KPMG International report reveals culprits are predominantly an employee colluding with others outside the organization.
Amstelveen, Netherlands, 7-11-2013 — /EuropaWire/ — In these turbulent economic times businesses and investors alike should be aware that fraudsters can come in all shapes and sizes. Who commits fraud? What characteristics should you look for? Most commonly, they are employed by the victim organization (61 percent) posing as something of a Trojan Horse. In 70 percent of frauds, the perpetrator found it tough to go solo and colluded with others. Of these, 44 percent took their time before committing a fraudulent act having been employed for more than six years by the victim organization. All of this is according to the latest study by KPMG International entitled Profile of a Fraudster.
“Fraud specialists have long debated whether it is possible to develop a profile of a fraudster that is accurate enough to enable organizations to catch people in the act of fraud or even beforehand,” Déan Friedman, leader of KPMG’s Investigations Network in the Europe, Middle East and Africa region for the Global Forensic practice. “The prediction of a crime before it occurs is, at least for now, the subject of science fiction. But an analysis of the constantly changing nature of fraud and the fraudster can help organizations stiffen their defenses against these criminal activities. Forewarned is forearmed.”
Characteristics of the typical swindler
- 36 to 45 years of age (with 70 percent of fraudsters were between the ages of 36 and 55).
- Employed in an executive, finance, operations or sales/marketing function.
- Holds a managerial or executive position (25 and 29 percent respectively).
- Employed in the organization in excess of six years.
- An opportunistic fraudster – first-time offender, trusted employee, in a position of responsibility, perpetrator’s alleged behavior is comes as a surprise to others. Predators, someone who seeks out an organization to start a scheme almost immediately upon being hired and deliberately defrauds the organization with little remorse, are less common.
Response of the fraudster to the rapid flux of the business world
The report also reveals that the three drivers of fraud – motivation, opportunity and rationale – continue to be timeless themes. Capability; however, continually changes, causing the profile of the fraudster to alter too. Organizations need to understand the ever-changing behavior of the fraudster if they are to mitigate the risk of fraud and then to respond quickly to such crimes if they occur.
“The intriguing thing about fraud is that it is always morphing, like a strain of flu; you can cure today’s strain, but next year it evolves into something as bad if not worse,” said Friedman.
One major change is the growing use of technology by fraudsters, and not just in the technologically advanced countries, such as the US. A concern for all business is that we are about to see a new generation of people, able to use more technology and with access to much more information than past generations. All of which points to a new era for fraud and illegal activities.
“Companies can’t stand still and allow yesterday’s controls to address today’s or tomorrow’s fraudster,” continues Friedman. “Technology not only enables the fraudster, but also enables the organization to defend itself. Newer approaches like data analytics and data mining give the company a much better chance of catching the fraudster.”
The opportunistic fraudster
The study found that over half (54 percent) of the frauds were facilitated by weak internal controls. This suggests that if many organizations tightened controls and the supervision of employees, the opportunity for fraud would be severely curtailed. Too often, organizations do not focus on fraud prevention by setting up the right controls and learn their lesson too late.
But strong internal controls will not prevent all fraud. For 20 percent of the fraudsters, the fraud was committed recklessly, regardless of the controls. And for 11 percent, fraudsters colluded to circumvent the controls. In these cases, the fraudster may be somebody who understands the controls and knows how to manipulate them or who finds a flaw in the controls by accident and exploits them.
Other key survey findings
- It’s all about the money for most: The overwhelming reason for committing fraud is financial. Out of a total of 1,082 motivations listed, 614 were motives of greed, financial gain and financial difficulty, and a further 114 were related to business targets. The only non-financial motive that comes close is sheer eagerness (or “because I can”) with 106.
- No need to play by the rules: A third of the fraudsters (36 percent) indicated that a sense of superiority was their rationale for their fraud. This may be linked to the fact that 29 percent of the frauds were committed by executive directors, the largest single job title.
