Imagine, if you will, that you’re a mid-level manager, and you’ve had an eye on Bob for a while. Bob’s always struck you as an easy going family guy, but recently you’ve noticed that his behaviour has become a little strange.
Bob’s clothes are a little more flashy and you noticed a brand new wristwatch catching the light under his shirt sleeve—but it’s not just that. Bob has started staying late more than he used to, and doing things like closing his office door more often, or turning his screen away when you walk by. You debate whether you should talk to the HR director about the issue. Your gut tells you something is wrong, but you wonder what can be done about it—can you really trigger a corporate investigation on the basis of a hunch?
Moments like these can be the beginning of an unravelling that reveals an employee engaged in workplace fraud. But, the signs and signals are often blurry at best. Your imagined mid-level manager’s logic does have some fairly solid foundations—research indicates that 42% of fraudsters do, after all, live beyond their means. But just as easily, another individual engaged in fraud may do a far better job of covering their tracks, while Bob might just have come into a small inheritance.
A Problem Not to Underestimate
What are the risks to contemporary organizations? Employee fraud, forgery, workplace theft, malingering, white collar crime—the list goes on. In fact, it’s estimated that US businesses lose up to $110 million a day due to employee related crimes, while a typical employee theft-scheme lasts 14 months before being detected. The reality is that no business can afford to be asleep at the wheel when it comes to employee fraud.
It’s worth saying, too, that when we say no business, we really mean it. If you’re imagining that your company or organization is simply too small to fall prey to these kinds of problems, think again. The sad reality is that the risk of payroll schemes and billing fraud is actually twice as high in small businesses as it is in large ones.
What Exactly is Employee Fraud?
To any business owner, CEO, CFO, or Human Relations Director who hasn’t felt the viciously stinging impact of fraud before, it sounds like a big word. Surely fraud is something relegated to big-scale scandals that hit the news, right? Well, fraud can happen on any scale, and the perpetrator can be an ordinary Joe or Jane—or indeed a Bob gone rogue.
Employee fraud is a deliberate and deceptive act that aims to provide the perpetrator with unlawful gain, taking advantage of their position of authority or trust. It can happen under the watchful eye of any organization—large or small—and the consequences can be complex and far-reaching.
Examples of employee fraud might include financial statement fraud, the misappropriation of assets, payroll fraud, colluding with suppliers, credit card fraud, cash skimming or larceny, bribery, or data fraud. Occurrences can also range in scale from minor false expenses claims, right through to large-scale embezzlement that is haemorrhaging company profits. Whatever the scale, if your business is a victim of fraud, action must be taken.
Tackling Employee Fraud Head-On
Internal threats can come in many forms. If you suspect any form of employee fraud, then the time to launch a corporate investigation is now. When a red flag is raised for these kinds of issues in the workplace, the next steps taken need to be cautious. A heavy-handed approach may send fraudsters under cover, while dangerously disrupting workplace dynamics.
Knowing who to trust is these instances can also be a challenge—could colleagues be colluding, or might HR find it difficult to be impartial about a beloved co-worker? Because of the legal and psychological complexities of employee fraud, turning to a trusted corporate investigations service can be the strongest tactic. Seasoned professional corporate investigators can quickly and discreetly get to the bottom of the matter, and provide invaluable advice on how to move forwards.
Adding Preventative Measures to Your Toolkit
Of course, when it comes to things that can damage the standing of your business, nothing is better than prevention. To aid organizations in the prevention of all forms of corporate crime, Lauth Investigations offers innovate Corporate Culture Audits. This health check for your business will assess the risk of trouble ahead, illuminate current issues, and lay a path towards a more prosperous, productive, and secure future. We also provide a comprehensive corporate background checks—to help you avoid introducing a bad apple to the barrel.
You’ve just pulled the trigger on hiring a bright and bold new employee, and you couldn’t be more excited. On paper, they are everything that your organization’s been looking for—and the decision to welcome them into your team comes with an implicit trust and vulnerability. So it can be difficult to imagine that such a candidate would engage in employee theft, but it is never out of the question.
