Creepers are a Threat to Your Business

If you devote all your business’s security resources to fending off hackers and other cybercriminals, you may be unlocking the door, literally, to more basic types of theft. “Creepers” are criminals who gain access to offices or other physical facilities via unlocked doors and social engineering tactics. Once in, they steal proprietary information, inventory, computers and personal property, or gather information that makes it easier to hack your network.  As such, creepers are a threat to your business. Creepers in action A major energy company’s Houston office was infiltrated by a creeper who’s believed to have stolen sensitive information, possibly to sell to a rival company or foreign government. Surveillance footage released by the FBI shows a man walking through an unlocked door in the middle of...

Protecting Against International Trade Fraud

The U.S. economy depends on import and export markets to run as designed. After all, revenue from trade tariffs and duties contribute $30 billion annually to federal government coffers. Unfortunately, fraud regularly throws a wrench in the works of global trade, and individual businesses suffer. Your company might, for example, lose money if a seller ships substandard goods or it could get fleeced if it turns out that a shipment doesn’t exist.  Be vigilent in protecting against international trade fraud. The problem with letters of credit To facilitate international trade, buyers and sellers often rely on documentary letters of credit (DLCs). For a fee, banks issue DLCs that pay sellers from buyers once the specified terms of the DLC are fulfilled. These documents theoretically shift risk to...

Help Stop Elder Financial Abuse

It’s one of the most difficult types of fraud to unearth. But it doesn’t directly affect businesses or the average consumer — in large part because its victims rarely report it. In fact, they’re often prevented from doing so by perpetrators.  What is it? Financial abuse of seniors, or elder fraud. Many thousands of Americans are victimized each year and some observers fear these crimes are becoming more widespread. But you can help stop elder financial abuse. Learn the signs and, as the saying goes, if you see something, say something. Vulnerable targets Older individuals with retirement savings, accumulated home equity and other significant assets make appealing targets for unscrupulous family members, caregivers, financial advisors, fiduciaries and scam artists who insinuate themselves into their victims’ lives. Seniors could...

Put the Brakes on Lapping Schemes

Lapping is one of the most common ways crooked employees skim money from their employers. In these schemes, a perpetrator uses receipts from one account to cover theft from another. Here’s what it looks like and how you can put the brakes on lapping schemes. Starting small Lapping scams usually start small, with an employee pocketing a payment from ABC company and using a payment from XYZ company to hide the loss. As time goes on, however, the amounts get larger and the employee is forced to maintain detailed records to track the movement of money. This house of cards usually tumbles when the employee makes an error. One commonly cited example is the man who stole $150,000 by programming an elaborate computer scam based on 29-day cycles....

Using Benfords Law to Find Fraud

Benford’s Law is a long-standing statistical precept that remains as relevant and widely accepted in fighting fraud as ever. By using Benford's Law to find fraud, experts can cut down fraudsters who unknowingly reveal their wrongdoings in dubious digits. Historical background The rule is named for Frank Benford, a physicist who noted that, in sets of random data, multidigit numbers beginning with 1, 2 or 3 are more likely to occur than those starting with 4 through 9. Studies have determined that numbers beginning with 1 will occur about 30% of the time, and numbers beginning with 2 will appear about 18% of the time. Those beginning with 9 will occur less than 5% of the time. Further, these probabilities have been described as both “scale invariant” and...

Encourage Your Sales Staff to Walk an Ethical Line

When market competition heats up, you might provide extra incentives for your sales staff to perform. But be careful: Some employees may step over the line — to earn bigger bonuses or out of enthusiasm for the challenge — and use unethical sales tactics. Take steps to ensure your salespeople always walk an ethical line and operate with integrity. Walk an ethical line: make a commitment to honesty Culture starts at the top. If you clearly demonstrate, through both words and behavior, your commitment to honesty, your sales team will get the message. Your customers will too. Try to anticipate the challenges your sales force may face as they attempt to meet sales goals. The temptation to sell more than your company can deliver, for example — or...

Typosquatters profit from common user errors

The Web has opened plenty of new avenues for criminal behavior. For example, you may have heard of cybersquatting. Someone registers a site’s domain name that includes a trademark and then tries to profit by selling that name to the trademark owner.  But are you familiar with typosquatting? You should be because typosquatters profit from common user errors.  These schemes can make just about any organization, along with visitors to its website, the victims of fraud. Fat fingers Like cybersquatting, typosquatting (also known as URL hijacking) involves the purchase of domain names in bad faith. It takes advantage of an inclination among users known as “fat fingers” — basically, our tendency to hit the wrong keys and enter misspelled trademarks or brands. For example, in a case involving...

Why Affinity Fraud is Particularly Heinous

Affinity fraud is particularly heinous.  Perpetrators exploiting connections of race, religion, age, politics and profession is one of the cruelest forms of criminal deception. Fraudsters often belong to the groups they target and, in addition to stealing money, weaken the bonds within communities. Affects individuals and businesses Affinity fraud targets individuals. But it can also hurt businesses if a big chunk of their workforce is affected. If your company employs a large percentage of immigrants, for example, they may be susceptible to fraud perpetrated by other immigrants and could, as a result, be left penniless. In addition to the effect such emotional trauma can have on company morale, it could make employees more susceptible to stealing in their own efforts to recoup their losses. Even people who usually...

Get the Goods on Hidden Assets

Hidden assets can be an issue in a variety of contexts — from divorce to bankruptcy to fraud. An acrimonious divorce, ownership dispute or occupational theft incident could all lead an individual or business to wrongfully hide items of value. In such cases, fraud experts use a variety of tools to uncover the assets — and the truth.  Here's how to get the goods on hidden assets. Net worth analysis Experts often start their searches with a net worth analysis that looks at changes in a person’s worth, reconciling those changes with income and expenses. The first step is to reconstruct this data, which may involve some detective work. Experts search for clues in a variety of places, including: Bank records, Real estate and court filings, Payroll...

Real Estate Money Laudering Schemes

Money laundering is the process by which criminals transform their ill-gotten gains into legitimate-looking funds. It’s widespread and wide-reaching, making it a significant corrupting influence on financial systems, governments and certain professionals. Criminals use many different types of businesses to “wash” their dirty money, but some are more useful than others. Real estate money laundering is a favorite industry, given its high dollar value and availability of inventory. Money Laundering: 3 steps The typical money laundering scheme involves three phases: Placement: Here the proceeds of criminal activity enter the financial system. Layering: This is where the money launderer conducts a series of transactions to distance the money from its criminal source. Integration: Finally, the criminal uses the money, which now appears legitimate and divorced of any crime. Executing money laundering operations effectively is critical if...