- Common crimes: The most prevalent fraud is misappropriation of assets (56 percent), of which embezzlement comprises 40 percent and procurement fraud makes up 27 percent. The second most prevalent fraud is revenue of assets gained by fraudulent or illegal acts (24 percent).
- Not a solo act: When acting in collaboration, 71 percent of frauds were perpetrated over one to five years. With regard to value, 18 percent of frauds had a total value of $50,000 – 200,000.
Culture of corruption
To a large extent, culture influences our actions and determines what we consider ethical and compliant behavior. Therefore, it’s interesting to note key regional differences in the survey findings.
- At the global level, there were elements of bribery and corruption in one third of the frauds (33 percent). This compares with the US (24 percent), China (48 percent), CIS (64 percent) and West Africa (67 percent).
- Fraudsters in Canada, more than in other countries, try to avoid the risks of having an accomplice.
- 50 percent of the investigated cases in the US occurred in a highly regulated environment, compared with 50 percent in China, 33 percent in CIS and none in West Africa.
- There were more people committing fraud after working for the victim organization for only one to four years in the UK, Canada, Czech Republic and India, than in South Africa and Germany.
“Ultimately, the fraudster of tomorrow will depend on the opportunities of the day,” said Friedman. “Two decades ago, illicitly taking money from a bank was usually accomplished by a closely knit gang, sometimes using violent methods or forged signatures to achieve their ends. The opportunities to rob a bank have been transformed by the internet, smart devices and the ability to analyse vast amounts of data. While the fraud landscape has not changed significantly in recent years, companies need to watch the horizon over the next 18 months to see if a changing economy or environment affects its fraud risk.”
About the survey
Data was gathered from fraud investigations conducted by KPMG member firms’ forensic specialists in Europe, Middle East and Africa (EMA), the Americas, and Asia-Pacific between August 2011 and February 2013. KPMG analyzed a total of 596 fraudsters who were involved in acts committed in 78 countries. The survey examined “white collar” crime investigations conducted across the regions where the perpetrator was known and detailed contextual information on the crime available. The report builds on the similar studies from 2011 and 2007.
About KPMG
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
For more information, please contact:
Amy Greenshields, KPMG International
+1 416 777 8749
- Unlocking the Multi-Million-Dollar Opportunities in Quantum Computing
- Digi Communications N.V. Announces the Conclusion of Facilities Agreements by Companies within Digi Group
- The Hidden Gem of Deep Plane Facelifts
- KAZANU: Redefining Naturist Hospitality in Saint Martin ↗️
- New IDTechEx Report Predicts Regulatory Shifts Will Transform the Electric Light Commercial Vehicle Market
- Almost 1 in 4 Planes Sold in 2045 to be Battery Electric, Finds IDTechEx Sustainable Aviation Market Report
- Digi Communications N.V. announces the release of Q3 2024 financial results
- Digi Communications NV announces Investors Call for the presentation of the Q3 2024 Financial Results
- Pilot and Electriq Global announce collaboration to explore deployment of proprietary hydrogen transport, storage and power generation technology
- Digi Communications N.V. announces the conclusion of a Memorandum of Understanding by its subsidiary in Romania
- Digi Communications N.V. announces that the Company’s Portuguese subsidiary finalised the transaction with LORCA JVCO Limited
- Digi Communications N.V. announces that the Portuguese Competition Authority has granted clearance for the share purchase agreement concluded by the Company’s subsidiary in Portugal