At times, that faith can be bountifully rewarded, but at others, it can be met with deception and disappointment. This might be a cruel twist of fate, but it could be a correctable omission in your policies and procedures. Either way, what do you do next?
The dedicated corporate investigations team here at Lauth Investigations make it a number-one priority to help businesses like yours to minimize the risk of crises triggered by employee theft or fraud—or navigate such unwelcome occurrences with swift and decisive action, for optimal results. Read on to learn more about how to kick a laser-sharp corporate investigation into action, and the rewards to be found in harnessing preventative corporate culture audits.
Most Companies are Naive When it Comes to Employee Theft and Corporate Fraud
How common do you think workplace theft might be? Could the guilty among the workforce be 1 in 100, or perhaps 1 in 10? Shockingly to some, research reveals that roughly 75% of employees have stolen at least once over the course of their careers, resulting in a staggering $50 billion in losses absorbed by American businesses every year. While a visionary employer certainly shouldn’t allow such numbers to make them jaded at the cost of innovation, whenever suspicion arises, effective corporate investigations should certainly follow!
One of the other pitfalls that can often be correlated with misconceptions about corporate fraud, workplace theft, and even corporate data theft, is a hole in company policies. Each and every organization should have clear and calibrated policies in place that serve as a road map for handling these issues. The absence of such policies—or deviation away from them—can be detrimental should civil or criminal litigation be on the cards. If in doubt, turning to an expert corporate investigations specialist can ensure the best possible trajectory forwards, whether crisis has already arrived or not.
The Advantage of Assigning an External Corporate Investigator
Above all else, the goal of the dedicated corporate investigations specialist is to protect the resources and reputation of the company they serve. While this may be an appealing proposition, many employers still wonder if they can get away with conducting theft or fraud related corporate investigations in-house.
While this can be an effective option, internal theft and fraud investigations do come with some degree of inherent risk. The act of one colleague investigation another can leave a company open to accusations of bias or a cover-up. Meanwhile, the employee burdened with the responsibility it drawn away from their usual tasks—leaving either their professional role or the investigation to suffer. Finally, poorly conducted investigations can become a legal minefield if a neat conclusion is not forthcoming.
Following every lead to uncover and act upon suspected crimes in the workplace should be an unwaveringly thorough process. If not, the consequences can be far reaching, which is why a seasoned private investigator can be the ultimate ally. Gathering evidence, conducting interviews, liaising with authorities, and tracing assets are all part of the job—and these diligent, impartial, and fast moving investigations allow companies to get back to doing their best work at the first possible opportunity.
Revealing Pervasive Patterns and Turning the Corner Away From Employee Theft and Fraud
When all signs point to a crime being committed, a laser-focused corporate investigation is the appropriate course of action. However, what is the right path when managers or CEOs have a niggling sense that something isn’t right, suspect widespread misbehavior, or feel that the company is inexplicably underperforming?
In these moments, a comprehensive corporate culture audit is an excellent undertaking—akin to a health-check for your business. This particular arm of corporate investigations services offers preventative momentum, the chance to gain a clear picture of a broad array of potential hidden issues, and a plan that is ready to correct them. If you suspect that corporate theft or fraud is occurring on your watch, reach out to the Lauth Investigations team for friendly and definitive advice on the options that lay before you. Learn more about our expertise in the field of corporate investigations, and about the transformational power provided by corporate culture audits. Alternatively, contact us today for confidential guidance on your unique situation, and to receive a no-obligation quote.
Over the last few weeks, more Americans are being hit with mysterious wrong-number scam text messages from a strange blonde woman, since dubbed the Wrong-Number Phisher by some media outlets. She goes by several names—sometimes Amanda, or just Mandy—and slides into your inbox with a text that appears to be to the wrong number. When the target points out the mistake, the mysterious Mandy acts embarrassed, and attempts to strike up a conversation with the target. The purpose is to convince the target to sign up for adult websites in order to view nude photos of Mandy, after which point the phishers will have all the information necessary to scam the target out of hundreds, if not thousands.
