Page 126 - ACFE Fraud Reports 2009_2020

How Occupational Fraud is Committed

Fraudulent Disbursements
The remaining six cash schemes target outgoing disbursements of cash. They are: billing schemes, payroll schemes, expense
reimbursements, check tampering, wire transfers and register disbursements. Billing schemes were the most common form
of fraudulent disbursement, occurring in over one-quarter of all the asset misappropriation cases in our study. The median
loss attributed to billing schemes was $130,000, making them the second most expensive form of fraudulent disbursement
behind wire transfers, which had a median loss of $500,000. Expense reimbursements ranked second in terms of frequency,
but they had the lowest median loss at $25,000.

Schemes Involving Fraudulent Disbursements of Cash
Cases % of Asset Median
Category Description Examples
Reported Mis. Cases Loss
Billing Any scheme in which a ¨ employee creates a 294 28.3% $130,000
person causes his or her em- shell company and bills
ployer to issue a payment employer for nonexistent
by submitting invoices for services.
fictitious goods or services, ¨ employee purchases
inflated invoices or invoices personal items, submits
for personal purchases.
invoice for payment.
Expense Any scheme in which an ¨ employee files 202 19.5% $25,000
Reimbursements employee makes a claim fraudulent expense
for reimbursement of report, claiming
fictitious or inflated business personal travel,
expenses. nonexistent meals, etc.
Check Tampering Any scheme in which a ¨ employee steals blank 177 17.1% $120,000
person steals his or her company checks, makes
employer’s funds by forging them out to himself or an
or altering a check on one of accomplice.
the organization’s bank ac- employee steals
counts, or steals a check the ¨ outgoing check to a
organization has legitimately vendor, deposits it into
issued to another payee.
her own bank account.
Payroll Any scheme in which an ¨ employee claims over- 137 13.2% $50,000
employee causes his or time for unworked hours.
her employer to issue a ¨ employee adds ghost
payment by making false employees to the payroll.
claims for compensation.
Wire Transfers Any scheme in which a ¨ employee causes funds 67 6.5% $500,000
person steals his or her to be wired from
employer’s funds by company bank accounts
fraudulently wire to an account controlled
transferring them out of the by employee or
employer’s bank accounts. accomplice.
Register Any scheme in which an ¨ employee fraudulently 18 1.7% $26,000
Disbursements employee makes false voids a sale on his cash
entries on a cash register register and steals the
to conceal the fraudulent cash.
removal of cash.

1 ACFE Report to the Nation on Occupational Fraud & Abuse