- OMRON Healthcare introduceert nieuwe bloeddrukmeters met AI-aangedreven AFib-detectietechnologie; lancering in Europa september 2024
- OMRON Healthcare dévoile de nouveaux tensiomètres dotés d’une technologie de détection de la fibrillation auriculaire alimentée par l’IA, lancés en Europe en septembre 2024
- OMRON Healthcare presenta i nuovi misuratori della pressione sanguigna con tecnologia di rilevamento della fibrillazione atriale (AFib) basata sull’IA, in arrivo in Europa a settembre 2024
- OMRON Healthcare presenta los nuevos tensiómetros con tecnología de detección de fibrilación auricular (FA) e inteligencia artificial (IA), que se lanzarán en Europa en septiembre de 2024
- Alegerile din Moldova din 2024: O Bătălie pentru Democrație Împotriva Dezinformării
- Northcrest Developments launches design competition to reimagine 2-km former airport Runway into a vibrant pedestrianized corridor, shaping a new era of placemaking on an international scale
- The Road to Sustainable Electric Motors for EVs: IDTechEx Analyzes Key Factors
- Infrared Technology Breakthroughs Paving the Way for a US$500 Million Market, Says IDTechEx Report
- MegaFair Revolutionizes the iGaming Industry with Skill-Based Games
- European Commission Evaluates Poland’s Media Adherence to the Right to be Forgotten
- Global Race for Autonomous Trucks: Europe a Critical Region Transport Transformation
- Digi Communications N.V. confirms the full redemption of €450,000,000 Senior Secured Notes
- AT&T Obtiene Sentencia Contra Grupo Salinas Telecom, Propiedad de Ricardo Salinas, Sus Abogados se Retiran Mientras Él Mueve Activos Fuera de EE.UU. para Evitar Pagar la Sentencia
- Global Outlook for the Challenging Autonomous Bus and Roboshuttle Markets
- Evolving Brain-Computer Interface Market More Than Just Elon Musk’s Neuralink, Reports IDTechEx
- Latin Trails Wraps Up a Successful 3rd Quarter with Prestigious LATA Sustainability Award and Expands Conservation Initiatives ↗️
- Astor Asset Management 3 Ltd leitet Untersuchung für potenzielle Sammelklage gegen Ricardo Benjamín Salinas Pliego von Grupo ELEKTRA wegen Marktmanipulation und Wertpapierbetrug ein
- Digi Communications N.V. announces that the Company’s Romanian subsidiary exercised its right to redeem the Senior Secured Notes due in 2025 in principal amount of €450,000,000
- Astor Asset Management 3 Ltd Inicia Investigación de Demanda Colectiva Contra Ricardo Benjamín Salinas Pliego de Grupo ELEKTRA por Manipulación de Acciones y Fraude en Valores
- Astor Asset Management 3 Ltd Initiating Class Action Lawsuit Inquiry Against Ricardo Benjamín Salinas Pliego of Grupo ELEKTRA for Stock Manipulation & Securities Fraud
- Digi Communications N.V. announced that its Spanish subsidiary, Digi Spain Telecom S.L.U., has completed the first stage of selling a Fibre-to-the-Home (FTTH) network in 12 Spanish provinces
- Natural Cotton Color lancia la collezione "Calunga" a Milano
- Astor Asset Management 3 Ltd: Salinas Pliego Incumple Préstamo de $110 Millones USD y Viola Regulaciones Mexicanas
- Astor Asset Management 3 Ltd: Salinas Pliego Verstößt gegen Darlehensvertrag über 110 Mio. USD und Mexikanische Wertpapiergesetze
- ChargeEuropa zamyka rundę finansowania, której przewodził fundusz Shift4Good tym samym dokonując historycznej francuskiej inwestycji w polski sektor elektromobilności
- Strengthening EU Protections: Robert Szustkowski calls for safeguarding EU citizens’ rights to dignity
- Digi Communications NV announces the release of H1 2024 Financial Results
- Digi Communications N.V. announces that conditional stock options were granted to a director of the Company’s Romanian Subsidiary
- Digi Communications N.V. announces Investors Call for the presentation of the H1 2024 Financial Results
- Digi Communications N.V. announces the conclusion of a share purchase agreement by its subsidiary in Portugal
- Digi Communications N.V. Announces Rating Assigned by Fitch Ratings to Digi Communications N.V.
