Fraud has many faces and is not confined to the most commonly occurring schemes such as
- bribery and corruption
- asset misappropriation including larcency and and embezzlement.
Financial statement fraud and all forms of forgery which result in fraudulent documents, statistics, reports and statements are just other variations. This has put corporations such as Enron and WorldCom and more recently Volkswagen (see my previous article) on everyone’s radar. However, financial statement fraud is not a privilege of U.S. corporations but can be found in such seemingly opposing areas such as care homes and Germany’s health care providers.
In terms of sectors, fraud is not discriminating, it is found in every sector and industry, with some perceived by the public as less prone though:
- Health care fraud, medical fraud and insurance fraud which are often interconnected and link to the wider sector, include care home fraud. Read more about Nursing Home Fraud in Germany; and see also publications by the European Healthcare Fraud & Corruption Network.
- In the broader sense, medical fraud may be interconnected with scientific and pharmaceutical fraud, see also Fraud and deceit in medical research (2012).
- Academic fraud may be related to grant and funding fraud, or fraudulent studies and misleading research findings.
Plagiarism is a type of fraud found among students, researchers and senior academics. See also Der Spiegel on Academic bribery in Germany (English), a type of fraud which applies across academic disciplines and may involve scientific misconduct, education fraud and breach of the relevant Ethics Code, see also the Guardian: UK watchdog closes 30 fake universities.
Government fraud and corruption come in many shades and are deeply damaging as they also erode public trust in governmental bodies and public services. This ranges from government officials, customs officers or other staff
- taking bribes,
- manipulating bids,
- favoring someone’s family member for a position to
- promoting a lobbyist’s agenda in exchange for gifts, favors or non-repayable personal loans etc.
In charities, sport clubs, religious congregations, churches, and other non-profit and non-governmental organizations which may be handling more cash due to donations or lack of automated payment systems, the risk of fraud still tends to be even higher. Frequently, charity fraud is found in organizations which also enjoy a high amount of public trust per se due to the nature of their cause. Fraud risk then is amplified by the lack of internal controls and independent external scrutiny, see also US charity fraud, UK Charity Fraud Line .
Essentially, fraud can happen in every industry – wherever internal and external controls are weak and poorly enforced. To illustrate this with one basic yet dominant example of fraud that prevails across the industries: fraudulent expense claims frequently concern travel costs or business gadgets. Disbursements of such fraudulent travel expenses or presumably lost or stolen mobile phones, laptops etc. will be found to have been inflated, mis-characterized, multiplied or are even fictitious.
Whether you are affected as parent, citizen or employee, business owner or somewhere in middle management, whether you lead at the top or stand in the front rows of the organization – fraud concerns everyone, also as bystander and taxpayer.
Every time, fraud goes undiscovered, or is passively tolerated by looking the other way, the entire society suffers. That means you, your family, your wider circle of loved and trusted ones, and ultimately the society you live in. Tolerating fraud is rolemodeling irresponsible tacit consent to our children and others.
Further sources which can be shared, embedded and harnessed to kicking off discussions and raising awareness – in every area of your life – are available at Fraudweek.com and via #fraudweek on Twitter