The Demographics Of Corporate Fraud

Corporate fraud has its demographic hallmarks, sorted, if you look closely, by age, position and even gender.

According to research from expense and invoice automation firm Chrome River, some correlations exist across attributes as varied as age and job level. The company found in a survey that spanned more than 1,200 business travelers in the U.S., Australia and the United Kingdom that expense fraud has significant financial impact, costing firms in the U.S. alone as much as $1.9 billion annually.

Chrome River also cited findings from the Association of Certified Fraud Examiners (ACFE) that expense reimbursement fraud makes up as much as 17 percent of business fraud in general. The burden particularly affects smaller firms, as those outfits typically have fewer internal controls.

Chrome River said the data shows that expense fraud has some definable traits. Consider the fact that findings indicate that roughly 83 percent of expense fraud was committed by employees under the age of 44. Males were more likely to commit expense fraud, padding reports by $1,000. They were also more predisposed to believing they would not get caught – according to Chrome River, males are more than 62 percent more likely to believe their activities centered on falsifying expenses would go unnoticed.

Perhaps it’s no surprise, but those firms reliant on manual processes were twice as likely to commit fraud than those firms deploying automated expense management solutions.

Separately, in Pennsylvania, state senators have introduced a bill that focuses on restitution in cases where defendants have been convicted of stealing from local governments, non-profits or enterprises. The bill comes in the wake of rulings via state courts that those enterprises are not afforded victim status. The bill would help amend state laws to grant such status to those organizations. The bill was passed with unanimous consent in the state Senate and now goes to the state House.

On the international stage, CIO reported that email fraud remains top of mind. IT professionals state that 82 percent of corporate boards are concerned about this type of fraud. The survey via Proofpoint stretched across 2,250 IT professionals; half of those queried said that email fraud is a high security risk.

In notable country by country findings, 80 percent of Australian organizations said they had experienced “at least one” targeted email fraud attack. Roughly a third of those attacks led to financial losses at the corporate level.

In news surrounding isolated incidents, in Iowa, a woman was charged with theft tied to $65,000 taken from non-profit children’s aid organization Children’s Square USA.  The woman had been fired last year after allegedly forging an employee’s name to documents.

And elsewhere, an ex-employee of Walmart has admitted, via a guilty plea, to stealing data from the retailing giant and giving that same data to a subsequent employer. In this case, John Stan Harmon – a Walmart vendor – pleaded guilty to a single count of trade theft in North Carolina, with a focus on pricing information tied to Walmart’s furniture department. The company said there had not been financial impact tied to the data theft.

The company did say that the data that had been transferred to that vendor was “highly valuable” to vendors and competitors. The accused also told investigators that he knew the data taken and shared from Walmart and given to the vendor, Outdoor Leisure Products, was proprietary in nature.