1. What You Don’t Know About Fraud
Can Hurt You (ID 27644)
Nauri Ahmed
Northern Virginia CC
Gwen Young
Thomas Nelson CC
Paul Weitzel
Eastern Shore CC
April 4, 2013 (3:15-4:15pm)-Buck Mountain
Roanoke, Virginia
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2. Overview of Presentation
Consumer Fraud Schemes
Occupational Fraud & Abuse Schemes
Fraud Stories
Fraud Awareness at Your College
Anti-Fraud Resources
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3. Consumer Fraud Schemes
Nauri Ahmed
Overview
Common fraud scams
Telemarketing fraud
Nigerian letters
Identity theft
Advance fee schemes
Health care/insurance fraud
Redemption fraud
Investment-related scams
Internet scams
Senior Citizen Target Fraud
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5. Consumer Fraud Schemes
Nauri Ahmed
Investment-related scams
Internet Scams
Senior Citizen Target Fraud
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6. Consumer Fraud Schemes
Nauri Ahmed
Some Tips to Avoid Identity Theft
Never disclose your financial or personal information in response to
an unsolicited e-mail regardless of who sent it
Never click on a link embedded in an unsolicited e-mail, regardless
of who sent it
Update anti-virus software weekly
Check your credit report once a year
Install a locked mailbox at your residence to reduce mail theft or use
a post office box.
Keep a list or photocopy of all of your credit cards, account
numbers, expiration dates, and the telephone numbers of the
customer service
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7. Occupational Fraud & Abuse Schemes
Gwen Young
Overview
ACFE definition of occupational fraud &
abuse –
“The use of one’s occupation for personal
enrichment through the deliberate misuse
or misapplication of the employing
organization’s resources or assets.”
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9. Occupational Fraud & Abuse Schemes
Gwen Young
Tips to Protect an Organization from
Occupational Fraud Schemes
Prevention
Detection and investigation
Prosecution
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10. Occupational Fraud & Abuse Schemes
Gwen Young
Why teach about occupational fraud &
abuse?
Serious problem for organizations
A knowledgeable employee is a more
valuable employee
A knowledgeable individual is a protected
individual
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11. Occupational Fraud & Abuse Schemes
Gwen Young
ACC 240-Fraud Examination
Major Topics to be Included:
Overview and introduction to fraud examination
Asset misappropriation schemes – the most common type
• Thefts of cash
• Thefts of inventory and other assets
Corruption schemes – often involve vendors
Fraudulent statements – management fraud
Course useful for: business, accounting, administration
of justice, psychology, and other students
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12. Occupational Fraud Schemes
Gwen Young
ACC 240-Fraud Examination (3 credits)
Business and accounting faculty can offer
this course at your campus in a face-to-
face, blended, or online format
This course will also be offered online
through the Shared Services Distance
Learning (SSDL) program with Northern
Virginia Community College beginning
summer 2013
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13. Occupational Fraud & Abuse Schemes
ACC 240-Fraud Examination
Course Description:
principles and methodology of fraud
detection and deterrence.
