Page 313 - ACFE Fraud Reports 2009_2020

perpetrator’s Criminal and employment Perpetrator’s criminal background
history
100%
2010
85.7% 87.4%
perpetrator’s Criminal Background 2008
80%
Only 7% of the fraud perpetrators in our study had been
previously convicted of a fraud-related offense, which 60%
was virtually identical to our finding in 2008. Eighty-six Percent of Cases
percent had never been charged with or convicted of a 40%
prior offense. The low rate of prior convictions suggests
that criminal background checks may have some effect in 20%
preventing fraud, but the effect is probably limited. 6.7% 6.8% 7.7% 5.7%
0%
Never Charged Prior Charged But
perpetrator’s employment Background or Convicted Convictions Not Convicted
In addition to criminal history, past employment issues
may indicate that an employee is more likely to engage Criminal Background
in fraudulent conduct in the future. Of the respondents in
our survey, 791 were able to provide information about
the perpetrator’s prior employment history. Among those Perpetrator’s Employment background
cases, about 8% of perpetrators had been previously
100%
punished and 10% had been previously terminated for 2010
fraud-related conduct. 82.4% 82.6% 2008
80%

Behavioral Red Flags Displayed by 60%
perpetrators Percent of Cases
While a fraud is ongoing, the perpetrator often displays 40%
certain behaviors or characteristics that might indicate he
or she has a heightened risk of committing fraud. On their 20%
own, these behavioral red flags do not prove an individual 9.5% 12.3% 8.1%
5.1%
is engaged in a fraud, but they should raise warning sig- 0%
nals to the individual’s co-workers and managers, as well Never Punished Previously Previously
or Terminated Terminated Punished
as the organization’s anti-fraud staff. When these red flags
exist alongside other indicators of misconduct, this can be Employment Background
a strong clue that something is wrong. As discussed earlier
in this report, occupational frauds often last for months or
years before they are caught, so the ability to detect frauds
as early as possible can have a big effect in limiting losses.

2010 RepoRt to the NAtioNs ON OccuPATIONAl FRAUD ANd AbuSE | 69