The wrong-number scam is so organically scripted that its level of verisimilitude is almost staggering—so much so that it managed to fool one of our seasoned blog writers. Despite writing regularly on phishing scams and other black hat techniques, even the most experienced professional would initially consider this to be a genuine misunderstanding. The message starts out, “Hey is this____?” often using a variety of names, “its Amanda,,, we chatted on tnder before when I cam up to visit my aunt but we never met in person..i’m back in town rn if you wanted to actually go out this time, r you free?” From the use of commas as an ellipsis to the texting shorthand many users are familiar with, it has the earmarks of a genuine wrong-number texter The message is often accompanied by or followed shortly by a selfie of the woman, adding to the believability of the Wrong-Number Scam.
How the Wrong-Number Phisher Works
Embarrassed for Mandy, the target of the scam feels accommodating and willing to encourage a conversation with this beautiful, young woman, which subsequently leads to Mandy feigning attraction for the target and sending them a link to an adult website where they can allegedly view nude pictures of Mandy, which of course requires credit card information. As the first rule of internet safety goes, the user should never click on any suspicious or unsolicited emails/links, as they could be sophisticated tools used by phishers to steal their information. What makes the scheme easy to debunk is the phisher’s sometimes obvious inattention to detail. For instance, if the target has sent Mandy a picture, Mandy might incorrectly identify eye or hair color, or incorrectly assign male or female characteristics to the target. This is because a typical phishing or financial scam involves a team of phishers, a bank of computers, and a list of phone numbers. The scammer will have multiple windows up at once, speaking to multiple targets at once through anonymous, encrypted platforms such as WhatsApp. This prevents the source from being easily traced. With so many windows open at once, the phisher may lose track of whom they are speaking and will make mistakes. Vigilance of these warning signs, and additionally poor grammar and spelling, is crucial to protecting your information from scammers.
Is this sex-trafficking?
Since the first appearance of the Wrong-Number Phisher about a month ago, rumors have arisen that Mandy’s wrong-number scam may be a way to target and kidnap individuals for purposes of sex-trafficking. These rumors began when users on Tiktok began posting screenshots of Mandy’s communication, claiming they had been targeted for sex trafficking. An anti-conspiracy educator and survivor of sex-trafficking, Jessica Dean, took to TikTok to explain why this particular kind of scam would not be ideal for sex-traffickers, “Sex traffickers aren’t really targeting complete strangers—and this would be a really stupid way to target somebody if they wanted to kidnap a complete stranger, because there would be evidence on your phone…Sex traffickers overwhelmingly target people they already know. Sometimes those are people they met online, but it’s usually a very slow grooming process—they get to know you, they get you to like them, and then they start asking you ‘certain favors.”
Should you receive a text message from a strange blonde woman who claims she’s trying to reach a missed connection, the simple answer is to ignore the text and block the number. The more you converse with the Wrong-Number Scam and the more information you provide, the more the scammer will be convinced that you are a valuable target—particularly if you are ignoring basic mistakes in grammar and spelling, or ignoring misidentification errors. Phishers and scammers know that if a target is willing to overlook mistakes like those, the more likely that target will be to part with money.
Many will be familiar with the recent news of Amazon CEO Jeff Bezos’ high-profile divorce following allegations of infidelity, in which his ex-wife became the richest individual in history by virtue of divorce proceedings. The fallout from executive misconduct can leave a trail of legal fees, government sanctions, violations, and public relations-related crises that can devastate a company from the top down.
Thought to be coined in 1932, the phrase “white collar crime” now refers to a spectrum of frauds and other crimes committed by high-ranking executives and officials. The most common characteristics of white collar crime contain aspects of deceit, concealment, or violation of company policies and/or state and federal law. The motive is financial, with executives skimming off the top of a company’s profits for their own use. These crimes are sometimes thought of as “victimless crimes,” with no regard to how the fallout from a fraud or scheme can impact the company, and therefore the families of its employees. The types of fraud include, but are not limited to:
Cellular phone fraud
Credit card fraud
Health Care Fraud
Weights and measures
Corporate fraud and white collar crime of this nature remain one of the Federal Bureau of Investigation’s top priorities when it comes to identifying and indicating perpetrators. While involvement by government agencies may seem like the end of the line, there are ways companies can get out in front of executive misconduct by hiring a private investigator to investigate these matters.
