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Fraud and Abuse Case
Healthcare fraud and abuse continues to threaten the country, costing the facility billions of dollars per year. Brodeur, (2007) stated that fraud is something difficult to understand because it is a contagious issue. Healthcare fraud and abuse according to Brosman & oper (2007) is the most profitable thing one can take part in if he/she is a crook, it avoid all channels and legal procedures, in nutshell, have no hurdles.
Commonly types of healthcare fraud and abuse cases are revealed where one bill for services not offered, up coding which refers to hiking bills with intention to get higher reimbursement increment. Unbundling which entails submission of separate bills for single component of an activity for example billing independently for categories of laboratory tests done together with the aim of getting high reimbursement. These fraud activities are against compliance laws and regulations and it is unethical and…
Brosman, J., & Roper, J.M. (2007). The reality of political ethical conflicts: Nurse Manager Dilemmas. Journal of Nursing Administration, 27(9), 42-46.
Brodeur, D. (2008). Health care institutional ethics: Broader than clinical ethics. In J. Monagle & D.C. Thomasma (Eds.), Health care ethics: Critical issues for the 21st century (pp. 497-504). Gaithersburg, MD: Aspen. (Brodeur, 2008)
Bucaro, F. (May 24, 2008). Ethics gap provides dilemma for businesses. The Akron Beacon Journal, G11. (Bucaro, 2008)
Canavan, K. (2006, October). Nursing addresses troubling trends in managed care. The American Nurse. Washington, DC: American Nurses Association.
In the modern society, many organizations across various industries are increasingly vulnerable to electronic fraud. The threat of electronic fraud across these industries is particularly worsened with the emergence of computer fraud. Actually, computer fraud and crime has continued to be a major concern in the recent past since computer processing can evade the conventional security and control measures. However, computer fraud doesn't necessarily involve the use of micro-computers as it just makes electronic fraud and computer crime easier. The threat of electronic fraud is also a major concern across various industries because modern technology offers fraudsters with powerful new cracking tools for electronic safe. Notably, these crimes can be severe since electronic fraud can take place for extended periods before discovery, which in turn results in considerable losses and damages.
Forms of Fraud Techniques:
Since fraud is undoubtedly not a new concept and did not emerge with…
Cameron, S. (2011, August). Digital Evidence. Retrieved from The Federal Bureau of Investigation website: http://www.fbi.gov/stats-services/publications/law-enforcement-bulletin/august-2011/digital-evidence
Easttom, C. & Taylor, D.J. (2011). Computer Crime, Investigation, and the Law. Boston, MA:
Lewis, J.A. (2002, December). Assessing the Risks of Cyber Terrorism, Cyber War and Other
Fraud in the United States: An overview
Fraud has always existed in the United States, but a number of systemic changes in the way that business is handled have caused fraud to become more common than ever before, in both private industry and government. For example, according to the ACFE (Association of Certified Fraud Examiners) magazine Fraud, "the rise in contract management and the outsourcing of goods and services has created an increase in procurement fraud" (Piper 2012). Theoretically, when making awards the main considerations should be the quality of the work of the firm to which the labor is outsourced and the price. However, at one company, during the bidding process, "all the reputable contractors" had been given low ratings, except one new company, to which the new contract was awarded "at double the price... [said the investigator] 'I later learned the bid evaluators were friends with…
Hubbs, Frank. (2012). Fraud brainstorming. Fraud. Retrieved:
Humphrey, Peter. (2012). Avoiding trouble in China. Fraud. Retrieved:
Fraud is an important consideration in the area of legal contracts because of the fact that if fraud is present in the formation of a contract, the contract can, and mostly will, be invalidated. To establish contract fraud, it must be established that the party committing the fraud knowingly misrepresented a material fact with the intent to defraud and that the opposing party justifiably relied upon such misrepresentation (Blair, 2009). In order for the fraud to affect the contract the effected party must have suffered injury. Without injury the contract will not be affected.
In the legal sense, a misrepresentation of a material fact usually means that a party lied about a term of the contract that was essential in the decision making process that resulted in the contract being formed. It is important to distinguish between what constitutes a lie in the formation of a contract and what constitutes…
Blair, A. (2009). A Matter of Trust: Should No-Reliance Clauses Bar Claims for Fraudulent Inducement of Contract. Marquette Law Review, 423-475.
Harris, D. (2005). Remedies in Contract and Tort. New York: Cambridge University Press.
Shell, G.R. (1991). When is it Legal to Lie in Negotiations. Sloan Management Review, 93-101.
Identify potential financial statement fraud schemes at Apollo
In many instances the quantitative figures of companies can be misleading. The nature of generally accepted accounting principles (here forth referred to as GAAP), are such that they provide flexibility in determining appropriate financial figures. On occasion, management or executives may misrepresent these figures to make the company seem more or even less attractive during certain periods. For example, a company may take more losses in the current period, in order to seem more profitable in subsequent periods that follow. Likewise, companies may also seem to be more profitable than they are in an effort to hide substantial losses that have occurred in the business operations. Complicating the financial issue further is the fact many transactions don't appear within the financial statements at all. These transactions, called "Off-balance sheet transactions" can have a profound impact on the value placed on various…
1) Introduction to Economic Analysis. Web. 05 Dec. 2011. .
