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Corporate fraud could be defined as a loss to a corporation due to deceitful management. These schemes are often marked by their complexity and economic impact. It is rarely large amounts of money that are stolen at once, but rather over long periods of time little by little. Usually it takes as long as 18 months for fraud to be discovered. In the case that an executive commits fraud, the losses can average over a million dollars. Although eliminating fraud 100% would require far too many resources and would not be worth the expenditure, a high level of corporate fraud protection is well worth the cost.
Fraud investigators can be of service to help you minimize the unplanned costs of employee theft, vendor fraud, and legal disputes. Employees may steal products, inventory, material, customers, and intellectual property. Unscrupulous vendors can also overbill, underdeliver, and authorize kickbacks and other forms of theft. Even your competitors can steal from you by misusing your trademarks and patents.
Fraud investigations by third-party companies specialized in the field offer a lot of value to corporations, such as obtaining written admissions, avoiding costly lawsuits, getting employees to quit voluntarily, and gaining restitution. Fraud security stop gaps are also put in place to prevent employees from being able to commit such actions in the future in the first place.
There is a number of formats in which fraud investigations are conducted. In an undercover operation, the investigator can keep an eye out for misconduct, theft, odd behavior, etc. They can also perform research in order to dig up information on companies your business is involved with in regards to acquisitions, mergers, investments and other operations. Fraud protection investigators also look through a company’s financials to discover embezzlement, money laundering, and other white-collar crimes. Electronic information can also be sifted through to obtain the necessary evidence in addition to restoration of lost data. A corporate fraud investigation by such an outfit can also reveal bribery, illegal foreign exchange, and industrial espionage.
Many employees that commit fraud do not consider themselves to be stealing. Some of them have even convinced themselves that they will pay it back later. It is a good strategy to often discover the truth is not being overly confrontational in the fraud investigation; otherwise, employees may not be as forthcoming with information. Unlike in a typical crime situation, police do not come by to investigate. Instead, it is other professionals. However, an investigation may very often lead to evidence or the perpetrator admitting what he or she did. At the very least, the investigation should make it clear what happened and who was involved. Be sure not to perform the investigation the wrong way, or you may end up with a harassment case as well. The best way to handle the case might be a combination of both formal and informal action, involving options such as identifying a training need, a change in policy, or taking disciplinary action.
