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Internal Fraud is Preventable: The Author’s Viewpoint

After spending four decades investigating and analyzing business crimes, I have learned a great deal about internal fraud. One fact that has consistently surfaced in my personal experiences and case examinations is that the overwhelming majority of those internal fraud schemes were easily preventable.

Yes, preventable . . . that is, had managers within those victimized organizations possessed a basic understanding of how internal fraud can occur, had foresight to have implemented, and practiced a few basic internal fraud prevention strategies. The majority of these cases are not complex and with a little knowledge and common sense, you too can easily prevent internal fraud.

As for the “profile” of a fraudster, do not be fooled by appearances. Those who commit internal fraud are most likely college graduates, may live in fine homes and have delightful families. They are generally dedicated workers, rarely complain about workloads and thrive on additional responsibilities. Management generally views these people as dependable, respectable and loyal—trustworthy beyond doubt. To company owners, such a work ethic is appreciated and rightfully so, that is, if the individual is honest. However, if this employee is dishonest, the first step in the process of Betrayal is in place.

Incidents of internal fraud and embezzlement are happening in every business imaginable. While the costs associated with these crimes are impossible to measure, many experts believe internal fraud and embezzlement losses have climbed well beyond $500 billion. Equally troublesome is the fact that actual case histories show that the majority of internal fraud cases are brought to light by a “tipster” or discovered strictly by accident—not through the alertness of management or others.

Internal fraud and embezzlement crimes are preventable. Learn how to protect your assets by ordering your copy of Business Fraud: From Trust to Betrayal today!