2) "Debt Fight Endangers U.S. Creditworthiness Outside the Box - MarketWatch." MarketWatch - Stock Market Quotes, Business News, Financial News. Web. 20 May 2011. .
125). The use of case study examples is a brilliant tool for making the reader believe that white-collar crime is indeed something that needs to be addressed on a macro rather than a micro level, because the people injured by fraudulent accounting and auditing to name a few white-collar crimes, are not just the people that work for a company or the criminals. The people harmed include members of the community that have used their tax dollars to support these leaders and organizations that claim to work for the benefit of society at large. osoff, Pontell & Tillman (2004) suggest that white-collar crimes should be viewed as no less hazardous than blue collar crime, a fact supported by many reviewers of the work including Bergevin, who suggests that white-collar crime as defined by osoff, Pontell & Tillman should be considered as "vilified" or costly and damaging as blue-collar crimes (p.…
Bergevin, Dan. Profit without honor: White-collar crime and the looting of America, 3rd
Ed. Security Management, 48.5:2004, May, p.125
Rosoff, Stephen M., Pontell, Harry N., & Tillman, Robert. Profit without honor: White-
Collar crime and the looting of America. Upper Saddle River NJ: Pearson Prentice Hall, c2004, 3rd. Ed.
As a student entering my senior year of accounting studies, I have found that my interests and natural tendencies lie in the field of fraud awareness and prevention. It is my goal to work in fraud prevention once I graduate. With Enron, WorldCom, Adelphia and Tyco all names in common use on the daily news, I feel that being aware of and specializing in fraud prevention is extremely important. And it is unfortunate that fraud is not only involved with these big name companies. Some of the nation's largest accounting firms have come under investigation by the Securities and Exchange Commission for their roles in Enron and other accounting scandals. Companies like Arthur Andersen and Price Waterhouse Cooper have come under indictment for conspiring with companies to defraud investors. And the resulting billion dollar bankruptcies have a significant impact on the nation's economy.
I feel that…
During this process you would want to collect any kind of financial information that will be relevant for the completing the audit. Once this takes place, you would want to establish a follow up interview with key personnel in the company. The idea is compare and analyze what you are being told by executives with actual documentation. Where, you would look for inconsistencies when comparing what the person is saying with: various financial numbers and then using common sense. At which point, you would ask them a series of questions and pay attention to changes in their body language and the way they are talking (to determine any kind of inconsistencies through non-verbal cues). (Siegle, 2008) (easley, 2008)
Discuss how the Audit Evidence will be evaluated and Conclusion Drawn
The audit evidence will be analyzed based upon comparing the actual numbers, with the various responses from executives at the company.…
Beasley, M. (2008). GAAS Guide 2009. Chicago, IL: CCH.
Siegle, J. (2008). The Vest Pocket CPA. Hoboken, NJ: Wiley.
Madoff had not been investing the money he was trusted with but he was using it to pay returns to other investors. Millions of people and thousands of hedge funds around the globe were affected when Madoff's Ponzi scheme was disclosed. It is hard to fathom that such a massive scam could run for decades with so much success and the only person responsible was Madoff himself. Some other people must have had some inkling of what was going on especially the auditors. Christopher Miller, chief executive of London hedge fund ratings agency Allenbridge Hedgeinfo, agrees that Madoff was not alone in running this Ponzi scheme: "Some very big investor names are involved in this. The scheme could only work if enough investors were subscribing for him to pay money out. Some of the world's biggest hedge funds have been hit by this. There will be a monumental impact for…
John Carrey. "Bernie Madoff: Bigger than Enron." Business Insider. Accessed online 23rd July 2009 http://www.businessinsider.com/2008/12/bernie-madoff-bigger-than-enron
Billing schemes are cited as the most common and costly occupational frauds and defined as the issuance of payment to a non-existent vendor or to a company that is controlled by an employee. Preventing billing schemes requires that the employer be familiar with vendors they conduct business with, ensuring that employees cannot write checks to vendors who they set up with the company, and vendors addresses need to be checked against employee addresses. The provision of one of the scheme methods provides insight into the type of fraudulent activity possible within a company, yet does not further explicate other schemes and their roles in asset misappropriations.
Though fraud cannot be completely eliminated, Wells provides a listing citing preventive measures that can be put into action. Initial steps include setting up a checklist that will allow a company to implement an effective anti-fraud program. This list includes education employees about the…
Nilsen, K. (2010). Keeping Fraud in the Cross Hairs. Journal of Accountancy, 209 (6), 20-25.
When it comes to any crime or series of crimes, there are three main components that are typically present when it comes to the people involved. Those three parts would be the opportunity, the financial pressure involved and the rationalization.
In the case of the 2001 Dutch construction fraud episode, the opportunity would be created by the fact that the regulation and control of the Dutch construction market was not pressing or present enough to stop the fraud from starting of perpetuating. As will be explained later in this section, the opportunity for crime in the Dutch construction industry from 1992 to 2001 was substantial due to the lack of clarity the law and the even lesser enforcement quality that underpinned the same (Vulperhorst, 2005).
