16 Feb 2025
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BEC Fraud: How to Protect Your Business from a Growing Threat

Roger Rossmeisl, CPA
Fraud Briefs
BEC Fraud: How to Protect Your Business from a Growing Threat

Business e-mail compromise (BEC) has emerged as one of the most financially damaging online crimes. According to the FBI’s Internet Crime Complaint Center (IC3), organizations lost nearly $56 billion across approximately 305,000 incidents between October 2013 and December 2023. Increasingly, gift cards are playing a key role in BEC scams. Understanding how these schemes work can help prevent them from harming your business. Role of gift cards To steal from companies, BEC perpetrators use social engineering and computer intrusion techniques. Their goal is to trick email users into transferring funds to them. Although several BEC variations are active, cybercriminals usually impersonate senior executives and target lower-level employees by asking workers to fulfill what might seem like routine requests. These include sending money via wire or writing a check. In...

29 Dec 2024
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Know the Risks Before Outsourcing Business to Contractors

Roger Rossmeisl, CPA
Fraud Briefs
Know the Risks Before Outsourcing Business to Contractors

If your business is particularly busy, you may temporarily outsource some of its work to third-party contractors. Hiring contractors can be a cost-effective way to manage seasonal — or even ordinary — customer demands without hiring new employees or making other long-term investments. However, third parties can introduce some financial, legal and reputational risks. So it’s important to recognize potential threats and take steps to head them off before engaging contractors. 2 scenarios Consider the following example: A company employs an overseas trucking company to transport goods from a port to a customer’s warehouse. The driver, unfortunately, isn’t very honest and he pays a kickback to customs personnel to release the shipments quickly. This action subjects the company that hired the contractor to bribery and corruption charges...

28 Dec 2024
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Are Your Job Candidates Honest? A Look at Resumé Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Are Your Job Candidates Honest? A Look at Resumé Fruad

Job applicants must work hard to stand out in a crowded marketplace. For some, that means bending the truth — or outright lying — about their experience, skills and education. According to a survey performed by resumé-writing service StandOut CV, a staggering 64.2% of Americans have lied on their resumé at least once. Bad hires can generate direct and indirect costs, including lost productivity, customer dissatisfaction and wasted training time. In extreme circumstances, news of a bad hire can result in reputational damage. To make matters worse, if a dishonest new hire objects to being fired (or a candidate doesn’t get the job), the person could sue, leading to expensive legal bills. You can help protect against such losses by spotting dishonest resumés early in the...

15 Dec 2024
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Help Protect Your Employees’ 401(k) Plan Savings from Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Help Protect Your Employees' 401(k) Plan Savings from Fraud

Recently, a 401(k) plan participant was defrauded of approximately $740,000 when he fell victim to an elaborate scheme perpetrated by overseas criminals. However, even friends, family members and employers have been discovered stealing from 401(k) accounts, adding up to millions of dollars in losses every year. Here’s what your organization can do to help keep your employees’ retirement savings safe from theft. Assessing existing protections If your organization sponsors a 401(k) plan, assessing plan service providers’ protection systems and policies is essential. Most providers carry cyber fraud insurance that they extend to plan participants. But there may be limits to this protection if, for example, the provider determines that you (the sponsor) or employees (participants) opened the door to a security breach. Your plan’s documents may say that...

27 Oct 2024
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How Your Business Can Fight ATM Skimming

Roger Rossmeisl, CPA
Fraud Briefs
How Your Business Can Fight ATM Skimming

Skimming, where criminals use hidden digital readers to steal debit and credit card information, is a pervasive threat that can result in significant financial losses for businesses. The FBI estimates that ATM and point-of-sale (POS) skimming generates more than $1 billion for criminals annually. So if your business offers or operates these machines, you need to assess your risk and take steps to prevent skimming from happening on your premises. How it happens Skimming is widespread among thieves because it’s a relatively straightforward crime to perpetrate. Fraudsters secretly place a skimming device — usually a plastic overlay — on an ATM or POS reader to capture card data and users’ PINs. Alternatively, they might use hidden cameras focused on the keypad or even a “dummy” keypad. They then...

