Show MoreBank fraud is a crime that has been around as long as banks themselves. Anytime there is a large amount of money floating around, there are going to be people trying to figure out ways to get to it. In the United States, and most other developed countries, bank fraud is a serious problem that causes billions of dollars in damages every year, and is considered a federal offense. In China bank fraud is even punishable by death. Bank fraud is defined as attempting to wrongfully take money or property from a Federally insured financial institution. That doesn’t mean the banks are the only victims though. Millions of people every year fall victim to monetary damages that are caused by bank fraud.
There are two main categories when it comes…show more content…
The scam revolves around people making uninsured deposits to the bank, only to have the bank, along with their money, eventually disappear. • Forged Documents: A forged document claiming that a sum of money has been transferred to another account or something similar can be valuable to a con artist who doesn’t want the bank to notice any missing money. • Wire Fraud: It’s common place for banks to wire large sums of money on a daily basis. An insider can fraudulently wire money to a personal account at an offshore bank. It may take a bank months or even longer to notice the missing funds.
Whenever people are put in a position to handle large amounts of money, and the opportunity for fraud presents itself, it is always a serious threat. Banks and financial institutions are constantly updating security to prevent insider fraud. The documented cases of fraud have been on the decline over the last couple of decades. While computer tracking and improved security certainly deter fraudulent practices, the threat still exists, and insider fraud still occurs on a regular basis.
Fraud Perpetrated By Outside Parties
Bank fraud is not limited to those working inside the institutions. Banks, and their customers, have been long time targets for con artists. Here are some of the more common ways that fraud can be accomplished by individuals without insider access to the banks. • Check Fraud: There are a variety of ways to commit check fraud. The basic
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Being a businessperson includes many risks and sacrifices in order to become successful. One of the reasons that companies are failing is due to the fraud of their employees. In order to avoid these problems, the companies that contain a large amount of employees must take the correct precautions. All people in general are capable of committing an action of fraud. Doing something wrong or right is in the nature of all people. Jack Bolgnas says in Corporate fraud, the deference between people and other animals is that people can use the power of reason (1).
However, this ability of using reason is not always about the truth, some people use it to destroy truth by doing actions of fraud. In addition, the basic theory that Bolgnas is writing about is that truth and justice and untruth and injustice are actions that depend on each other. For example, if the actions of fraud are increasing it is because more justice and truth exists in the society and for that reason it allows fraud to expand. What exactly is fraud?
Most of the times fraud can be misunderstood, talking about it do not mean that is easy to understand it, to really know what its exact meaning is. Bolgna's ideas in this subject are that fraud, as it is understood today, means an intentional deception or a willful misrepresentation of material fact (2). Fraud is defined as lying and cheating. However not all lies are actions of fraud. For example, in a business lies may be actions of misinformation, miscalculation or just a white lie. Based on Bolgna's theories, a good synonym for fraud is cheating.
Being able to understand what the meaning of fraud is one must be able to determine the causes of fraud in the companies. The main causes of fraud are bad management, employees with no personal integrity, opportunities to commit actions of fraud and situational pressures. Bad management is a main reason that allows fraud to take place. As Al Gini said in his book My Job My Self, A big part of the reason many of as dont like our jobs is the people we work for our bosses or leaders-and the values of the work place itself (151). If the managers of a company are not examples to follow how can the employers who have less knowledge and responsibilities do their job in an ethical and correct way.
It is well known and easy to understand that bad management is a very serious problem in a company. In our day, this problem of management can be read in many magazines. An example of its popularity is the alter-ego comic book of Scot Adams. In his comic book, Dilbert his main character is criticizing and satirizing the way that the workplace functions. The story of the comic is about all bosses that are unethical and uncaring in combination with the bored, full with emptiness workers that are waiting for the time to go home doing nothing. The reason for these actions is the bad management. (151) The personal integrity of an employee is one of the important reasons for fraud.
