The article describes the specificity of the fuel and transportation expense fraud, elucidating its causes and outcomes. According to Hubbs, the key reason for the increase in fraud activity is the rise of fuel costs. Additionally, the globalization of business allows for more opportunities for fraud conduct (Hubbs par. 5). The author distinguished such fuel reimbursement methods as fuel credit cards, mileage reimbursement programs, take-home vehicles, fuel depots, and varied combinations (Hubbs par. 9). Hubbs reviews the key fraud schemes associated with every method:
- In the case of fuel cards, employees can perform an inappropriate vehicle fill up. It is, therefore, essential to monitor the number of galloons purchased every day and compare it to that required to perform the assigned activities. Employees can be likewise obliged to report the amount of fuel required and purchased to ensure transparency (Hubbs par. 27).
- Employees are also likely to conceal the mileage or fail to register it at all. Thus, they might report false mileage adding additional miles to their routes. To prevent this type of fraud, it is necessary to track the reimbursement rate changes on a daily basis and require employees to report all the destinations covered (Hubbs par. 36).
- According to Hubbs, it is challenging to control the use of the take-home vehicle (par. 43). Thus, many employees tend to misuse it during the non-working hours. The simplest way to detect this type of fraud is to compare the cost reports submitted by employees that have similar take-home vehicle. Additionally, consistent guidelines should be created that describes the take-home vehicle policy in detail (Hubbs par. 44).
- Hubbs notes that fraud schemes associated with fuel purchases and depots are most common in those organizations that fail to cover the relevant expenses (par. 47). As a result, employees strive to gain profit by taking fuel straight from the depot or taking less service than assigned. To detect this type of fraud, Hubbs recommends conducting “a usage-to-delivery comparison test” (par. 49). It is also suggested to compare the fuel samples to ensure that it has not been replaced with a cheaper alternative.
From the control improvement perspective, it is proposed to implement regular audits (Hubbs par. 55). All the described methods can be applied to prevent the use of combined fraud schemes as well.
Employees Are the Weakest Links, Part 1
The article describes the interconnection between data breaches and poor employee training. As such, Holtfreter and Harrington review the relevant statistics that illustrate the increase in the cyber-attack strategies aimed to take advantage of unaware personnel. As a result, the authors focus on the possible ways of preventing data breaches. They put a particular emphasis on consistent training (Holtfreter and Harrington par. 3). The authors suggest the following recommendations:
- Distinguishing different types of potential breaches including hacking, unintended disclosure, and payment card fraud to name but a few.
- Examining such data sources as Verizon and Identity Theft Resource Center to acquire a full idea of data breach classifications (Holtfreter and Harrington par. 13).
- Using a special data breach model designed based on research and studies. The model provides a complex view on the problem of data breaches, their types, and causes (Holtfreter and Harrington par. 15).
In the framework of this model, the authors suggest distinguishing five external and four internal factors affecting data breaches. The authors believe it critical to determine which factors are more likely to become the cause of the data breaches. According to them, this information is the clue to designing an effective data protection policy. The latter can be developed following several steps:
- The company should ensure that personal data is processed impartially and legitimately.
- The data should be acceptable, pertinent, and not unwarranted. Redundant data should be deleted or destroyed.
- The data should be recurrently updated to track all the changes and provide individuals with the most recent versions of the records.
- The data should only be kept for a certain period to evade redundancy.
- The data should be managed in line with the personal rights of the data subject. Any inaccurate data about them should be either corrected or removed.
- The data should be appropriately secured to avoid an illegal or unsanctioned processing of the subject’s personal data.
- The data should not be transferred unless a satisfactory level of security is provided by the parties.
Most importantly, they propose to summarize all the types of internal and external factors that have been identified in the course of previous investigations. As such, according to Holtfreter and Harrington, external factors are associated with unauthorized intrusions, and data thefts carried out by non-employees or third parties. Internal factors comprise improper data protection, data thefts, and unauthorized intrusions carried out by current or former employees. The authors note that external factors are more likely to become the cause of a data breach than internal or non-traceable drivers (Holtfreter and Harrington par. 31).
As a result, they come to a conclusion, that external parties are more skilled which explains the prevalence of external data breaches over internal intrusions. Consequently, Holtfreter and Harrington propose to enhance personnel’s professionalism and awareness of potential risks so that they do not become a soft target for criminals (par. 40).
