Fraud is, simply put, an abuse of power, false representation, or manipulating someone else’s rights for personal gain. It can also be understood plainly as deception.
Generally, fraud is an instance where someone knowingly withholds information or when someone deliberately deceives someone else for monetary gains.
Types of Fraud:
There are different types of fraud that people commit, some on small scales and others on a larger more damaging scale. Some involve small thefts in the office, but others end up costing the company millions of dollars worth of property, assets and financial loss.
Corporate Fraud is perhaps one of the most common types of fraud. This involves deliberate misinformation given out to the public, investors or leading companies, whereby ending in financial gain for the criminal involved.
Asset Stripping is another form of fraud where the criminal takes a company’s assets and leaves them in debt. Companies normally move only assets from one company to another and leave behind liabilities. The result is that the company ends up with only liabilities and debt.
Another example is fraudulent trading, where a company carries business with the intention of defrauding creditors or clients. This is possible even if the company has shut down. Similarly, book ramping is when criminals manipulate the share value of a company then profit from it. This is commonly achieved when by bringing a company false hopes about the profits made in a market.
Publishing false information is when an individual gives out false information about accounts. This misleads the company about the profit and money they are making. This is done to keep investors interesting in running a failing company.
There are many was to catch fraud happening in the work place. Standing alone, these can be nothing, but once they start appearing together, these signs can tell if someone is committing fraud in a company.
Red Flags to look out for:
Significant changes in behavior, large personal debts, errors in audit, discrepancies in accounting, vague responses to inquiries and other things like a single employee being in charge of a control process from start to finish.
When these red-flags show up, a fraud investigator is often hired to find out who is responsible for the fraud.
What is Fraud Investigation?
A fraud investigation is the practice of trying to find out if a fraud was conducted or not. If it is, then an investigator is called to pin point the source and arrest the one responsible.
Most fraud investigators will meet up with the client and they explain why they think a fraud is being conducted in their workplace. The methods used can involve surveillance, bugging the electronic devices of the person suspected, listening in on their calls, finding hidden data in their computers or even following the suspect.
Most investigations involve ‘white collar’ crimes. This involves strict surveillance and examination of complicated company records. The fraud investigation depends entirely on the nature of the crime itself, hence it must be altered to what is required. In case of a crime, consult a professional.