Part of being a good private investigator is keeping up with the research and trends of fraud and deviant behavior.  The Association of Certified Fraud Examiners (ACFE) produces numerous articles on fraud and fraud prevention.  Recently, I came across a very interesting article by Ryan C. Hubbs, a fellow Certified Fraud Examiner (CFE).  In the article, Hubbs makes a strong point that discovering workplace deviant behavior may lead to more serious discoveries, such as fraud; therefore, identifying the correlation between deviant behavior and fraud improves the ability to uncover fraud.

In numerous fraud cases, Hobbs would notice that the immoral employee displayed signs such as watching porn, bullying, harassing, and participating in other behaviors which provoked complaints in Human Resources.

In one of Hubbs’ investigations, he investigated an employee who had been caught watching adult movies and purchasing them with the company credit card. Apparently, this employee had begun this secretive behavior on the first day of the job and had continued to hide the addiction for several years, racking up thousands of dollars in credit card charges.  This case ended as most related cases do — with the employee’s resignation.

After the resignation, Hobbs discovered that this behavior was merely the tip of the iceberg.  An audit of this non-profit organization’s donations showed that an additional $50,000 was stolen. Another audit of cash of the cash disbursements account reveled that this ex-employee had written personal checks totaling more than $28,000.  Shockingly, the total amount of fraud was more than $82,000.

While an employee committing fraud may be able to cancel the fraud, keeping their deviant behavior secretive is more difficult. If management can begin to see the correlation between the existence of deviant behavior and fraud, there is a strong possibility that the fraud can be prevented or mitigated.

What Do You Need To Do To Assure That You Are Being Vigilant Regarding Fraud?

  1. Do you have strong HR polices in place that prevent deviant behavior?
  2. Does you company have a strongly worded IT and PC use policy statement that does not allow the visiting of porn and other adult content websites?
  3. Does your firm conduct routine audits of all employees that have access to computers and the Internet in addition to audits of the the websites that the employees visit?
  4. Is there segregation of duties that does not allow the same person to request, write, and cash checks?
  5. Are basic audits performed on cash and credit card usage?
  6. Does your firm take a top down approach regarding preventing deviant behavior?

This list contains just a few of many preventative measures that can be put into place to help identify someone in your organization that may be on the path to committing fraud.  An experienced private investigator and Certified Fraud Examiner can review your company’s polices and practices to help put the strongest meters in place to ensure that deviant behaviors and fraud is prevented.

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