- Digi Communications N.V. announces significant agreements concluded by the Company’s subsidiaries in Spain
- SGW Global Appoints Telcomdis as the Official European Distributor for Motorola Nursery and Motorola Sound Products
- Digi Communications N.V. announces the availability of the instruction regarding the payment of share dividend for the 2023 financial year
- Digi Communications N.V. announces the exercise of conditional share options by the executive directors of the Company, for the year 2023, as approved by the Company’s Ordinary General Shareholders’ Meetings from 18th May 2021 and 28th December 2022
- Digi Communications N.V. announces the granting of conditional stock options to Executive Directors of the Company based on the general shareholders’ meeting approval from 25 June 2024
- Digi Communications N.V. announces the OGMS resolutions and the availability of the approved 2023 Annual Report
- Czech Composer Tatiana Mikova Presents Her String Quartet ‘In Modo Lidico’ at Carnegie Hall
- SWIFTT: A Copernicus-based forest management tool to map, mitigate, and prevent the main threats to EU forests
- WickedBet Unveils Exciting Euro 2024 Promotion with Boosted Odds
- Museum of Unrest: a new space for activism, art and design
- Digi Communications N.V. announces the conclusion of a Senior Facility Agreement by companies within Digi Group
- Digi Communications N.V. announces the agreements concluded by Digi Romania (formerly named RCS & RDS S.A.), the Romanian subsidiary of the Company
- Green Light for Henri Hotel, Restaurants and Shops in the “Alter Fischereihafen” (Old Fishing Port) in Cuxhaven, opening Summer 2026
- Digi Communications N.V. reports consolidated revenues and other income of EUR 447 million, adjusted EBITDA (excluding IFRS 16) of EUR 140 million for Q1 2024
- Digi Communications announces the conclusion of Facilities Agreements by companies from Digi Group
- Digi Communications N.V. Announces the convocation of the Company’s general shareholders meeting for 25 June 2024 for the approval of, among others, the 2023 Annual Report
- Digi Communications NV announces Investors Call for the presentation of the Q1 2024 Financial Results
- Digi Communications intends to propose to shareholders the distribution of dividends for the fiscal year 2023 at the upcoming General Meeting of Shareholders, which shall take place in June 2024
- Digi Communications N.V. announces the availability of the Romanian version of the 2023 Annual Report
- Digi Communications N.V. announces the availability of the 2023 Annual Report
- International Airlines Group adopts Airline Economics by Skailark ↗️
- BevZero Spain Enhances Sustainability Efforts with Installation of Solar Panels at Production Facility
- Digi Communications N.V. announces share transaction made by an Executive Director of the Company with class B shares
- BevZero South Africa Achieves FSSC 22000 Food Safety Certification
- Digi Communications N.V.: Digi Spain Enters Agreement to Sell FTTH Network to International Investors for Up to EUR 750 Million
- Patients as Partners® Europe Announces the Launch of 8th Annual Meeting with 2024 Keynotes and Topics
- driveMybox continues its international expansion: Hungary as a new strategic location
- Monesave introduces Socialised budgeting: Meet the app quietly revolutionising how users budget
- Digi Communications NV announces the release of the 2023 Preliminary Financial Results
- Digi Communications NV announces Investors Call for the presentation of the 2023 Preliminary Financial Results
- Lensa, един от най-ценените търговци на оптика в Румъния, пристига в България. Първият шоурум е открит в София
- Criando o futuro: desenvolvimento da AENO no mercado de consumo em Portugal
- Digi Communications N.V. Announces the release of the Financial Calendar for 2024
- Customer Data Platform Industry Attracts New Participants: CDP Institute Report
- eCarsTrade annonce Dirk Van Roost au poste de Directeur Administratif et Financier: une décision stratégique pour la croissance à venir
- BevZero Announces Strategic Partnership with TOMSA Desil to Distribute equipment for sustainability in the wine industry, as well as the development of Next-Gen Dealcoholization technology
- Editor's pick archive....