Most frauds are inside jobs

Misappropriation of assets, including embezzlement and procurement, is the most common kind of fraud, finds a global KPMG study.

The survey examines ‘white-collar’ crime investigations, where the perpetrator could be identified and provide detailed contextual information about themselves and their crime. Most often, fraudsters are employees of their victim organization. The new generation of swindlers use more technology and have access to much more information than past generations.

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“Ultimately, the fraudster of tomorrow will depend on the opportunities of the day. Two decades ago, illicitly taking money from a bank was accomplished by a closely knit gang using violent methods or forged signatures. Since that time, the ways to commit fraud have been transformed by technology—the internet, smart devices and the ability to analyze vast amounts of data,” says James McAuley, partner, KPMG Forensic.

Who is the typical Canadian swindler?

• 36 to 45 years of age
• Employed in an executive, finance, or operations function
• Holds a managerial or executive position
• Commits fraud with multiple transactions over one to five years
• Employed in their organization in excess of six years

Read: Police take down Toronto ID fraud ring

Types of fraudsters

The opportunist: a first-time offender, trusted employee, in a position of responsibility. This perpetrator is often male and married with children, with a non-sharable problem that can be solved by money. The alleged behaviour comes as a surprise to others.

The predator: someone who seeks out an organization to start a scheme almost immediately upon being hired and deliberately defrauds the organization with little remorse. These fraudsters are less common.

The colluder: this perpetrator is less common in Canada than many countries around the world, nonetheless just under 50% of Canadian fraudsters still found it tough to go solo and colluded with others. These collaborators are most frequently internal parties working together.

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Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.