The financial pressure involved in that scandal would be to create and extend profits and money stores more so than is typically…
Chotibhongs, R, & Arditi, D 2012, \\\\'Detection of Collusive Behavior\\\\', Journal Of Construction
Engineering & Management, 138, 11, pp. 1251-1258, Academic Search Premier,
EBSCOhost, viewed 13 August 2017.
Dorée, AG 2004, \\\\'Collusion in the Dutch construction industry: an industrial organization
perspective\\\\', Building Research & Information, 32, 2, pp. 146-156, Business Source
Premier, EBSCOhost, viewed 13 August 2017.
Expatica (2003). Dutch building companies face fraud charges. [online] Expatica.com. Available
at: https://www.expatica.com/nl/news/Dutch-building-companies-face-fraud -
Explain how the fraud triangle applies to the CEO and the Controller
The fraud triangle consists of perceived pressure, perceived opportunity and rationalization. With Bernie Ebbers, the opportunity was clear. As CEO, he had the ability to order others in the organization to conduct acts that would result in the fraud, specifically the fake elements of the financial statements. The pressure that Ebbers felt was that most of his wealth was in WorldCom stock. At the time the fraud began, the economy was entering recession and companies were beginning to reduce their telecom spending in particular. This was creating strong downward pressure on WorldCom stock, and consequently on Ebbers' wealth, and it was this pressure that was believed to be at the root of the fraud (Crawford, 2005).
Rationalization is a bit trickier. Ebbers claimed that he didn't know about the fraud (Crawford, 2005), which was untrue, so in…
Crawford, K. (2005) Ex-WorldCom CEO Ebbers guilty. CNN Money. Retrieved June 2, 2018 from http://money.cnn.com/2005/03/15/news/newsmakers/ebbers/
Fleming, A., Hermanson, D., Kranacher, M. & Riley, R. (2016) Financing reporting fraud: Public and private companies. Journal of Forensic Accounting Research. Vol. 1 (1) 27-41
Hamilton, W. (2005) Ebbers tells jury he knew little of accounting. LA Times. Retrieved June 2, 2018 from http://articles.latimes.com/2005/mar/01/business/fi-ebbers1
Teather, D. (2002) Former WorldCom controller admits fraudulent entries. The Guardian. Retrieved June 2, 2018 from https://www.theguardian.com/business/2002/sep/27/corporatefraud.worldcom
Enron committed financial fraud prior to its collapse in 2001 by overstating its earnings and using mark-to-market accounting essentially to cook its books and dupe third-party auditing firm Arthur Andersen. Enron’s CFO Andy Fastow and its CEO Jeff Skilling used mark to market accounting to log future estimated profits as actual profits and a number of other financial fraud practices were used—such as creating shell vehicles to hide losses and create fantasy profits. The company used the same fraudulent practices as Charles Ponzi and other Ponzi-scheme artists, like Bernie Madoff, to create the illusion of generating enormous returns, all the while depending on new investors to keep up the illusion of cash flow.
Skilling benefited for a time, getting recognized as a genius who transformed the energy company into a financial company. Fastow benefited because he was skimming off the top. Investors in the publicly-traded company benefited as the share…
Segal, T. (2019). Enron scandal. Retrieved from https://www.investopedia.com/updates/enron-scandal-summary
Lifestyle Red Flags of Fraud Perpetrators
As the Association of Certified Fraud Examiners (2010) points out, the average fraud perpetrator has—like David L. Miller—no prior fraud convictions. The offender is typically in the 30 to 45 years age range and is more likely to be male than female. Both of these characteristic profile traits fit Miller to a “t”. Moreover, four out of five fraud perpetrators are likely to work in the accounting department of an organization, again just like David L. Miller. And as the perpetrator ages so too does the level of fraud increase in terms of losses (Association of Certified Fraud Examiners, 2010)—again just like with the case of David L. Miller. This paper will analyze the case of David L. Miller and show why he fits the profile of a fraud perpetrator well and why companies tend not to press charges against people like him.…
Barry Minkow (ZZZZ Best)
Tell the story
Barry Minkow is a con-man, who at the sage of 16 years established an outwardly fruitful carpet cleaning and restoration company by the name ZZZZ Best. Four years in after founding the company, Minkow took the company public. Notably, the shared he owned at the company had a valuation of $100,000. In a span of five years, the company had a market capitalization of $200 million. However, when the company collapsed in 1987, financial investigators came to the realization that most of the corporation’s purported revenues were fictitious. Regrettably, the financial statements of the company together with their associated source documents were all counterfeit. This was ascertained after a newspaper investigated into the activities of th company. Eventually, discovery of fraud took place and Minkow was given a jail sentence of 25 years in a federal prison. In addition, the court made an…
Clikeman, P. M. (2013). Called to Account: Financial frauds that shaped the accounting profession. New York: Routledge.
Rezaee, Z., Riley, R. (2009). Financial statement fraud: prevention and detection. Hoboken: John Wiley & Sons.