As W. Steve Albrecht said in his book How to detect fraud, Fraud is a dishonest act committed by individuals. Regardless of the situational pressures and opportunities to commit fraud, the dishonest act is still committed by the individual and society holds individuals accountable for their behavior. As individuals adopt a strong code of personal ethics and initialize a standard of high personal integrity, the probability that they will commit a fraud is reduced. (186) To make the employees of a company feel that they are part of something important motivates them to work harder and in a more ethical way. One can observe that little acts of fraud can be in total a big loss.
In a personal Interview, Ioanou For, a chief of marketing in Cyprus, said that if employers do not have the correct personal integrity a company would be faced with many problems. For example, employers stealing from the products, stealing from office equipment, stealing money from the accounting department, stealing the ideas of their company and developing it themselves or selling them somewhere else, telling the company that they work more or work in a slower rate in order to be paid overtime, to charge the customers more and take the money, taking commission from the sales of the company. All these reasons and many more can cost a company a lot of money. The opportunities that the employers are given to commit fraud is an other reason. An elaborate security system and tight internal controls are usually considered a necessity for reducing fraud. While such programs are not the total solution to the problem, fraud can be reduced by making it more difficult to do or to hide (Albrecht, 185).
A company must be able to control the employers and not to give them chances to steal. For example, if an employer finds a signed blank check in a desk and no one is picking it up he is tempted to steal that check. In addition having a conversation with On this subject Miss Ioanou said that public companies are facing a more serious problem than the private ones as far as fraud is concerned. That is because the employers are tempted to play with the stacks. One can never be to careful so one must reduce all the possibilities to allow these actions of fraud to happen. A situational pressure that employees are facing makes them unhappy and unable to work.
In the free enterprise system, it is neither possible nor even desirable to eliminate all situational pressures. A moderate level of pressure on individuals, departments) and companies is desirable. At times, however, the pressures become overwhelming. Escape outlets, pressure valves, must be provided (Albrecht 186). An example of situational pressure is when an employee is asked to work at higher levels than he can, and to satisfy the employer he does the job but poorly. However, inn an interview Panos Page, an owner of a Company in the U.
S, said that the pressure does not always come from the working place but it always affects it. The three many reasons of pressure that he faced from experience were ergonomics, workplace violence, and drugs in the workplace. Most of us are familiar with violence and drugs in the working place but ergonomics I had to search online to find out what it is exactly Ergonomics is the science of fitting the job to the worker. If you have a mismatch between the physical requirements of a job and the physical capacity of the worker, musculoskeletal disorders (MSDs) and cumulative trauma disorders (CTDs) result. Another problem, repetitive motion injury (RMI) results when you do not match the physical requirements of the worker to the work environment. (Stammers). Situational pressure is a very serious mater in order for a company to work correctly; most of the companies are overlooking this subject.
A company cannot overlook these causes of fraud in our days because it is not something that happens rarely. Contacts were made with 55 organizations (such as the FBI, the SEC. etc) to investigate the causes of fraud, reviewed over 1, 500 references on fraud, including books, journal and magazine articles, monographs, newspaper citations, and unpublished documents. Numerous fraud perpetrators and victims of fraud, representatives from both large and small corporations, and members of auditing firms, as well as probationer, paroled, and incarcerated perpetrators). were interviewed. (Albrecht 36 - 38) From these researches, one can observe that business fraud is all over the place and none can avoid them. If a company is facing these kinds of problems, the first thing that the company has to do is to learn how to detect them.
In our days is not too difficult to detect fraud the information that one need are everywhere and easily accessible. Searching the internet a found a reliable source that helps people to detect fraud in business. In Getzoffs company that specializes in detecting fraud and has sources online too, one can observe ten important ways of detecting business fraud. Firstly, unusual behavior: if one is guilty of doing something wrong he or she acts in a very deferent way The fraudster may not ever take a vacation or call in sick in fear of being caught.
Other symptoms may be changes in behavior such as increased drinking, smoking, defensiveness, and unusual irritability and suspiciousness. Secondly, com...
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Research essay sample on Cases Of Fraud In The Business Place