Help your employees spot fraud

It is important for every employee in every organisation to learn the telltale signs of fraud.

“Getting unsuspecting employees to carry out illegal tasks as part of their daily routine is the aim and hallmark of truly successful fraud networks” says Gerhard Labuschagne, Forensic Auditor, Alexander Forbes Financial Services (Pty) Ltd.

As such, employers should be constantly on the lookout for the signs of fraud. Moreover, they should encourage and train their employees to be equally vigilant within a culture where people feel free and safe to report suspicious activity – or anything that does not make sense.

Beyond the normal background checks that companies run on prospective employees, like ID, credit and criminal record checks, there is not much more that the average organisation can do to prevent fraud syndicates accessing their organisations. And since “professional fraudsters can, and regularly do, cook their own biographical details and official records” adds Labuschagne, the best defense remains getting employees onside in the fight against fraud.

This requires an open door policy that encourages and publicly rewards the reporting of fraud, or even just strange, illogical or out of the ordinary behaviour or occurrences.

Telltale signs to watch out for include:

· equipment or funds going missing without a trace

· the ‘same persons’ handwriting constantly changing

· the same name spelt differently

· invoice numbers and dates out of sequence

· exact copies of a legitimate signature cut and pasted on several pages

· ID numbers that don’t match ages or birth dates

· calls from legitimate clients questioning suspicious transactions and payments that they are not aware of

· expensive vehicles or ostentatious lifestyles of average-earning employees

Identifying fraud is however, only the first step. Thereafter it is important that organisations seek professional help in prosecuting professional fraudsters. After all, even the best prepared, most honest and most vigilant organisational culture cannot guarantee a successful prosecution.

“Fraud networks are very familiar with the legal prosecution system, and are expert in securing lesser sentences, plea bargaining or manipulating the CCMA process to keep fraudsters in their jobs as long as possible” warns Labuschagne.

As such, good fraud consultants need both experience and a wide network of skills and contacts - across all sectors of the economy as well as in Home Affairs and other government departments, including the police. Fraud consultants should also be familiar with the law and the CCMA process including the latest legislation.

Identifying, catching, successfully prosecuting and then removing fraudsters from a business is often a long, costly and skills-intensive process. Proven integrity is equally as important. Professional fraud networks, often in command of vast resources, “routinely pay-off investigators to avoid prosecution” warns Labuschagne who for many years was an inspector with the Serious Fraud and Robbery Squad.

And it’s not the size of the team that counts. Often one man with the right skills and contacts can be very effective, and far less disruptive, in bringing down extensive fraud networks. In fact, “introducing a single almost invisible professional investigator is preferable to tying an organisation up in complex fraud checks and red tape that only prevent it performing its core business” concludes Labuschagne.