Singleton, T. W., & Singleton, A. J. (2010). Fraud auditing and forensic accounting (Vol. 11). Hoboken: John Wiley & Sons.
Fraud and Abuse
United States v. Greber -- 3rd Circuit, 1985
Dr. Greber's company, Cardio-Med, supplied Holter monitors, a device worn by patients that records heartbeats for later interpretation. Investigations showed that Cardio-Med billed Medicare and gave a portion of each payment to the prescribing physician, under the heading, "interpretation fees," even when Dr. Greber actually did the interpretation of the data. It was found that the fixed percentage paid to the referring physicians was more than Medicare allowed for such services. Further, Medicare requires that the device be used eight hours or more to qualify for payment. Cardio-Med and Dr. Greber reported longer operation times than the patients actually used their monitors.
In 1977, Congress changed the fraud statute of Medicare to clarify such problems as "kickbacks." In the revised statute, kickbacks were defined as any remuneration that might in any way be perceived as encouraging one company…
The other two cases looked at errors that were made deliberately by subsidiary management and, in both cases, were both quantitatively and qualitatively material.
Due to the fact that most fraud starts at the bottom, is it very important for executives to always be looking for things that do not appear to be right. Fiscal honesty is crucial in financial markets. It is essential that management quickly resolve any monetary issues that come up. Delay only compounds accounting indiscretions. The consequences to all concerned, the business, its investors and creditors, and administration, are that if things are left unattended they will only get worse.
There is no alternative to good systems of recordkeeping, controls, and oversight. Management cannot be distant and disinterested. Financial reports must be looked at and examined, not just amassed. Discrepancies must be rapidly resolved. Communication of accounting rules and measures must be apparent and timely. Doubts…
Weinstein, Edward a. (2010). When it Comes to Fraud, it's Better to Be Safe than Sorry. The CPA Journal, p.6-9.
There are a myriad of approaches companies use to perform click fraud, ranging from the heavily manual-based to the completely automated. The intent of this analysis is to explain what click fraud is and its impact on internet advertising. Click fraud began when the business models of websites and online advertising businesses charged advertisers for every click a potential customer had on an advertisement or promoted link (Midha, 2009). Unethical online advertising businesses have been caught inflating the number of advertisements that have been clicked on to deliberately drive up what their advertiser customers owe them (Wilbur, Zhu, 2009). This has come so commonplace that there is a continual stream of litigation and lawsuits that allege various online advertising networks engage in this practice to gain greater profits from customers (Midha, 2009). From the simple manually-based click-throughs of ads to the highly complex use of bots and automated…
Midha, V. (2009). The glitch in online advertising: A study of click fraud in pay-per-click advertising programs. International Journal of Electronic Commerce, 13(2), 91.
Wilbur, K.C., & Zhu, Y. (2009). Click fraud. Marketing Science, 28(2), 293-308,401.
cross examine the accounting fraud scandal that took place at Xerox, the main intention of this analysis is to know the causes and the effects of the scandal as well as the need of a good practice in business ethics, corporate management and the general oversight. Xerox was able to utilize a creative technique of accounting to give false presentation of its assets and liabilities, they also deceive the investors and lastly they were able to inflate their socks. The main players of the scandal were the chairman, CEO and other high ranking officials who took the advantage and enriched themselves (Gara, D. 2004). The high ranked officials made away millions of shillings at the expense of the stakeholders. This scandal highlighted the need for accountability and ethics in the governance of finance as well as corporate.
The analysis also aims to examine the strategic mistakes that led the Xerox…
Coenen, T. (2008) Essentials of corporate fraud. John Wiley and Sons. Retrieved on May 25, 2014 www.slideshare.net/divinvarghese/xerox-corporation-fraud-case-982933
Pickett, K.H. Spencer. (2007)Corporate fraud a manager's journey. John Wiley and Sons. Retrieved on May 25, 2014 www.wsws.org/en/articles/2002/.../xero-j01.htm
Gara, D. (2004) Corporate fraud case studies in detection and prevention. John Wiley and Sons. Retrieved on May 25, 2014 www.money.cnn.com/2002/04/11/technology/xerox_fraud
Comer, M. (2003) Investigating corporate fraud. Gower Publishing, Ltd. Retrieved on May 25, 2014 www.i-sight.com/.../xeroxs-accounting-scandal-recovery-tactics
Fraud is a growing problem in today's business world, and this article chronicles the capture of a purchasing manager defrauding his organization. The author follows step-by-step the accountant called in to decipher just how the manager was defrauding the organization. Immediately, CPA Chris osetti discovered two flaws in the state agency's internal controls. The manager was not forced to take a vacation every year, and the manager also had approval powers overstepping his position. Author Wells notes, "Once employees start committing fraud, they can't take time off because they need to constantly cover up what they're doing. The second deficiency was that Bruce [the manager] was allowed to approve new vendors" (Wells). osetti methodically goes about deciphering Bruce's activities while discovering more and more discrepancies between purchases, costs, and vendor files. As osetti dug deeper during Bruce's unplanned absence to take care of his ill wife, he discovered a number…
Wells, Joseph T. "The Case of the Pilfering Purchasing Manager." Journal of Accountancy - Online Issue - May 2004. 29 April 2004. http://www.aicpa.org/pubs/jofa/may2004/wells.htm
Medicare and Medicaid Services (CMS), previously the Health Care Financing Administration (HCFA), that by the time 2011, health care expenditure will arrive at $2.8 trillion, as well as it will bill for 17% of the Gross Domestic Product. As a result, it is no revelation that white-collar offenders observe health care deception as a rewarding effort. Certainly, the General Accounting Office ("GAO") quotes that such deception accounts for up to 10% of entire health care expense (3).
