South China Morning Post article on July 23, 2013 Managing Director of Verity Consulting Limited, Kelvin Ko, reveals to South China Morning Post, an employee's spending behavior can be a clue to potential threat to a company, how this can be related to fraud, and shared other tips to fraud prevention. Verity Consulting Limited is a corporate investigation consultancy based in Hong Kong providing a wide range of investigation and intelligence solutions to large and small corporations with extensive experience and networks operating around Hong Kong, Greater China and the Asia Pacific region. Learn more about us at: Website: www.verity.com.hk LinkedIn: www.linkedin.com/company/verity-consulting-limited Facebook: www.facebook.com/VerityHK Google+: plus.google.com/+VerityHK

1. When staff label their crimes as fraud
Luxury handbags among the telltale signs for miscreant workers who feed a spending habit
Original article published by South China Morning Post on July 23, 2013
July 23, 2013
Enoch Yiu
Want to know if any of your workers are stealing from you? Note what sort of handbags they have.
An investigator friend of White Collar tells how a female boss in the city knew something was amiss in
the company. The telltale signs were that all her young staff were toting luxury handbag brands such as
Prada, Christian Dior or Chanel. They were too expensive for the boss herself to buy and she wondered
how the young women who worked for her could afford them.
While these workers may have come from a rich family or had a wealthy boyfriend, the boss smelt
something fishy and hired a commercial detective. The investigation confirmed the young workers were
accepting bribes from suppliers to finance their shopping trips.
In another case, a junior staff member went on an expensive cruise that cost more than several months
of his salary. This raised the eyebrows of his boss, who hired a commercial detective who found out he
had stolen company money to pay for the trip.
According to Kelvin Ko, the managing director of commercial investigative firm Verity Consulting, when
an employee has a spending habit well above his or her salary, this should set off warning flags that
internal fraud may be occurring.
"Other red flags are that staff have very low morale or keep complaining the pay is too low, or when
staff members have serious debt problems and keep on borrowing money from colleagues," Ko said.
"Financial problems are always the reason staff steal company assets or commit other type of fraud."
Besides checking on handbags or staff holidays, the boss or human resources staff should also monitor
the leave plans of employees. When some staff put off taking leave for a number of years, it may be
because they do not want other people to expose their fraud.
Now, many companies require senior staff to take at least one long holiday of about two weeks each
year. This is to encourage employees to have a better work-life balance but it is also seen as a good
fraud-prevention measure.
Another tip is to rotate staff through different jobs or let a third party take over some of the duties. This
also helps to unveil internal fraud inside a company.
Some companies have now also set up telephone hotlines to encourage suppliers or other staff to report
alleged fraud or corrupt behaviour. Some companies have found the telephone hotline keeps on ringing.
These whistle-blower hotlines work on an anonymous basis and many people have been found to abuse
the system.
Some companies have said the hotlines have became tools for personal revenge, such as when
informants accuse colleagues they dislike or to get at former lovers after a break-up.
Verity Consulting Limited is a corporate investigation firm based in Hong Kong providing a
wide range of investigation and intelligence solutions to large and small corporations with
extensive experience and networks operating around Hong Kong and Greater China.
Phone: (852) 2581 9696
Email: info@verity.com.hk
Website: www.verity.com.hk