Below are some questions as it relates to fraud.
What is Fraud?
Fraud is the intentional false representation or concealment of a material fact that causes a person or business to suffer damages, often in the form of monetary loss.
What are the different types of Fraud?
There are many types of fraud, but most fraudulent actions can be grouped into three categories: government, employee, and consumer. Government fraud involves activities designed to deceive the government such as tax evasion. Employee fraud is when a worker defrauds his or her employer through embezzlement or falsifying expense reports. Consumer fraud includes cons or scams designed to bilk an individual out of money such as investment scams.
What are some examples of Fraud?
Examples include, but are not limited to:
Misuse of Assets
Breach of Duty
What type of Fraud is most likely to be found in the District?
Employee fraud in the form of embezzlement is the most likely to be found in the District. Embezzlement is the act of taking money that has been placed in your trust but belongs to another person or to your employer.
What elements must exist for an action or activity to be fraudulent?
Intent, deception, and harm or loss must exist for an activity to be fraudulent. For instance if someone lies about their name, it would not be fraud unless in doing so, the person caused someone else to lose money or suffer some other damage.
Is Fraud a civil violation or a criminal offense?
It can be either. If treated as a civil violation, the person or business that was defrauded will be granted a monetary judgment against the fraudster. If fraud is charged as a crime, the fraudster may face criminal penalties such as incarceration or probation.
Who is likely to commit fraud?
The person who is likely to commit fraud has the following characteristics:
Honest and trustworthy
Has position of responsibility
Male or female
In a position of trust
Fewer restrictions or controls placed on them
Why does it seem that the potential fraudster has some of the same characteristics as a trustworthy person?
Fraud is committed by one who is capable of deceiving another. When a person is in a position of trust, has responsibility, and has been around for a while they usually are deemed to be trustworthy. That same trust and reputable character is what allows the fraudster to never be suspected and oftentimes get away with fraudulent activity.
What are some common red flags in behavior that could indicate potential fraudulent activity?
Personal financial pressure
Real or imagined grievances against
Extravagant purchases or lifestyle
No vacation or sick time taken
Missing files or data
Poor money management
What are some examples of non-monetary fraudulent actions?
1. Teachers spend nights huddled in a back room erasing wrong answers on student’s test sheets and filling in the correct answers.
2. Struggling students are seated next to high performing students during testing so that they can copy answers.
3. Secretary takes lunch break from 11:30 to 1:30 p.m., but punches time clock as having taken a break from 1:30 to 2:30 p.m.
4. Students are counted as present in class room, although many are actually absent.
What are some myths about fraud?
1. Most people will not commit fraud.
2. Fraud is usually not material enough to matter.
3. Fraud can’t happen at my job.
4. Auditors will find fraud if it exists.
5. Trusted employees do not commit fraud.
How is fraud detected?
Fraud is detected in the following ways:
1. Tips and complaints from employees and others-46.2%
3. Accidental discovery-23.7%
How can I help with fraud detection?
You can help by calling the District Fraud Line at 1.888.703.0083 and making an anonymous report.