CORPORATE FRAUD DETECTION REVIEW
According to the Association of Certified Fraud Examiners, the average private company loses 5% of its annual revenue due to fraud. Losses exceeded $6.3 billion, with an average of $2.7 million. The median loss for all cases in our study was $150,000, with 23.2% of cases causing losses of $1 million or more. Asset misappropriation occurred in 83% of cases. Financial statement fraud occurred in less than 10% of cases but causing a median loss of $975,000. Billing schemes and check tampering schemes posed the greatest risk based on their relative frequency and median loss.
Frauds which lasted 18 months caused $150,000 losses, those schemes that lasted more than five years caused a median loss of $850,000.
In 94.5% of the cases the perpetrator took efforts to conceal the fraud. Fraud was uncovered through active detection methods, nearly 82% of the organizations in our study underwent independent audits with much lower losses
Small organizations had a significantly lower implementation rate of anti-fraud controls than large organizations. This gap in fraud prevention and detection coverage leaves small organizations extremely susceptible to frauds that can cause significant damage to their limited resources.
Every fraud investigation completed by Active Intel has discovered fraud, without exception. Write down your annual revenue for this year. Multiple it by 5%. What would you do with that much extra cash in your bank?
For a company with a 10% profit margin, the fraud recovery could double your net profit.
A thorough fraud investigation triangulates inquiry and scrutiny of documents, activity, and financial records using cutting edge intelligence tools and methods. Experienced investigators examine and observe the flows of assets covertly to reveal non-standard indicators. By discovering the fraud without revealing the investigation to employees, the full true nature of the fraud is determined along with all associated actors being identified. In many cases vendors, clients, and outside third parties can be complicit in the scheme. As the client you can decide how to take action for punishment or restitution.
The most common corporate fraud investigation requested by CFO’s and attorneys is listed below. Commissioning the investigation can be initiated using the confidential order link.
Active Intel Investigations’ Corporate Fraud Detection Review provides:
- Bank account search
- Real estate search
- Corporate ownership
- Brokerage accounts
- Intellectual property (patents, trademarks,
- Judgements owed
- Accounts receivable
- Asset class flow of formats
- Vessel and aircraft tracking
FRAUD & EMBEZZLEMENT RECOVERY
Research of counterparty for aquisiting, merger, or significant proposed contractual relationship. Ensure that the entity has correctly represented its market, licenses, key personnel, financial condition, and reputation.
- Officers and shareholders
- Licenses, corporate filings, related entities
- Prior corporate structure
- Key vendor interviews covert or disclosed
- Client and contract verification
- Market and competitor environment
- Documentation of sales procedures
- Identify manner of business dealings
Documentation of assets and possible transfers. Identify changes to asset class and dilution of value. Verification of any increase or decrease to net asset value of the entity or individual. Prepare reporting for seizure or writ of garnishment.
- Hard assets: Vessels, autos, equipment, aircraft
- Cash, securities, and real estate
- Notes due, UCC and receivables
- Intellectual property, trademarks, copyrights
- Business holdings, equity, and beneficial interests
- Hidden assets and those vested in other names
- Third party responsibility, accountants, agents
- Compare historical snapshots of asset values
Identity internal losses incurred through embezzlement or diversion of company assets. Document the means of theft, the entirety of the parties involved, and the location of the fraudulently lost assets. Present the overview of theft enterprise and scope.
- Investigate internal and outside involvement
- Analyze ghost vendors and payment validity
- Theft of inventory, cash, clients, and sales revenue
- Bribes and extortion
- Organized schemes of theft, and individual larceny
- Financial fraud, bookkeeping & accounting, billing
- Cargo and supply diversion
- Financial statement manipulation
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REPORTING AND PRODUCTION METHODS
• Records Intake & Review
• Data Research
• Extraction Algorithm
• Financial Records
• Witness Interviews
• Subject Observation
• Activity Monitoring
• Message Forensics
• Data Mining Program
• Legal Records
• ESI Processing
• Electronic Preservation
• Structured Data Breakdown
• Voice and Image Files
• Non-Public Records
• Family and Associates
• 3rd Party Retained Records
• Public Sector Filing Verification