13 Oct 2024
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Why Your Business Needs to Protect Against Executive Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Why Your Business Needs to Protect Against Executive Fraud

You may trust your executive management team implicitly. But the research is clear: In organizations where executives turn to fraud, the results are very costly. According to the Association of Certified Fraud Examiners’ (ACFE’s) Occupational Fraud 2024: A Report to the Nations, owner/executive fraud makes up only 19% of all cases but has a median loss of $459,000 per incident. That compares with $60,000 per incident for non-managerial employees. Part of the reason behind such great financial losses is the fact that it generally takes longer to detect fraud perpetrated by executives (24 months vs. eight months for rank-and-file worker schemes). So the more proactive you are about preventing and detecting occupational fraud at the highest levels, the better. 3 factors You might start by considering how the...

29 Sep 2024
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How Cybersecurity and Physical Security Go Hand in Hand

Roger Rossmeisl, CPA
Fraud Briefs
How Cybersecurity and Physical Security Go Hand in Hand

Protecting your small business from theft is far more complex than it used to be. Gone are the days when locking the doors was enough to minimize the likelihood of intruders. Today, companies face both physical and cyber risks, and it’s critical to understand how they’re intertwined. The problem with things Imagine that a thief breaks into one of your employee’s cars and steals a company laptop that contains your entire customer database. Here, physical theft can grant access to digital assets. Among the possibilities are that the crook: Is working for a competitor who’s looking for an unfair advantage, Will use the customer information to commit identity theft, or Might share the data with other criminals on the dark web. Or consider the risks involved with the...

09 Sep 2024
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Fraud Disasters Require a Contingency Plan Too

Roger Rossmeisl, CPA
Fraud Briefs
Fraud Disasters Require a Contingency Plan Too

Your business probably has a disaster plan — or a set of procedures for dealing with a fire, natural disaster, terrorist attack or other emergency that could disrupt operations and threaten lives. Although a fraud contingency plan probably isn’t as critical, it’s still important for most companies to have one. Here’s how to draft and put a fraud contingency plan in place. Where are your weaknesses? Start by meeting with your senior management team and financial advisors to devise as many fraud scenarios as you can dream up. Consider how your internal controls could be breached — whether the perpetrator is a relatively new hire, an experienced department manager, a high-ranking executive or an outside party. Next, decide which scenarios are most likely to occur given such factors...

09 Sep 2024
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What You Can Do About Workers’ Comp Fraud

Roger Rossmeisl, CPA
Fraud Briefs
What You Can Do About Workers' Comp Fraud

Workers’ compensation insurance can provide medical care and financial assistance to employees who are injured or incapacitated at work. However, this important benefit is also subject to fraud perpetrated by dishonest workers. The Coalition Against Insurance Fraud says that 16% of workers’ comp claims are fraudulent, adding up to $9 billion in annual losses. Such losses hurt businesses, insurers and states. But you can help reduce the possibility that a scheme will be perpetrated in your organization. Common employee and employer schemes Employees violate workers’ comp rules if they file claims for injuries they didn’t experience or injuries or illnesses they did experience, but not at work. Workers’ comp fraudsters also might exaggerate the severity of their injuries or illnesses, or falsely state that they can’t work in...

09 Sep 2024
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Office Supply Fraud is Sneaky, But Preventable

Roger Rossmeisl, CPA
Fraud Briefs
Office Supply Fraud is Sneaky, But Preventable

Office supply scams are a tricky type of vendor fraud that generally use behavioral psychology and often depend on poor intraoffice communications for their “success.” Although they may not result in huge financial losses for defrauded companies, falsified invoices can add up to many thousands of dollars. Fortunately, you can help prevent them. How scams are perpetrated Office supply schemes typically begin as telemarketing fraud, with someone calling your business to obtain your street address and the name of an employee. Callers may: Ask for the “person in charge,” Claim to need information to complete an order, or Pretend to verify an office machine’s serial number. The goal is to get a name that will lend legitimacy to bogus shipments and invoices. For example, a supplier might ship...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

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