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VideoPodcast: Employee Fraud
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Fraud Awareness Week: Conversations on Fraud
Helga Zauner, Benjamin Mao and Hannah Lee from Weaver’s Forensics and Litigation team discuss the importance of establishing controls and the segregation of duties in an organization to prevent fraud in this episode of Weaver: Beyond the Numbers. During the conversation, Helga provided a high-level overview of a case that she and Benjamin recently supported where the lack of controls in a business led to fraud.
Key Points:
- In a case involving a group of car dealerships, fraudsters engaged in a unique scheme where they created fake car sales to boost revenue and commissions, highlighting the importance of controls and segregation of duties to prevent fraudulent activities.
- The investigation focused on tracking assets and revenue through a detailed analysis of sales records, floor plan systems and VIN numbers, revealing discrepancies and red flags that uncovered the fraudulent schemes.
- To prevent similar fraud incidents, recommended controls include establishing an audit/reporting committee for oversight, segregating roles between sales and floor plan departments and ensuring independence of CFOs and accountants to reduce opportunities for collusion and fraudulent activities within the organization.
Speaking to the details of the case, Helga explained, “This case isn’t a typical fraud case where there were outflows of cash and people stealing cash; that’s not what happened, and that’s what makes this case unique. It was much more of a car Ponzi scheme … and a combination of some clever accounting tricks.”
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