Unlike other fraud investigation books on the market, Exposing Fraud develops the ethical and legal foundation required to apply theory and advice in real-world settings. From the simple to the complex, this book demonstrates the most effective application of anti-fraud techniques. IAN ROSS MS C , CFE, CICA, IAiP, is Regional Director: GIF Consultora, Full Associate of the International Academy of Investigative Psychology and an Accredited Expert Witness. He is a highly respected global trainer specialising in financial fraud, investigative interviewing skills, money laundering and corporate corruption.
Concepts and Dynamics of Fraud
I find that the harder I work, the more luck I seem to have.
Having engaged with definitions and made reasonable discourse on certain key points (misrepresentation, for example) we now begin to deal with fraud contexts and scenarios in earnest.
In the main, in fraud there is no 'scene of crime' and often there are no mistakes to follow. This is a major reason why there have been such enormous hurdles in tackling the problem. But these hurdles are in effect man-made. That is still a true entity and the existing state of the norm in investigating crime even when fraud activity took a new turn, when fraud visibly and palpably was worked into alignment with cybercrime.
A recent development also covered in this chapter is the speed and rapidity of frauds in contexts of finance and credit cards, with the unenviable task of reconciling security against fraud with the insatiable need to have the business edge against other banks and hence leading a strategy for 'Faster Payments.'
Exposing Fraud must, if it is to be taken to its full value, also bring out the shortcomings and wanton political hurdles by some in enforcement, and those with formal responsibilities to investigate, but who habitually or culturally by organisation fail to do so, and by conclusive fact, fail the victim of fraud. This is not to be critical for the sake of it. It is a simple fact that victims of fraud are not interested in hubristic politicised boasting by enforcement authorities. Instead they want action. Therefore this is to inform some simple needs for attitude adjustment to the public as opposed to promoting empires that produce little. Often also with the ever-present excuses of either 'lack of funding' or oddly constructed priorities in crime enforcement policy, or simply refusing to do what they claim to do.
Incidentally, this chapter also may help you to decide which counter-fraud industry to work in (insurance, finance, the banks, legal, main-stream industry) and you MUST 'know your business'.
2.1 COSTS OF FRAUD - INCLUDING THE HIDDEN ONES WE DON'T LIKE TO MENTION
I will be brief but pertinent at this point. I will also spare you from another dry repetition of pitching statistics with hackneyed statements of fraud losses which will be of no use by next week, and most of which evade the more inherent hidden issues of fraud 'losses'.
There are excellent resources (which pitch some scary realities) in regard to the cost of fraud. The Association of Certified Fraud Examiners (ACFE) publish their annual Report to the Nations and base their research findings on very comprehensive qualitative terms of reference. It is accepted as the foremost report of its kind. Again, the point is made that this book focuses on fraud and, whilst there are publications to report corruption levels, these are not of the same construct. Likewise, measurement of money laundering is not and in fact cannot be measured in the same way as fraud.
But the failure to learn from or even think about previous fraud occurrences is a major part of the reason why, despite more technological advances and armies of risk experts, there is more fraud and money laundering in the world than ever before. The costs never lessen. Also, it is true to say that corporations actually refuse to address previous fraud incidents to inform new counter-fraud policy planning because of reputational risk, for one reason. A brief repetition of an earlier comment will do no harm: that to be a victim of fraud is to be made a fool of. This point applies to a corporate identity as well as the individual. Too many businesses view fraud losses as mere business losses instead of criminal losses, and hence do not think in terms of crime prevention (which is not so complicated