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TRANSCRIPT
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COVID-19: Fraud’s Partner in Crime
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Join us for next week’s webinar!
We plan to cover Top Questions from Employers Regarding COVID‐19
Thursday, April 30, 2–3 p.m. CDT
› Individuals
• Participate in entire webinar• Answer polls when they are provided
› Groups
• Group leader is the person who registered & logged on to the webinar• Answer polls when they are provided• Complete group attendance form • Group leader sign bottom of form• Submit group attendance form to [email protected] within 24 hours of webinar
› If all eligibility requirements are met, each participant will be emailed their CPE certificate within 15 business days of webinar
To Receive CPE Credit
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Presenter
Bryan Callahan, CPA, CFF, CVA, CFEPartnerForensics & Valuation [email protected]
Agenda
› How COVID-19 Is Increasing Fraud Risk
› Recent Trends in Fraud – 2020 Report to the Nations
› Ways to Mitigate the Risk
› What to Do if You Suspect Fraud
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Back to Basics – The Fraud Triangle
Exacerbated ineconomic downturn
Perceived pressure
facing individual
Perceived opportunity to commit
fraud
Person’s rationalization or integrity
Quote from President & CEO of ACFE
“Coronavirus Pandemic Is a Perfect Storm for Fraud”
– Bruce Dorris, April 10, 2020
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
©2020 Association of Certified Fraud Examiners, Inc.
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©2020 Association of Certified Fraud Examiners, Inc.
Profile of Fraud Perpetrator
• No prior criminal history (5%)• Well liked by co-workers• Likes to give gifts/compulsive shopper• Gambling problems not unusual• Long-term employee• Rationalizes, starts small or “borrows”• Lifestyle clues
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› Former controller
› How it was discovered
› Expense reimbursements
› Credit card transactions
› Tickets to “Jerry World”
› Amount to date
Real Example #1
› Other unauthorized & inappropriate• 42 family related expenses, totaling $14,435.21. The expenses included Horse Riding School,
a membership fee for Elementary Parent Teacher Association (located in city where controller resided) & airfare, hotel, car & restaurant expenses for vacations to New Jersey & a cabin in Oklahoma. We also identified Las Vegas airfare for the controller & his wife
• 31 shopping related expenses, totaling $11,076.77. Merchants included Lululemon, Ertekin Fashion, Nordstrom, Francesca’s, REI, My Vinyl Direct, Etsy.com, Chewy.com, Four Paws & Buckeye Corner by Lids
• 36 expenses reimbursed more than once, totaling $10,747.50
• Three AT&T cellphone expenses, totaling $7,145.02
• 10 dentist, orthopedic, optometrist & other health & wellness related expenses, totaling $6,782.88. Eight of ten occurred in Plano, Texas, where controller resided
Real Example #1
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› Former controller
› How it was discovered
› Fictitious tax payments
› Arrest
Real Example #2
Data Analytics Basics
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Accounts Payable Payroll
General Ledger
Purchasing Cards
Examples of Uses in Examinations
Attribute Analysis
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Address Mining – Mailbox Services
Address Mining – Proximity
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Address Mining – Geocoding
AP Manager
Vinny’s Salvage Yard
Proximity
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Trending AnalysisVendor: JLM Plumbing Authorized: Janice L. McPhearson
Test phase
Acceleration as confidence
builds
Getting Greedy
Textual Analytics
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Textual Analytics
Relationship Mapping
Named Entity
Extraction
Predictive Coding
Topic Mapping
Digital Forensics
Tone Detection
Data Types
2018
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©2020 Association of Certified Fraud Examiners, Inc.
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› Resist urge to terminate them immediately
› Set up a “fence”
› Let trained interviewer have a shot
› Gather/preserve evidence
What to Do if You Suspect Fraud?
Questions?Bryan Callahan, CPA, CFF, CVA, CFEPartnerForensics & Valuation [email protected] | 317.383.4000@Bryan_Callahan3
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For more information, please visit BKD's COVID‐19 Resource Center atbkd.com/covid‐19‐resource‐center
Join us for next week’s webinar!
We plan to cover Top Questions from Employers Regarding COVID‐19
Thursday, April 30, 2–3 p.m. CDT
4/23/2020
23
Continuing Professional Education (CPE) Credit
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› CPE credit may be awarded upon verification of participant attendance
› For questions, concerns or comments regarding CPE credit, please email the BKD Learning & Development Department at [email protected]
CPE Credit
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The information contained in these slides is presented by professionals for your information only & is not to be considered as legal advice. Applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor or legal counsel before acting on any matters covered