With over 25 years of experience, we have investigated a variety of internal and external fraud cases in multiple business settings. Some incidents involve relatively “simple” acts of dishonesty such as overstating hours worked, theft/pilferage of company property or falsifying expense reports. Other schemes have been more complicated involving kick-backs, creating ‘ghost’ employees, paying fictitious vendors or manipulating financial records.
Case Sampling
Cash Handling
Medical Insurance Billing Fraud
Fraudulent Payments for Tuition Reimbursement
Employee Travel and Expense Reimbursement
Inventory Theft
Accounts Payable … Vendor Over-Billing
Employee Travel and Expense Reimbursement
Overview: While conducting a routine audit T&E expenses, it was discovered that a highly-paid company executive had, over a period of multiple years, defrauded his employer of more than $100,000.
Outcome: Employee admitted knowingly overstating both travel as well as relocation expenses resulting in termination and full reimbursement of overstated expenses. Enhanced internal controls were implemented within expense reimbursement of employee T& E as well as relocation program.
Inventory Theft
Overview: Following an investigation to identify the origin of high-dollar lossses related to missing inventory, employee meetings were conducted to build awareness among those employees working at the location.
Outcome: Criminal prosecution and full court-ordered restitution in excess of $20,000.
Accounts Payable … Vendor Over-billing
Overview: While conducting a routine accounts payable audit, an AP Processor with a sharp-eye for details noted a steep increases in payments to a long term, established vendor.
Outcome: Vendor admitted to a billing fraud scheme and agreed to repay over $30,000. AP internal controls were modified, employees were re-trained and the AP Processor was recognized for reporting his observation.
- Note - Concerns regarding possible vendor bankruptcy influenced decision to forgo prosecution. After full reimbursement, the company severed the vendor relationship.
Fraudulent Payments for Tuition Reimbursement
Overview: Employee falsified documents related to company sponsored tuition reimbursement program.
Outcome: The employee admitted submitting altered grade report documentation to falsely qualify for the employer sponsored tuition reimbursement program. She was terminated and agreed to repay the company for the false tuition reimbursement claims.
Cash Handling
Overview: A pattern of late deposits and cash variances were noted during routine reviews of bank activity at a district office. The office supervisor was a long-term employee with over 10 years of tenure at the organization.
Outcome: The office supervisor acknowledged that, faced with foreclosure, he was forced to misappropriate company cash receipts. In light of his tenure, the owner of the company decided to forgo prosecution, established a repayment plan and continued to employ the office supervisor.
Medical Insurance Billing Fraud
Overview: As part of due diligence regarding the acquisition of a medical practice, a pattern of insurance over billing was discovered.
Outcome: Reported finding to in-house counsel and decision made by executive management to abandon the acquisition.
***To maintain confidentiality, specifics such as dates along with organizational identifying and case specific details have been omitted or modified.