Private investigators have a unique reputation as slick operators who fly under the radar, but they are invaluable professionals to companies in the throes of a corporate crisis because they are independent and objective. Objectivity is the priority when dealing with executive misconduct and white collar crime, as any allegations or evidence presented against the executive must be presented by an individual with no stake in the outcome of the investigation. Private investigators are independently contacted by a business or corporation to investigate the alleged executive misconduct, and can gather evidence and collect witness statements without the air of bias. Because private investigators are independent contractors, there is no fear of reprisal on behalf of coworkers and other employees at the company. This leaves no lead discounted or ignored. They can investigate employees at all levels, and determine how (if at all) the executive is receiving assistance in their fraud from subordinates. One of the most attractive qualities in a private investigator is that their objectivity makes them crucial witnesses in any legal proceedings that may result from the investigation.
Businesses and corporations should never be beholden to CEOs, presidents, and other high-ranking executives who behave badly. Executive misconduct and corruption are like aggressive weeds that must be pulled from the root in order for businesses to flourish. When it comes to rooting out bad leadership, consider hiring a private investigator to navigate a tricky investigative path that can end in quality operations and peace of mind for businesses large and small.
If you have a corporate crisis like executive misconduct, we can help. Call Lauth Investigations International, a family-owned-and-operated investigative firm with over 30 years of providing successful solutions to clients in Indianapolis and throughout the nation. Call 317-951-1100 for a free consultation, or to learn more about our services, please visit our website.
The invention of direct-deposit payments in electronic banking have likely saved companies millions of dollars over the years in labor hours, materials, and fees that previously caused problems for companies. However, in an age where your paycheck is sent automatically to your checking account, phishers are seeking to exploit this automation for personal gain.
The Internal Revenue Service has reported an upswing in various types of fraud that directly target a company’s payroll. While the ruses come in many forms, one of the most popular is phishing emails disguised as legitimate correspondence from an employee or upper management. It’s always an instruction to alter payroll information so that funds would be rerouted to the scammer’s bank account. Once the deed is done, the money is withdrawn and the company is responsible to replace the missing funds. While the FTC and the IRS are constantly reevaluating their strategies for containing these types of fraud, this particular scheme is hard to detect and often goes unreported. The email can outsmart security measures set down by the company or within a company’s email server, and scammers take amounts that can just be written off as unfortunate missteps on behalf of personnel.
Frauds such as these have gone through an evolution as security technology becomes more sophisticated and what we know about internet culture continues to grow. Internet frauds used to be about volume and inattention to detail—thus the birth of phishers, who sent emails rife with spelling and grammar mistakes out to mile-long email lists, casting a wide net throughout the web. Education about fraud has forced scammers to be more cautious. Today, companies who have seen this scam in its newest form remark that these phishing emails look so authentic that there may not be a question in their mind before obliging their request. Security measures that have risen from the nucleus of electronic banking combat wire fraud every day in the United States. Large sums in wire transfers now throw up giant red flags. Phishers and scammers are getting more bang for their buck by taking smaller amounts with more frequency, lurking below the radar. This does not require sophisticated hacking skills. Just the ability to open a Gmail account. Phishers make the account look cosmetically convincing, then throw out the lure. One of the most targeted entities is non-profit organizations, because of the benevolent nature of their business. The idea of someone ripping off a charity or relief organization is horrifying, but the simplicity of scams like this make the opportunity too lucrative to pass up.
It’s frightening how simple the fraud is to pull off, but there is recourse for businesses who are vulnerable to such a scam. One of the non-profits who fell prey to this scam was KVC Health Systems, an agency for child welfare in Kansas City. Their IT director, Erik Nyberg, says it starts with comprehensive education on company procedures, “The CEO is never going to email you out of the blue and ask you for any deposit changes. And if you have any sliver of a doubt, call the person who is making the request.” He goes on to discourage executives and upper management employees from using their personal email accounts to send staff correspondence, and to set email filters that will catch suspicious incoming messages. Social media managers are also cautioned against posting any company information to their pages that could serve to bolster a phisher’s credibility.