As health care deception outlays taxpayers almost $100 billion a year, federal, as well as state agencies have given health care fraud tribunal a key center of attention. All through her term, Attorney General Janet Reno made impeaching health care fraud a top precedence at the Department of Justice ("DOJ"), subsequent only to brutal offenses (3).
The government focuses its pains to perceive, as well as take legal action against health care fraud…
(1) Adelaide Few & Jay Trezevant, Fighting the Battle Against Health Care Fraud & Federal Enforcement Actions, 72 FLA. B.J. 34, 34-6 (1998)
(2) Alice A. Love, Leniency Offered Health Care Providers that Admit Federal Fraud, S.D. Union Trib., Oct. 22, 1998
(3) Andy Bunds, The results of the Health Insurance Regulations on Health Care Fraud and Abuse, 72 Mont L. Rev. 63, 72 (2001)
(4) Brian A. Kaset, Sailing Without Safe Harbors: Physician Recruitment and the Law of Fraud and Abuse, 9 Healths Span. 9, 9 (1992)
What is financial fraud?
Effect on Economy
Are we Protected?
Identity Theft in Business
Loss Prevention Planning and Strategies
Financial fraud was an unfamiliar notion prior to the 2000's, but has become a controversial and familiar term due to economic woes, public disapproval and revamped financial regulations. Light was shed on some of America's top organizations intentionally changing their accounting books to look more attractive to investors than they were in actuality. Institutions and/or ranking officials at institutions were falsely publishing financial statements with fabricated values and profits presenting the illusion that investments with these entities were producing and would continue to produce consistent returns. In addition to recurring fraudulent activity, new highs for deposits of fraudulent checks were recorded by banks nationwide.
Government agencies aim to set regulations, enforce regulations, and protect American businesses and consumers from fraudulent activity. Laws are…
Elliott, T.L. (2013). Business ethics perspectives: Faculty plagiarism and fraud. Journal of Business Ethics, 112(2), 91-99.
Laufer, D. (2011). Small business entrepreneurs: A focus on fraud risk and prevention. American Journal of Economics and Business Administration, 3(2), 401-404.
Nikitkov, A. & . (2008). Online auction fraud: Ethical perspective. Journal of Business Ethics, 79(3), 235-244.
Yallapragada, R.R. (2013). Accounting fraud, and white-collar crimes in the United States. Journal of Business Case Studies, 8(2), 187.
Q1. How have accounting techniques changed in recent years? How do they resemble practices in Italy during the Renaissance?
According to McCrie (2016), one of the great innovations which emerged during the Renaissance was that of double-entry bookkeeping. This technique, still used today, records the organization’s assets in one column or book versus liabilities, or claims on those assets (p.252). The term “dual entry” came into practice given both records were listed in dual columns. Still, some substantial innovations have taken place since the early days of double-entry bookkeeping, most notably the advent of technology such as computers to compute assets and store data. The actual book of originally-recorded assets in real time now called a journal and the book which records the cumulative data is called a ledger. Debits and credits are the terms are now the preferred terms for assets and liabilities. But while terminology has changed and…
Particulars of Enron's Bankruptcy
There were a number of specific actions that led to Enron's bankruptcy. The majority of these pertain to a lack of accountability on the part of numerous people in key positions at this firm. The individual accountants at Arthur Andersen, the now defunct accounting firm that worked for this company, allowed Enron to utilize dubious accounting practices without trying to curtail them. Upper level management was guilty of allowing such accounting practices to take place, and of being too concerned with acquisition and spending to ensure the company was operating in accordance with the standards provided by the Securities Exchange Commission. Several fraudulent activities also contributed to Enron's bankruptcy. These include the insider trading that took place, the misrepresentation of the company as financially viable when it was on the verge of bankruptcy, and many others.
One of the primary accounting and auditing practices that eventually…
Cross, J.N., Krunkel, R.A. (n.d.). Andersen implosion over Enron: an analysis of the contagion effect on Fortune 500 firms. University of Wisconsin.