How fraud and occupational abuses occur
methods to identify the fraud risk
Prevention, detection, and investigation
approaches
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14. Fraud Stories
Paul Weitzel
K-Mart Closure -Exmore
Closest Big Box competitor
• 44 miles North in Pocomoke City, Maryland or
• 55 miles and a $17 round trip toll South to Norfolk
Exmore K-Mart Closed as under performing store
Why? The Story of Two Stores
Cost to the community
• Jobs
• Tax Revenue to Town of Exmore
• Tax Revenue/Revenue to Northampton County
Sliding through in Food Lion
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15. Fraud Stories
Paul Weitzel
County, Town and Gown
County Department of Social Services
• –Christmas Toy Fund Cash Donations
Onley Volunteer Fire Department --$400,000 missing
Onancock Town Clerk –Unknown amount
Eastern Shore’s Own Arts Center
Eastern Shore VA Tech Family and Consumer Science
Eastern Shore MD Teachers Union --$443,000 missing
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16. Fraud Stories
Paul Weitzel
Example in a Professional Practice
Physician’s Office
• Partnership
– two physicians and a single office
– one physician did not rely on income from partnership –family wealth
• Receptionist/Bookkeeper
• Followed best practices at the time
– Receptionist/Bookkeeper paid well for the position
– employee of long standing and family friend of one of the partners
– took maximum allowable vacations and in large time units
– practice income benchmarked to averages in area
• Family of one of the physicians
– Commented that receptionist wand husband were taking annual and multiple
vacations to exotic locals that physician couldn’t afford
– Receptionist and husband had new cars every year
– Physician was working excessively long hours with full load
• Detailed audit, embezzlement found and the Practice closed
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17. Fraud Awareness at Your College
Paul Weitzel
Offer periodic lectures to the college community
Establish a student chapter of the Association of
Certified Fraud Examiners
Business and accounting faculty can provide
guidance and become certified fraud examiners
(CFEs)
Students and faculty can conduct anti-fraud
education programs in the community
Resources can be provided by the ACFE
• World's largest anti-fraud organization and premier
provider of anti-fraud training and education.
• www.acfe.com
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19. Anti-Fraud Resources
Association of Certified Fraud Examiners
(www.acfe.com)
Virginia Attorney General (www.oag.state.va.us)
VCCS Forensic Accounting Organization
Email Nauri Ahmed to join
National White Collar Crime Center
(www.nw3c.org)
FTC (www.ftc.gov)
FBI (www.fbi.gov)
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20. HOW TO REACH US
Nauri D. Ahmed, CPA, CFE
Assistant Professor of Accounting/Business
Northern Virginia Community College-Woodbridge Campus
nahmed@nvcc.edu
703.878.5650
Paul Weitzel
Associate Professor of Accounting
Eastern Shore Community College
pweitzel@es.vccs.edu
757.789.1765
Gwen Young, CPE, CFE
Associate Professor of Accounting/Business
Thomas Nelson Community College
youngg@tncc.edu
757.258.6599
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Editor's Notes
KMART: 2003Store in the front –check out TV as screwdriver or not check out merely pretend.Store in back –off load inventory to waiting cars.Above are stories from students and personal observation.Jobs lost 100 full and part time jobs in a county with at that time 12.7% unemployment and per capita income of $5,000Exmore lost $35,000 annual tax revenue from storeNorthampton County lost $60,000 to $70,000 I tax revenue from storeLocal landlord --$480,000 in annual rentsAnecdotally, when the Wal-Mart opened if you had worked at Kmart, you would not be employed at the new Wal-Mart opening in 2009.Food Lion: 2013Next door to the old non-existent Kmart. Clerk not scanning items and “waving” friends through the checkout line. Two of the four Food Lion Store Managers on the Shore are former students.
Accomack County Department of Social Services solicited and collected cash donations for toys for children at Christmas. Seven thousand embezzled from donations in 2011. Onley Population 516 (2010 census); Approx. $96,000 from county each year plus other fund raising efforts; $400-500,000 missing over 5+ years. Currently asking for donations for all firefighters on the Shore due to arsons. Now county paying bills directly and requiring more oversight for all VFDs. Chincoteague was audited annually -the exception. Current 2013Onancock, a town clerk embezzled tax and water/sewage payment checks. Town resent selected tax bills in 2012 from 2009 and required a photocopy of the check or a town receipt to show no payment was due. 2011ESO –Still exists but post Executive Director embezzling, the organization diminished in programs for children, courses for adults and as an arts venue. (2010)VA TECH --Community Leader (embezzlement) sent to prison for two years and $100,000 fine. 2011Union --Former teacher embezzles $443,000 over three years –gambling losses. 2013Years are newspaper cite dates.