Moving Fraud Awareness from the Back Room to the Boardroom
The article discusses how the science of fraud management has changed throughout the past decades and outlines Dr. Wells’ role in its development. The author describes the contribution that Dr. Wells made to fraud management. Thus, the broad-scale survey he initiated in the mid-90s helped to collect a large scope of data associated with organizational fraud, its cost, and main drivers (Carozza par. 6). The collected information was valuable as data mining in the fraud sector met high resistance. Managers were afraid of revealing the drawbacks of the corporate fraud policies since it obliged them to reconsider their approach and implement changes (Carozza par. 10). Wells’ research helped to illustrate the relevance of the problem and the need for improvements.
On the basis of the research findings, Dr. Wells outlined the main fraud patterns. Thus, it was proposed to distinguish three major fraud schemes – “corruption, asset misappropriation, and financial statement fraud” – and a series of their subtypes (Carozza par. 13). Dr. Wells did not only point out the most typical fraud patterns but also described the associated costs and outcomes. As a result, he provided fraud examiners with a detailed guideline for creating consistent fraud prevention strategies.
Modern investigators dispose of a much more varied database. For instance, the annual fraud reports published by the ACFE reveal all the trends associated with fraud management. Meanwhile, the author notes that with the increase in the data quantities, its character has not changed significantly. As such, no new fraud schemes have been invented since Dr. Wells’ first research was carried out (Carozza par. 21).
While fraud patterns remain the same, the attitude to antifraud activity has changed. Thus, Dr. Wells notes that modern managers show a better awareness of the cost-effectiveness of fraud prevention programs. As a result, ACFE reports are examined more carefully. It is not only the business community that analyzes the reports – institutions likewise express the interest in the fraud problem. Thus, for example, the Institute for Fraud Prevention (IFP) reports on an active investigation it carries out in the field of fraud prevention (Carozza par. 34). Therefore, the article illustrates that the years of research and studies, many of which were initiated by Dr. Wells, have helped to develop a complex database to assist fraud examiners in their activity.
Dirty Digital Dollars
The article discusses the essentials of modern cybercrime in the context of the global economy. The author describes the investigation case associated with Western Express and similar digital services to reveal the key mechanisms of identity thefts. The author puts a particular emphasis on the need for understanding the nature of the global economy. He emphasizes several critical aspects that should be considered in this frame:
- First, digital currency services do not know their customers what creates a favorable environment for online crimes. Criminals take advantage of the unauthorized access to operations designing schemes that allow transmitting millions of dollars without personal identification (Bandler par. 9).
- Second, the only way to suppress cybercrime is to enforce the relevant legislation since there are no other alternatives to control the network procedures. Thus, Bandler emphasizes the importance of money transmitting laws that “are the first step toward trying to keep our financial systems clean” (par. 13).
- Third, the author notes that criminals still manage to find ways of getting around these laws by operating digital currencies and avoiding cash withdrawals. In this case, fraud operations can only be revealed when criminals try to convert the gains into conventional currencies (Bandler par. 18).
- Forth, the author points out the importance of such a factor as distance. As such, criminals can steal money from unprotected Internet users without approaching them. The author describes a series of effectively-designed schemes that helped hackers from different countries to steal from US residents through cybercrime trade and stolen credit card data (Bandler par. 26).
- Finally, the author outlines the measures that can be implemented to reduce the incidence of cybercrime.
The last aspect is discussed in detail. First and foremost, Bandler points out the importance of the government’s inclusion in the problem resolution. Thus, he suggests that the latter comes up with the relevant laws to protect the citizens. A similar extent of responsibility needs to be appointed to large corporations than should express higher concern about corporate data safety (Bandler par. 32). Second, Bandler recommends focusing on personnel training. As such, he assumes it critical that associated specialists such as analysts, cybercrime examiners, and investigators develop their competence so that their skill keeps apace with that of the cybercriminals (Bandler par. 34). Lastly, he suggests that financial institutions participate in crime prevention more actively. Bandler believes they should enforce more regulations and means of control to ensure the safety of the key stakeholders.
On the whole, the author assumes that it is vital to develop a better understanding of the global business nature to develop effective crime prevention policies and strategies (Bandler par. 36).
Works Cited
Bandler, John. “Dirty Digital Dollars.” Fraud Magazine, 2016. Web.
Carozza, Dick. “Moving Fraud Awareness from the Back Room to the Boardroom.” Fraud Magazine, 2016. Web.
Holtfreter, Robert, and Adrian Harrington. “Employees are the weakest links, part 1” Fraud Magazine, 2016. Web.
Hubbs, Ryan. “Fuel and Transportation Expense Fraud.” Fraud Magazine, 2009. Web.