Emshwiller, J.R. (2001). Enron transaction with entity run by executive raises questions. The Wall Street Journal. Retrieved from http://faculty.msb.edu/bodurthj/teaching/ENRON/Enron%20Transaction%20With%20Entity%20Run%20by%20Executive%20Raises%20Questions.htm
Fraud and the Elderly
Elderly Fraud Victimization
Prevalence and Predictors of Fraud Victimization among the Elderly
Prevalence and Predictors of Fraud Victimization among the Elderly
Applied esearch and Consulting (AC, 2013) conducted a recent national online survey for the FINA Investor Education Foundation, with the goal of quantifying the prevalence of fraud victimization among the American adult population. Any American over the age of 40 was invited to participate, but for the purposes of meeting the 2010 Census distribution for age, ethnicity, and geographic location the sample was limited to 2,364. The primary focus of the study was financial fraud, including red flag persuasion tactics, cold calls, free lunch seminars, oil and gas scams, promissory note scams, pump and dump, pre-IPO scams, multi-level marketing, digital currency, lottery scams, and affinity (relatives) fraud. On a scale of one to ten, with one representing the most risk averse, persons over the age…
ARC. (2013). Financial Fraud and Fraud Susceptibility in the United States: Research Report from a 2012 National Survey. Retrieved from http://www.finra.org/web/groups/sai/@sai/documents/sai_original_content/p337731.pdf
Forum on Global Violence Prevention; Board on Global Health; Institute of Medicine; National Research Council. (2014). Elder Abuse and Its Prevention: Workshop Summary. Washington, D.C.: National Academies Press.
Holtfreter, K., Reisig, M.D., Mears, D.P., & Wolfe, S.E. (2014). Financial Exploitation of the Elderly in a Consumer Context. Retrieved from https://www.ncjrs.gov/pdffiles1/nij/grants/245388.pdf .
ite Aid Fraud
Over the years, there have been numerous cases of financial fraud perpetuated within the organizational mainstream of major companies. Financial fraud is often a well-coordinated sort of white-collar crime that often -- but not always - requires complicity and collusion amongst financial accountants, top management and auditors. ite Aid came to the limelight after the U.S. Securities and Exchange Commission announced that it would be filing accounting fraud charges against the company in 2002
Meanwhile, the United States Attorney for the Middle District of Pennsylvania leveled similar criminal charges accusing former CFO Frank Bergonzi, former CEO Martin Grass and former Vice Chairman Franklin Brown of perpetuating an immense accounting fraud scheme
. Compounding the crisis, according to former ite Aid COO, Timothy Noonan, were years of legal coaching amongst staff and mid-level employees. As investigations ensued, evidence of fraudulent manipulation of accounts, corporate malfeasance, and financial overstatement…
Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002
Federwisch, Anne Exploring Ethical Lapses during the Rite Aid Crisis Santa Clara University: Center for Allied Ethics, 2002
Jennings, Marianne Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns Before it's Too Late Arizona State University W.P. Carey School of Business, 2007
Carlin, Wayne M. & Pennington, Nelson "SEC Announces Fraud Charges Against Former Rite Aid Senior Management" Security and Exchange Commission 2002
Without proper background checks prior to making the hiring decision, an organization can find itself employing individuals who have recently been fired elsewhere for fraud or theft.
An organization can also seek to prevent employee fraud as well as theft by developing well drafted and concise guidelines in regard to acceptable standards of conduct. In the opinion of Beesley (2011), there is an existing need for each and every business to have in place "an employee code of ethics and conduct." The author in this case points out that although such a document cannot entirety prevent instances of fraud; it does make a contribution to the promotion of lawful and ethical conduct.
Beesley (2011) also reaffirms Siegel's assertion as highlighted earlier on in this text that employee fraud largely has little or nothing at all to do with economic problems or conditions. As the author points out, studies have in…
Beesley, C. (2011). 6 Tips for Preventing Employee Theft and Fraud in the Workplace. Retrieved May 22, 2012, from SBA.GOV website: http://www.sba.gov/community/blogs/community-blogs/small-business-matters/6-tips-preventing-employee-theft-and-fraud-wo
Bologna, J. & Shaw, P.D. (1997). Corporate Crime Investigation. Burlington, MA: Elsevier.
Siegel, L.J. (2010). Criminology: Theories, Patterns, and Typologies (11th ed.). Belmont, CA: Cengage Learning.
