20 Jul 2021
0

IRS Releases It’s “Dirty Dozen” Scam List for 2021

Roger Rossmeisl, CPA
Fraud Briefs
IRS Announces Dirty Dozen Scams for 2021

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes. On 6/28/21 the Internal Revenue Service, via IR 2021-135, began its "Dirty Dozen" list for 2021 with a warning for taxpayers, tax professionals and financial institutions to be on the lookout for these 12 nefarious schemes and scams. This year's "Dirty Dozen" will be separated into four separate categories: Pandemic-related scams like Economic Impact Payment theft (See Blog Post 1049) Personal information cons including phishing, ransomware and phone "vishing" (See Blog Post 1050) Ruses focusing on unsuspecting victims like fake charities and senior/immigrant fraud (See Blog Post 1051) Schemes...

14 Jul 2021
0

Preventing Ransomware Attacks on Manufacturers

Roger Rossmeisl, CPA
Fraud Briefs
Preventing Ransomware Attacks on Manufacturers

The world’s largest meat production company was recently sidelined by a ransomware attack. The hack forced the company to temporarily shutter plants in the United States, Canada and Australia, affecting the U.S. meat supply and even hurting commodity prices. If it seems like cybercriminals often target manufacturing (including food processing) and distribution companies, that’s because they do. According to software company Varonis, manufacturers account for nearly a quarter of all ransomware attacks — more than any other industry. To prevent your company from becoming another statistic, learn about security breaches and protect your network.  A high price It’s only natural that manufacturers fear data breaches — and unfortunately hackers often can use that fear to cripple organizations through ransomware. This type of malware is installed on a computer...

14 Jul 2021
0

Fraudsters Prefer Cash Because It’s Virtually Untraceable

Roger Rossmeisl, CPA
Fraud Briefs
Fraudsters Prefer Cash Because it's Virtually Untraceable

Fraud perpetrators take whatever they can get their hands on. But fraudsters prefer cash because it’s virtually untraceable. Fortunately, fraud experts have the expertise and tools to trace even cash-based theft. Multiple opportunities According to the Association of Certified Fraud Examiners, there are three main categories of cash fraud, which includes checks because they’re easily converted to cash: theft of cash on hand, theft of cash receipts, and fraudulent disbursements. Fraudulent disbursements comprise many of the most frequently executed schemes, such as over-billing and “ghost” employee schemes. Over-billing vendors usually submit inflated invoices by overstating the price per unit or the quantity delivered. A dishonest vendor also might submit a legitimate invoice several times. Over-billing may involve collusion with employees of the victim organization, who typically receive kickbacks for...

22 Jun 2021
0

Defending your Auto Dealership from Fraud

Roger Rossmeisl, CPA
Automotive, Fraud Briefs
Defending your Auto Dealership from Fraud

Although auto sales plunged at the start of the COVID-19 pandemic, they’ve since rebounded. In fact, some dealerships are reporting record sales in 2021. Problems remain — including supply bottlenecks. Also, your dealership may be more vulnerable to fraud. Factors such as employees working from home, new vendors and even booming sales, can put your business at risk. Here’s how to prevent fraud from cutting into profits. Focus on accounting Fraud prevention starts with strong internal controls. For example, good controls generally require a dealership’s accounting department to post transactions daily, including new and used vehicle sales, repair orders, invoice payments, payroll and cash receipts. By 1 p.m. on any given day, you should have access to real-time checkbook balances and other accounting information effective as of 5 p.m. the...

15 Jun 2021
0

Fending Off “Friendly” Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Fending Off Friendly Fraud

Fraudulent behavior isn’t necessarily perpetuated by people hiding their identities. For example, legitimate customers sometimes use the credit card chargeback process to their advantage — and to the disadvantage of merchants. Others routinely abuse chargebacks to steal merchandise. Here’s how to protect your business from these types of “friendly” and sometimes dishonest fraud. Chargeback mechanics Friendly fraud pivots on a customer’s failure to communicate with a merchant. Instead of contacting a seller to discuss a problem with a good or service, some customers immediately dispute a charge with their bank or credit card company. They generally provide plausible reasons for the dispute and don’t mask their identify at any phase of the process. A chargeback takes time and effort to resolve. And if the bank or credit card...

09 Jun 2021
0

Unreliable or Fraudulent Insurance Coverage

Roger Rossmeisl, CPA
Fraud Briefs
Unreliable or Fraudulent Insurance Coverage

Bad faith denials of claims by insurers are illegal, but some dishonest companies or agents attempt them anyway. It’s possible that just when you have the greatest need, you’ll find yourself out in the cold. Unfortunately, there aren’t a lot of great legal remedies. So it’s critical to avoid unreliable and fraudulent insurance coverage in the first place. Legal contract  An insurance policy is a contract. The insured agrees to pay premiums and take reasonable steps to prevent injury or damage, and the insurer agrees to settle legitimate claims according to the policy’s terms. Not only is it good business practice for insurers to cover legitimate claims, but it’s illegal for them to deny them.  There may be times when you and your insurer disagree about what’s covered...

07 Jun 2021
0

Assess Your Supply Chain’s Fraud Risk

Roger Rossmeisl, CPA
Fraud Briefs
Assess Your Supply Chains Fraud Riak

The COVID-19 pandemic has put enormous pressure on global supply chains. As companies struggle to obtain the goods and materials they need, they may not pay as much attention to potential fraud signs. Unethical employees and organized crime gangs have only been too willing to take advantage of the situation. Consider conducting a targeted risk assessment that focuses on the changes that have occurred since the pandemic began. Although a targeted assessment isn’t a substitute for an all-encompassing review, it can help prevent certain threats from resulting in huge financial losses.   Four items for review  As part of your assessment, review: Changes in the operating landscape. As the pandemic took hold, both individual businesses and the larger marketplace changed. Some of those changes were readily apparent, such as...

02 Jun 2021
0

Something’s Wrong in your Office. Is it Fraud?

Roger Rossmeisl, CPA
Fraud Briefs
Somethings Wrong in your Office Is it Fraud

Not all red flags lead to active occupational fraud schemes. But when fraud is occurring, it usually leaves traces — for example, accounting anomalies — for fraud experts and other knowledgeable people to find. Owners and executives, as well as rank-and-file workers, should be familiar with the signs of fraud and know when to call in a forensic accounting specialist. Take a closer look  Dishonest employees may use anything from fictitious vendors to false invoices to cover up theft. To ferret out potential fraud, always investigate duplicate payments, out-of-sequence entries, unusual inventory adjustments and accounts that don’t properly balance. Transactions for amounts that appear too large or too small, or transactions that occur too often or too rarely also merit a closer look. An increase in the number...

27 May 2021
0

Keep Fraud Out of Your Law Firm

Roger Rossmeisl, CPA
Fraud Briefs
Keep Fraud Out of your Law Firm

As counterintuitive as it may seem, law firms aren’t immune to criminal activity. Because some firms place enormous pressure on attorneys to produce billable work, they may be particularly vulnerable to fraud. Your firm needs to know what to look for and how to protect itself from potential schemes perpetrated by partners, associates and support staff. Hold everyone to high standards A firm’s accounting department — payroll and accounts payable and receivable — is where fraud often occurs. But even trusted partners should adhere to your firm’s internal controls and fraud-prevention processes. All prospective employees, regardless of level, need to complete an employment application with written authorization permitting your firm to verify information provided. Then, call references and conduct background checks (or hire a service to do it)....

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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