Page 340 - ACFE Fraud Reports 2009_2020

Asset Misappropriation Sub-Schemes
As noted on page 10, the vast majority of occupational frauds involve some form of asset misappropriation. Within
this category, however, there are many ways for employees to misappropriate organizational assets and resources.
Our previous research has identified nine distinct sub-categories of asset misappropriations, eight involving the
theft of cash and one covering the misappropriation of non-cash assets. The table below identifies and explains
each of these categories and provides their respective frequency and costs as reported in our 2012 study.

Asset Misappropriation Sub-Categories

Number Percent of Median
Category Description Examples
of Cases All Cases Loss
SCHEMES INVOLVING THEFT OF CASH RECEIPTS
skimming Any scheme in which cash is stolen • Employee accepts payment from a 203 14.6% $58,000
from an organization before it is customer but does not record the
recorded on the organization’s books sale and instead pockets the money
and records
cash larceny Any scheme in which cash is stolen • Employee steals cash and checks 152 11.0% $54,000
from an organization after it has from daily receipts before they can be
been recorded on the organization’s deposited in the bank
books and records
SCHEMES INVOLVING FRAUDULENT DISBURSEMENTS OF CASH
billing Any scheme in which a person • Employee creates a shell company and 346 24.9% $100,000
causes his or her employer to issue bills employer for services not actually
a payment by submitting invoices for rendered
fictitious goods or services, inflated • Employee purchases personal items
invoices or invoices for personal
purchases and submits an invoice to employer for
payment
Any scheme in which an employee
expense makes a claim for reimbursement • Employee files fraudulent expense 201 14.5% $26,000
report, claiming personal travel,
Reimbursements of fictitious or inflated business
expenses nonexistent meals, etc.
• Employee steals blank company
Any scheme in which a person checks and makes them out to himself
steals his or her employer’s funds
check by intercepting, forging or altering a or an accomplice 165 11.9% $143,000
tampering • Employee steals an outgoing check to
check drawn on one of the organiza-
tion’s bank accounts a vendor and deposits it into his or her
own bank account
Any scheme in which an employee • Employee claims overtime for hours
causes his or her employer to issue not worked
payroll 129 9.3% $48,000
a payment by making false claims • Employee adds ghost employees to
for compensation the payroll
| 2012 REPORT TO THE NATIONS on occupational FRAUD and abuse
Any scheme in which an employee
cash Register makes false entries on a cash regis- • Employee fraudulently voids a sale on
disbursements ter to conceal the fraudulent removal his or her cash register and steals the 50 3.6% $25,000
cash
of cash
OTHER ASSET MISAPPROPRIATION SCHEMES
Any scheme in which the perpetrator
Misappropriation misappropriates cash kept on hand • Employee steals cash from a company 164 11.8% $20,000
of cash on Hand vault
at the victim organization’s premises
• Employee steals inventory from a
Any scheme in which an employee warehouse or storeroom
non-cash steals or misuses non-cash assets of 239 17.2% $58,000
Misappropriations • Employee steals or misuses confiden-
the victim organization
tial customer financial information
Note: Because asset misappropriation schemes are both so common and so diverse in their methods, for the
remainder of this Report, we will break down our analysis of fraud schemes into 11 categories — corruption,
financial statement fraud and the nine sub-categories of asset misappropriation — in order to provide a clear
picture of the spectrum of ways in which employees defraud their employing organizations.

12