To stop fraud encourage whistleblowing

The average business loss due to fraud is estimated at 5% of gross revenue.  What can you do about it?

According to the Association of Certified Fraud Examiners, more than 40% of fraudulent acts are identified by employees.  This has led many firms to set up a system where employees can report fraud to a third party in the form of a hotline or administrator. 

The problem is that employees are often hesitant to report wrongdoing to external third parties. Here's how to overcome this reluctance. 

When your third-party administrator or hotline is established:

Make sure any third-party system, such as a hotline, is perceived by employees to be part of your company.

Stress that your firm prefers and supports this method of reporting.

If you use a hotline, do not call it a "hotline" because it implies something to be used only in emergencies.  Instead, use terms such as Open Line or Help Line.

Let employees report fraud anonymously to prevent fear of retaliation or being too involved with the wrongdoing.

• Periodically ask employees if they are aware of potential fraud; quarterly or annually is fine.
• Remind them that it is everyone's responsibility to report wrongdoing because losses due to fraud can cost jobs by threatening the firm's financial health.
• Institute policies for following up on reports of fraud to make absolutely sure that such reports are not ignored or brushed aside.

Bookkeeper Stole $830K from Veterans Organization: Police

The bookkeeper of a national veterans organization is accused of stealing more than $800,000 from the organization and using company credit cards for her personal airfare, vacations, and Internet purchases.

Cynthia Tanner appeared in court on Monday, where bond was set at $500,000.

In late May, the president of the National Veteran Services Fund called Darien police to report embezzlement after an accounting firm discovered irregularities in the company’s financial statements, police said.

The National Veteran Services Fund released a statement saying they worked with their CPAs after the audit revealed issues, contacted an attorney and met with Darien Police.

"The matter is in the hands of the authorities for action and therefore we have no further comment at this time," and e-mailed statement from Phil Kraft, executive director of the fund, says.

Investigators said Tanner is accused of embezzling more than $830,000 from the organization’s checking account alone over a five-year span.

The charges, however, are just for what she is accused of embezzling in 2013. Police said Tanner is accused of writing 135 unauthorized checks in 2013 for more $185,000, made payable to herself and her family members.

Tanner had worked for the National Veteran Services Fund since 2008 and was responsible for payroll and disbursing funds to the charity’s clients, according to police.

The fund, based in Darien, accepts donations to help veterans and their families across the country and used the money to pay for wheelchairs, scooters and ramps for veterans.

They have also paid utility bills for veterans and their families in danger of homelessness, as well as provided temporary housing.

The fund has also provided veterans with snow tires, dentures and a veterinary bill for a veteran’s companion animal.

Police said Tanner is accused of writing checks from the fund to pay herself money she was not entitled to, as well as checks to relatives.

However, she fabricated the financial ledger to indicate the checks were written to veterans or clients of the fund, police said.

Tanner turned herself in to police on Monday.  She has been charged with first-degree larceny. She  was being held on a $250,000 court-set bond, but that amount was doubled. She is due in court on June 30.

Her attorney did not comment on the allegations and said he needs more time to speak with his client.

Tanner was arraigned in Stamford Superior Court on Monday and is due back in court on June 30.

Police said more arrests are expected.

Darien Police 

 Cynthia Tanner, a bookkeeper for National Veteran Services Fund, is accused of embezzling more than $830,000 from the Darien organization that helps veterans.

Here’s How Shady Tax Preparers Plan to Steal Your Money

Fraud among fly-by-night, seasonal tax preparers who open up shop in vacant storefronts and trailers costs taxpayers billions of dollars each year. It has prompted the IRS to seek to regulate tax preparers by requiring education courses and examinations 

Every tax season, Elmer Kilian takes out a wooden homemade shingle that says E.H. KILIAN’S TAXES and puts it out in front of his house in rural Wisconsin. The 82-year-old Korean War veteran has prepared locals’ taxes on his dining room table for the last thirty years, helping around 100 people in the town of Eagle file to the IRS, from the local grocer to the neighbor down the street. He charges $40 for a basic filing and a little extra for the frills.

Kilian is one of more than 600,000 paid tax preparers who are virtually unregulated by the IRS. Many are as scrupulous as Kilian is, but fraud among fly-by-night, seasonal tax preparers who open up shop in vacant storefronts and trailers costs taxpayers billions of dollars each year. “It’s not just one or two bad apples. It’s pervasive,” says Chi Chi Wu, an attorney for the National Consumer Law Center. “And these problems persist.”

Read the full article.

Caught on the 'Price Is Right': Workers Compensation Fraud

ABC US News | ABC Business News

Cathy Cashwell as well as some NYC police and firefighters are under investigation for workers comp fraud.