In the wake of scandals such as Enron and others, corporate fraud still appears to be prevalent across the business world. The reasons for this can be many and varied, although greed and a sense of hubris appear to be two of the common role players. In other cases, desperation could also be a factor, where a business is in danger of failing and its owners or managers see little choice but to cheat or sing with the boat. In many of the fraud cases, questions regarding regulation also abound, where regulatory authorities appear to be unable to either identify fraudulent activity or to sufficiently monitor the actions of those involved. This appears to be at least partly the case as far as ussell Wasendorf Sr. is concerned, who recently confessed to have committed fraud as the owner of his brokerage for 20 years Huffstutter and Polansek, 2012).…
Holton, C. (2009). Identifying disgruntled employee systems fraud risk through text mining: A simple solution for a multi-billion dollar problem. Decision Support Systems, Vol. 46. Retrieved from: ftp://126.96.36.199/gyliao/TODylan/Identifying%20disgruntled%20employee%20systems%20fraud%20risk%20through%20text%20mining-%20A%20simple%20solution%20for%20a%20multi-billion%20dollar%20problem.pdf
Huffstutter, P.J. And Polansek, T. (2012, Jul 13). With ego too big to fail, Iowa broker admits 20-year fraud. Reuters. Retrieved from: http://news.yahoo.com/pfgbest-ceo-arrested-iowa-brokerage-fails-181115538 -- sector.html
Johnson, S.A., Ryan, H.E., and Tian, Y.S. (2008, Feb 29). Managerial Incentives and Corporate Fraud: The Sources of Incentives Matter. Retrieved from: http://www2.wu-wien.ac.at/rof/papers/pdf/Johnson-Ryan-Tian_Managerial%20Incentives%20and%20Corporate%20Fraud.pdf
Langevoort, D.C. (2007). On Leaving Corporate Executives "Naked, Homeless and Without Wheels": Corporate Fraud, Equitable Remedies, and the Debate Over Entity vs. Individual Liability. Georgetown Law; The Scholarly Commons. Retrieved from: http://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?article=1453&context=facpub&sei-redir=1&referer=http%3A%2F%2Fscholar.google.co.za%2Fscholar%3Fhl%3Den%26q%3Dcontrols%2Bon%2Bcorporate%2Bfraud%26btnG%3D%26as_sdt%3D1%252C5%26as_sdtp%3D#search=%22controls%20corporate%20fraud%22
Evaluate the factors that add to corporate fraud
The business fraud can be credited to conditions emerging from deceptive monetary reporting and misappropriation of possessions. These conditions are 3 and all 3 features of the fraud triangle have to exist for fraud to take place. Management or staff members have to have the reward or pressure to dedicate fraud, see the opportunity emerge and have the ability to justify the occasion.
Management or perhaps others in the workforce will have benefits or conditions of pressure to carry out fraud. If the choice is made by management to publish illegal monetary statements, the most typical reason for this will be threat by financial, market or entity operating conditions to the monetary security and productivity of the business. Extreme pressure is put on management to satisfy the projection made by industry experts, internal company projections or to pay back…
ISACA, 2011. COBIT Framework for IT Governance and Control. Retrieved from http://www.isaca.org/Knowledge-Center/COBIT/Pages/Overview.aspx
Louwers, T., Ramsay, R., Sinason, D., & Strawser, J. (2007). Auditing & Assurance Services: A Look Beneath the Surface. (2nd ed.). New York, New York: McGraw-Hill/Irwin.
Temple University. "Auditing ACCT 3596." Fox School of Business. 13th Ed. United States of America: Pearson, 2009. Print.
Wells, Joseph T. Corporate Fraud Handbook: Prevention and Detection. Hoboken, NJ: John Wiley & Sons, 2007. Print.
Financial Fraud Fannie Mae
eview of Fraud Schemes within Fannie Mae 1998-2004
The agency found the fraud understatements of earnings and illegal gratuities that led to accounting violations and inability to meet Wall Street goals.
The investigation of Lee Frakas, executive of a major mortgage company which had dealings with Fannie Mae with hundreds of fake mortgages. The Securities Exchange Commission cited that Fannie Mae had to repay earnings and correct their books for the period 2001 through 2004. This major undertaking will cost the company over $11 billion by SEC estimates. In addition the Department of Justice has conducted a criminal investigation on the board members.
The top executive managing Fannie Mae were found guilty of illegally reporting accounting information that led to their receiving million dollar payments. Under Fraudulent Financial Statement Schemes this case is one of corruption and financial fraud. The specific areas include Illegal…
Associated Press. (2006). Fannie Mae manipulated accounting. Retrieved January 19, 2012 from http://www.msnbc.msn.com/id/12923225/ns/business-corporate_scandals/t/report-fannie-mae-manipulated-accounting/#
Schoenberg, T. (2011). Silence on taylor bean opened the way to $3 billion fraud. Retrieved January 19, 2012 from http://www.freerepublic.com/focus/f-news/926704/posts
Contracts and Fraud
Contracts are one of the cornerstones of our modern legal system. They are necessary to conduct reliable economic transactions between individuals. When people make a formal agreement such as buying a car they must be assured that the requirements of both parties will be fulfilled: the seller will receive his or her money and the buyer will receive a vehicle. A critical component of contract law is the need for a contract that is not fraudulent in nature, since contracts depend upon a system of trust between both parties. "If fraud or misrepresentation occurred during the negotiation process, any resulting contract will probably be held unenforceable. The idea here is to encourage honest, good faith bargaining and transactions. Misrepresentations commonly occur when a party says something false (telling a potential buyer that a house is termite-free when it is not) or, in some other way, conceals or…
Election of remedy. (2013). U.S. Legal. Retrieved:
Fitzpatrick, D. (2013). Unenforceable contracts: What to watch out for. Nolo. Retrieved:
Organization: ank of England
Fraud is intentionally deceiving a person such that he or she incurs a loss and the fraudulent person makes a gain. Instances of fraud can include misappropriation of funds or assets, inappropriate expenditures, fraudulent financial reporting etc. (Stephanie, 2008). A recent FI statistic explores the extent of fraud in non-profit organizations. In its report, the FI alleged that approximately 2,300 websites that solicited help for victims of Hurricane Katrina were in fact fraudulent (Aviv, n.d). Therefore, banks in general, and bank of England in particular, need to be cautious of such organizations. The best way to achieve that is to have clear cut policy and understand operating procedures with regards to dealing with the non-profit sector.