If your business has been the target of this wire fraud scam, you are encouraged to report them to the Federal Bureau of Investigation’s IC3 tip line.
Being a responsible consumer in the year 2019 means educating yourself—not just on the products and services—but of the ways scammers and thieves exploit consumer behavior for their own financial gain. As technology advances with the convenience of SMS text messaging as a security feature, financial applications that put your finances at your fingertips, and the tangled world wide web, consumer fraud scams will only continue to mutate and evolve. Here are five of the most common types of consumer fraud scams to avoid in 2019.
According to the Federal Bureau of Investigation’s Financial Fraud Unit, mortgage fraud exploits a consumer’s fear of losing their home to make a quick buck. Mortgage fraud schemes come in many forms, including but not limited to equity skimming, loan modifications, and foreclosure rescue schemes. The perpetrators behind these schemes are often former real estate professionals who use their intimate knowledge of mortgages to swindle homeowners in distress. Real estate agents who are currently employed can exploit their authority to bolster the validity of their scheme. The FBI and FTC advise that consumers should be wary of any unsolicited phone calls, emails, regarding their home finances, and never sign any paperwork or documentation that they do not fully comprehend.
Debit Card Fraud
Debit card fraud occurs when an individual’s debit card information is obtained to make fraudulent purchases. Debit card fraud is one of the most difficult schemes to avoid in day-to-day life, because so many Americans have gradually transitioned from carrying cash to carrying only their debit card as means of legal tender. Anyone with access to the debit card’s information—including the businesses and vendors we trust every day—can pull this information to commit a fraud. Unfortunately, the only recourse consumers have in protecting themselves is to avoid letting their card ever leave their sight, and to keep a watchful eye on their accounts and report any suspicious activity.
Perhaps one of the most despicable types of consumer fraud is charity fraud. Scammers set up shell organizations to receive donations that do not go to those in need, but rather line the scammer’s pockets. Frauds of these type spike significantly during the holidays and in the wake of natural disasters in order to exploit humankind’s benevolence. The name of the game with charities is research. Any charity worth its salt is going to stand up to a great deal of due-diligence and fact-finding. Part of being a responsible consumer is knowing where your money is going.
Winning the lottery is a dream of many Americans, with fantasies of kicking back and never having to put in another hard day’s work for the rest of their lives. Despite the wide range of demographics with these dreams, lottery fraud scams usually effect senior citizens in the United States. The scam usually begins with a letter or email letting the individual know they have won. The correspondence usually includes details about fees that are involved with receiving their winnings. The FTC warns that individuals who have won a legitimate lottery prize of any kind should never have to pay a fee to collect their winnings, and consumers should be suspect of any unsolicited correspondence stating as such. Consumers should also be advised that United States law does not support the sale and transference of international lottery tickets, so any correspondence from international lotteries is most certainly a scam.
Studies by Javelin Strategy & Research conducted over the last seven years indicate that in 2017, there were as many as 16.7 million Americans impacted by identity fraud, with $16.8 million in stolen funds and assets. Identity theft can be committed for a number of reasons. Perpetrators can steal an individual’s information with the purpose of starting over again under a different name, or to escape their creditors. Most commonly, however, identity fraud is simply committed with the explicit purpose of stealing money from American consumers. Once a scammer has an individual’s identifying information, like dates of birth, Social Security numbers, and their mother’s maiden name, they can use that data to make fraudulent purchases in the victim’s name, withdraw funds from their bank accounts, and destroy their credit, leaving them financially arrested. The aftermath of identity fraud is devastating and can cause shockwaves across decades with exponential consequences.
If you have been the victim of a consumer fraud scam, contact a private investigator today to learn how their unique set of skills and professional autonomy can help you locate the scammer in your midst. Call Lauth Investigations International today for a free consultation (317-951-1100) and a simple solution to your consumer crisis.
Carie McMichael is the Media and Communications Specialist for Lauth Investigations International. She regularly writes on investigation, fraud, and missing persons topics. For more information, please visit our website.