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Who’s Committing Fraud?

Nov 26, 2013adminNo Comments »

white-collar-crime

According to the Association of Certified Fraud Examiners (ACFE), U.S. organizations lose up to
seven percent of their annual revenues to fraud. And the most likely profile of a financial fraud
perpetrator is a male aged 41-50 who works in an accounting department, according to a report
prepared by AFCE. In most cases, offenders are a trusted part of a team who take advantage of
their situation to get their hands on company assets. For a fuller account, click here. Or see the
short version below.

Men v. women
According to the report, males are more than twice as likely to commit fraud as their female
colleagues. Significantly, the median loss of fraud by men is more than twice as great as frauds
perpetrated by women, according to the study.

Middle age v. millenials
The highest percentage of fraudsters in the study were between the ages of 41-50 (in more than
half of all cases, the perpetrator was over 40). Generally speaking, older professionals often
occupy positions with authority and more access to company resources. Median losses from
fraud rose as the age of the fraudster increased.

Solo v. team effort
In nearly two-thirds of the fraud schemes covered by the study, the perpetrator acted alone.
Yet when the scheme did involve collusion of two or more parties, the results were much more
costly. Cases of collusion resulted in a median loss over four times higher than the amount lost
to fraudsters acting alone.

Education and position
Most perpetrators have attended or graduated from college. About 11 percent have obtained
a post-graduate degree. In general, the higher the education level, the more costly the fraud.
Furthermore, the highest percentage of fraudsters worked in the accounting department when
they executed their scheme. Executives and upper management made up the second-most
common category of fraudsters. The least common perpetrators? Internal auditors.

Living the fraud life
Several behaviors are red flags for fraud. The two most common traits are a tendency to live
beyond one’s means, and a struggle with financial difficulties. Other red flags might include
irritability or defensiveness, addiction problems, past legal problems, and complaining about inadequate pay.

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