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A Closer Look at Corporate Fraud: Part 1 (An Introduction)

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I am Craig Hannaford and welcome to my new blog series for Haywood Hunt & Associates, which takes a closer look at fraud in the workplace. I have been a Senior Investigator at Haywood Hunt since March 2019 focusing on commercial fraud, civil litigation support, investigative accounting, asset searches and miscellaneous problem solving.

I am the former head of the RCMP Commercial Crime Section and of the RCMP?s Stock Market Fraud Section. I am also a Licensed Private Investigator, a CPA (Chartered Professional Accountant) and a CFE (Certified Fraud Examiner). I have my Master of Science in Economic Crime Management and a Bachelor?s degree in Computer Science.

An Introduction to Corporate Fraud

Frauds targeting businesses and organizations are rampant. The reliance on electronic transactions, e-transfers, electronic communications and other modern day business systems eases the processing of corporate transactions, however, these same systems can be quite vulnerable to manipulation by professional fraudsters.  Your organization has to take steps to thwart these online criminals.  Just as having a fire alarm or burglar alarm, organizations must evaluate their fraud risks and take steps to mitigate these risks.

In a recent case investigated by Haywood Hunt, fraudsters were able to manipulate the accounts payable system of a large organization and succeeded in having over $500,000 transferred to a criminal?s bank account.  During this investigation, it was learned that other organizations were similarly targeted. This is just one of many examples where fraudsters have been highly successful in plying their trade even in sophisticated organizations.

According to the Association of Certified Examines, the money lost to fraud is estimated at 3.5 trillion dollars each year.  And that estimate does not include the reputational and other damages inflicted on an organization.

This series of blogs will explore some of the common fraud risks organizations face and offer some ideas on how to mitigate those threats.  In our experience, fraud prevention and risk mitigation are key.  Once funds have been grabbed by a fraudster, it can be very difficult (if not impossible) to recoup those losses.

Fraudsters are a brilliant lot. They have dreamed up so many different scams that it would require a lengthy dissertation to explore them all.  However, the below lists some of the most common scams targeting businesses:

  • Insurance fraud
  • Phishing scams
  • Office supply frauds
  • Bank account takeovers
  • Account takeover fraud
  • False invoices
  • Delinquent utilities
  • Sale of business fraud

Future Haywood Hunt blogs will highlight each one of these frauds, show how they work and provide some risk mitigation steps.  Remember, knowing how these frauds work, educating employees and taking other steps will help prevent most fraud losses. If your business has been a victim of fraud or you would like to mitigate your risk, we can help. Contact us today for a free consultation.

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