While the cash value of fraud is overwhelmingly higher when committed by company owners and executives, the vast majority of fraud (76%) is perpetrated by employees and managers.¹

Fraudsters fear the spotlight, which is why many do not seek career advancement.

They never rock the boat and always show up with a smile, even when no one else has.

They speak when spoken to in collaborative settings, but have clandestine phone calls in bathrooms, hallways, alcoves, and outside.

They opt to use their holidays for extra-long weekends instead of extended vacations. 

This seems like dedication but it is actually self-preservation: they don’t want other people to pay close attention to what they’re doing or fill in for them while they are away.

They are easy to be around until they’re questioned. They become more defensive than they should be.

They are so good at lying that it all seems truthful, and sometimes they believe their own fictions. In many cases, they become like family, gaining your trust to the point that it’s almost unthinkable they could commit fraud.

Be wary of individuals who have extremely close relationships with customers or suppliers—and are overly protective of those relationships. It could be a sign of collusion.

Almost half (47%) of fraudsters have been with the company they are defrauding for between 1 and 5 years.

However, fraudsters who manage to stay undetected at their companies generally get away with stealing more. The average value of fraudulent actions committed by a 10+-year employee is $250,000.¹

A lavish lifestyle can be a red flag, especially if someone seems to be living beyond their income. Sometimes, however, living beyond one’s means isn’t limited to flashy possessions—financial obligations or difficulties could also provide motivation.

As remote work becomes more common, candidates and employees may not be as local as they once were. Doing your due diligence to verify education credentials is important.

Part penance and part flamboyance: it is easy to give away money you did not earn.

They are usually the captain of the team they are on because they crave control.

Most fraudsters aren’t born criminals. Instead, they are created by finding themselves at the right place, at the right time—a perfect storm of the conditions that complete the fraud triangle (pressure + opportunity + rationalization). 

Evidence shows that most start small and work up to high-value, white collar criminal behaviour by getting better at identifying gaps or weaknesses in internal controls, being more trusted, and thus subject to lower levels of review by peers and supervisors.

RED FLAG!

Accounting and operations are among the highest-risk departments for employee fraud,¹ potentially because of their access to financial activities and internal systems, and the position of trust they hold within the organization.

Many first-time fraud offenders walk away with a slap on the wrist and there may be no official record.

References may be vague or non-existent if people don’t feel comfortable speaking to their skills. It’s crucial to do your due diligence when hiring and conduct proper background checks. Depending on your HR policies and local laws, repeating these checks every few years could also be a good idea.