Page 20 - Police Federal Credit Union

ALLEGATIONS OF FRAUD

It is the policy of Police FCU that allegations of fraud shall be promptly and thoroughly investigated
and perpetrators of fraud shall be thoroughly prosecuted to the fullest-extent of the law. The Credit
Union may have a need to notify appropriate law enforcement agency, regulatory agency, and CUMIS
Insurance Society, Inc. as the bond provider. The filing of a Suspicious Activity Report (SAR) may also
be warranted.

The purpose of this directive is to establish the policy and procedures related to the detection,
investigation, and prosecution of fraud by employees or Members of the Police Federal Credit Union.

Fraud by Non-Credit Union Employees

Suspicious Activity
Any suspicious activity shall be immediately reported to the President/CEO who shall appoint an
internal auditor to investigate the allegation. Employees will take extra precautions to gather and
preserve any evidence for investigative purposes. Any future transactions with the suspected party

shall be conducted very cautiously.

Discovered Fraud Activity
All evidence shall be forwarded to the internal auditor appointed by the President/CEO to conduct an

inquiry into the allegation. The President/CEO and auditor will determine when enough evidence has
been obtained to confront the suspected party. Such evidence must be of the type that would allow
law enforcement officials to prosecute the suspected party.

Future activity with the suspected party can be suspended if the auditor or the President/CEO believes
the evidence can support the suspension. The suspected party must be contacted and told about the
suspension.

If the fraudulent activity has or will cause a loss to the Credit Union or its Members, proper law
enforcement authorities shall be contacted.

Fraud by Credit Union Employees and Volunteers

Deterrence and Detection of Fraud
It is the intent of the policies of this Credit Union to discourage opportunities for fraud by its

employees and volunteers.

The President/CEO is responsible for implementing the necessary procedures and internal controls
that provide obstacles for successful embezzlement.

POLICE FEDERAL CREDIT UNION EMPLOYEE MANUAL - APRIL 2017 20 | PAGE