Different Forms of Fraud

Corporate fraud as a dishonest activity for organizations that is considered as white collar crime has serious legal implications. Though it can be difficult to detect and catch, it is important to prevent it by creating effective and efficient policies for the organizations that ensure an efficient system of checks and balances exists in the organization for its physical and fiscal security.

Whenever fraud happens in a company or organization, it often takes the form of hiding sources of revenue, overstating expenses or growth, or disguising payments made to individuals in the company. Often, fraudulent activities within the organization are complex in nature and have a gross impact on the financial nature of the organization. It is usually perpetrated by the company management and other employees are often unaware of these fraudulent activities (Mele, 2005).

Corporate fraud, as difficult as it is to prevent, often has a ripple effect whereby when one company collapses as a result of corporate fraud, other partner companies often feel this effect and sometimes even face collapse. When a company is involved in allegations of unethical behavior, for example accounting fraud, its stock falls fast and other companies in the same industry or sector and partner companies also feel the effect. There is need to ensure companies have strong accounting policies that prevent corporate fraud.

These include having external auditors check and sign company expenditure and using internal controls in company accounting (Panda, 2006). Governmental crimes and corruption Corruption is an unethical deal undertaken by an individual such as embezzlement and bribery, often occurs when governmental employees acting in an official capacity do something for personal gain. It often takes the form of bribery, embezzlement, or extortion. Bribery is the situation whereby a government official receives an item such as money or favor to swing a decision in favor of the other party.

Embezzlement occurs when the official spends money on personal items and disguises these payments as official. Lastly, extortion or blackmail is where the official threatens someone with violence, imprisonment, or exposure of their secrets in order to get them to agree to an action or decision. Corruption amounts to abuse of office since the government official is using their official capacity for their own personal gain. It decreases transparency since these corrupt dealings are done in secret, and degrades the moral values of the government.

Anti-corruption programs are targeted at catching these government officials taking bribes or ensuring strong practices such as internal controls in order to eliminate systemic corruption. It is important for these anti-corruption practices to be enforced and targeted to prevent officials that may choose to be corrupt from being corruptible (Bertrand, 2009). Medical fraud Medical or health care fraud occurs when medical professionals or organizations are willing to risk patient's lives or well-being for the sake of their own personal gain.

A quintessential example is when these organizations or professionals defraud insurers such as private insurers, Medicare and Medicaid. It can happen when these organizations or professionals bill the insurers for services that they did not render, up coding of items or services, presenting duplicate claims, claiming for excessive or unnecessary services, or receiving kickbacks. According to the Federal Bureau of Investigation, health care fraud costs the country at least 80 billion dollars each year.

It is a rising threat to national health care expenditure which is already high at about 2.7 trillion dollars annually. The Federal Bureau of Investigation is involved with investigating and exposing health care fraud. It is the only body with the jurisdiction over federal and private insurers (Federal Bureau of Investigation, 2014). Whenever patients or health care providers believe they have reasonable suspicion regarding health care fraud, they should contact their local Federal Bureau of Investigation office or fill the online tips forms.

The person who reports this claim is protected and rewarded by the whistleblower clause of the False Claims Act. Computer fraud Computer or information technology fraud occurs when an individual or organization uses a computer to commit fraud. A good example is when a person alters electronic records of a company to issue checks payable to vendors in their own name. Therefore, according to the company, the payments are issued to the vendors but the actual checks are written in the name of the fraudulent individual.

Denial of service or DDoS attacks are the more common form of computer fraud. It occurs when a person hacks into a company's website or bombards it with fraudulent requests to deny.