Fraud Essay Essay Research Paper FraudWhat is

Fraud Essay Essay, Research Paper

Fraud

What is a Fraud. A fraud is when one party deceives or takes unfair advantage of

another. A fraud includes any act, omission, or concealment, involving a breach of legal or

equitable duty or trust, which results in disadvantage or injury to another. In a court of law

it is necessary to prove that a false representation was made as a statement of fact, that was

made with the intent to deceive and to induce the other party to act upon it. It must be

proven that the person who has been defrauded suffered a injury or damage from the act.

Who commits a fraud and why. It is generally accepted that 20 percent of

employees are honest. Another 20 percent are dishonest and don’t mind doing wrong. That

means the remaining 60 percent are potentially dishonest, that’s a total of 80 percent of

employees which may be dishonest. To understand fraud you first have to determine the

contributing factors to why people commit fraud. Some people commit fraud for the sport

and thrill of it. There are other recognizable reasons why honest people may commit a

breach of trust. Need is the most common reason. A desperate financial need is usually the

cause of most frauds. Still some people commit fraud to pay for an elevated life style

which other wise they could not afford. Needs arise from a number of locations these

include: Drug or alcohol addiction, Marriage break-ups and/of extravagant love affairs,

Gambling Debts, Business losses, Unexpected family crises, Mounting debts, and the

desire to live a lifestyle far beyond ones means.

Fraud is costing society several hundred billion a year. Organizations loose close

to 6 percent of annual revenue to fraud and abuse of social systems. Fraud costs Canadian

organizations $100 billion annually. On the average, organizations loose $9 dollars a day

per employee to fraud. On an average of fraudulent cases males received $185,000 and

females received $48,000. A study done by the insurance industry indicates the groups

most likely to commit fraud. The most typical person who may commit fraud is a

college/university educated white male. Men were responsible for almost four times the

fraud as were females. Losses caused by people with post-graduate degrees were five

times greater than those caused by high school graduates. Fifty eight percent of fraud is

committed by employees, which averages $60,000 per case. Twelve percent of fraud is

cause by owners, which on the average costs the insurance companies $1 million per case.

Fraud increases the cost of Canadians everyday living. It affects bank rates, insurance

rates, credit card rates, and product costs. All companies that suffer losses factor in the

loss to the premium and price the consumer pays.

Fraud is a white collar crime because no one physically gets hurt. The victims of

Fraud are usually: Small companies which have large clientele, such as Real estate,

financial industry, and education industries. Fifty percent of fraud involves corporations

with cash accounts. About ten percent of fraud arises from conflicts of interest, about five

percent of fraud cases come from fraudulent statements. Presently the funds obtained by

frauds are not recovered. Money obtained from crime is carefully hidden or spent avoiding

recovery by the victims and authorities. It is extremely difficult to locate hidden money’s in

today’s electronic age. Computers have increased the speed of transactions and thus often

not leaving sufficient documentation to track a potential fraud. There are numerous ways of

hiding fraudulent funds. Criminals often conceal illicit payments, launder their money, Hide

it in complex computer programs, on/off in book transactions, off shore transactions, and

net worth computations.

Fraud is on the rise and the resources to combat it are on the decline, thus making

fraud investigators jobs that much more important. Many crimes, particularly those which

are non violent crimes are going unattended by the police because they just don’t have the

man power to combat it. They are willing to look into fraudulent claims but as of recent

they lack the time and resources to give these crimes all the attention they require. The

police are now working in co-operation with insurance companies, corporations, and

investigators to try to combat this ever increasing crime. Fraud investigators are required

to have a police back ground and a real understanding as to what fraud is, how it relates to

the criminal code, and how to identify it. A fraud investigator must investigate allegations

of fraud. The investigation may require that the investigator collect evidence, take

statements, maintain continuity of evidence, analyze the scam, prepare court briefs, work

with the authorities, testify to findings in court, assist in the detection and prevention of

fraud and white-collar crime. Fraud investigators must have a extensive education

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