews_wsj"FHA-backed loans are being touted for their "safety" -- to consumers and the financial system. "If we can get people into the FHA rather than to some of the other kinds of loans they have, everybody will be better off," argued Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, during a hearing this year.
But before the FHA's loan spigots are opened up, a little due diligence by the political sector is in order. The FHA's recent credit history shows it is far from the prudent institution it is said to be. By its own estimate, next year the agency expects to be in the red, paying out more for defaulted loans than borrowers pay to it in insurance premiums. "Because of adverse loan performance," the FHA states in its budget submission for 2008, "total costs exceed receipts on a present value basis, and therefore would require appropriations . . . to continue operation."
The agency Read more:Mortgage
, Subprime
, Mortgage Fraud
Credit Card Fraud Prevention - Open Source Software by Risk IDS 2007-11-08 20:44:16 I recently came up with an idea to change the focus of this site to be an open source fraud software development project and it got me looking around at what is already out there. Risk IDS provides fraud prevention software specifically related to credit card fraud and other banking related transactions.
"Risk IDS is for prevention of fraud within, although not limited to, credit card companies, retail banks and financial service organizations. The system is unique as it binds together all of the duplication that exists within the management of all fraud types. The interaction is via a workflow system, which reduces the need for training of bank staff and increases audit. It can integrate with other systems thus reducing duplication further. Analysts write their own rules and workflows using a GUI. The system is multi language for many sites whilestoring information in a central database for all customer products." Read more:Source
, Software
, Credit Card
, Open Source Software
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