Asset Misappropriation in Cases of Fraud

Weaver’s Forensics and Litigation team discusses asset misappropriation in corporate fraud schemes and the discovery of payments through internal investigations in this episode of Conversations on Fraud.

Key Points:

• Asset misappropriation in fraud can occur through payroll schemes and payments to third-party contractors, involving tactics like ghost employees and fictitious vendor schemes.
• A recent case involved the discovery of a fictitious vendor scheme in which a fake PayPal account was used to misappropriate $300,000. and ultimately detected by examining deleted emails.
• To prevent asset misappropriation, key internal controls include segregation of duties, reconciliation of expenditures, fraud reporting hotlines and data monitoring and analytics.

Nathaniel Francis, managing director, Forensics and Litigation Services, and Travis Casner, partner, Forensics and Litigation Services, discuss various aspects of asset misappropriation in cases of fraud. They mention that employees or management can misappropriate assets through payroll schemes and payments to third-party contractors through ghost employees, bribery and fictitious vendors. Travis shares a recent example where a fictitious vendor scheme was discovered when investigating deleted emails, leading to the misappropriation of $300,000. They also discuss internal controls to prevent asset misappropriation, including segregation of duties, reconciliation of expenditures, fraud reporting hotlines and data monitoring and analytics.

©2023