The occurrence of fraud often costs non-profits a lot. They not only lose money but make a huge dent in their reputation due to the bad publicity that…
(n.d.). Eliminating Public Sector Fraud. The Counter Fraud Taskforce.
(2011). Fighting Fraud in the Public Sector. PWC.
(n.d.). FRAUD PREVENTION AND DATA PROTECTION. ACCIS .
"Audit Report" by the Office of the Inspector General/Social Security Administration, detailing fraud committed by beneficiaries of federal Social Security programs, seehttp://www.ssa.gov/oig/ADOBEPDF/A-01-06-26022.pdf
Olympus Corporation Fraud Case:
Olympus Corporation is one of Japan's most vulnerable companies that faced potential bankruptcy and possible jail time for its executives in 2011. The firm was founded in 1919 and it's a manufacturer of electronic equipments and digital cameras. In addition to being headquartered in Tokyo, Olympus Corporation is a multibillion-dollar company with its operations across the globe. In October 2011, the corporation was hit by a scandal when its Chief Executive Officer was suddenly fired, a decision that was attributed to a culture clash. While the chief executive had worked in the firm for three decades, he was sacked for attempting to force investigations into various acquisitions made before he was appointed as chief.
The investigations were on three acquisitions made by Olympus including the fees paid to an obscure financial advisor in 2008 worth $687 million over the acquisition of Gyrus, the British medical equipment.…
Bovington, T. (2011, December 13). No Risk Management System at 'Corrupted' Olympus.
Retrieved June 12, 2012, from http://www.rmprofessional.com/rm/olympus_committee_report.php
France-Presse, A. (2012, March 7). Olympus Corp ex-officials Charged in Scandal. Retrieved June 12, 2012, from http://www.rawstory.com/rs/2012/03/07/olympus-corp-ex-officials-charged-in-scandal/
Greenfield, K.T. (2012, February 16). The Story Behind the Olympus Scandal. Retrieved June
The facts that you have provided indicate extremely troubling circumstances that could seriously jeopardize the welfare of your organization. It is well-settled law that entities contracting for the services of subsidiaries are legally responsible for legal and ethical improprieties committed by those subsidiaries irrespective of whether or not the contracting organization had any specific involvement in or knowledge of those actions. Accordingly, we would strongly advise that you take immediate action to rectify the situations described in the manner outlined in our recommendations below.
To avoid the potentially serious criminal, civil, and financial consequences arising under MWHC's respondeat superior responsibility to prevent fraud and abuse in connection with its association with subsidiaries, it is hereby recommended that MWHC immediately:
1. Instruct the subsidiary to cease and desist from offering its contracted home health agency employees compensation of any kind in connection with client durable medical equipment (DME) orders from…
Reid, T. (2009). The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care. New York: Penguin Group.
USDHHS. (2004). U.S. Department of Health and Human Services-Office of Inspector
General-Statement of Organization, Functions -- and Delegations of Authority.
Federal Register. Vol. 69, No. 127; July 2, 2004. Retrieved November 14, 2010,
However, the woman will have to get the promise in writing. Furthermore, the woman's remedy would not be to force the man to marry her, but to receive compensation for the monetary damages that she suffered as a result of the move.
hile the English Act for the Prevention of Frauds and Perjuries covered the type of agreement just described, it also covered other types of promises made in contemplation of marriage. Perhaps one of the most common of those scenarios was when a woman would allege that a man promised to marry her if they engaged in certain sexual activities. A man who made such a promise might later deny it.
The final type of contract involves those contracts that cannot be completed in less than a year. An example of that type of contract is a contract for a two-year gym membership. A typical contract would provide a…
Huey, Nathan A. "Email and Iowa's Statute of Frauds: Do E-Sign and UETA Really Matter?"
Iowa Law Review 88 (2003): 681-704.
National White Collar Crime Center and the Federal Bureau of Investigations. "IC3 2003
Internet Fraud Report." Internet Crime Complaint Center. 2004. Internet Crime
Statute of Limitations for Fraud
This refers to the maximum time legal action may be brought against someone for the commission of a fraud.
This Statute depends on the jurisdiction. Most federal crimes in general have up to 5 years to prosecute. Capital offenses, however, have no Statutes of limitation. Federal frauds carry 10 years Statutes of limitation. These include frauds committed against banks and financial institutions and involving passports or citizenship. Major frauds in the U.S. carry a seven-year limit. Tax frauds have a 6-year limit.
Legal action is usually begun upon the commission or discovery of the fraud.
Alaska, Kentucky and Missouri observe a 10-year limit for fraud. Limit for Alabama is only 2 years and Louisiana, only 1 year after the commission of the fraud.
Like murder and other crimes, fraud can overwhelm a victim's whole life.
Fraud is thus governed by this Statute of Limitations.
3 Taylor Klett, the Statute of Frauds, Chapter 15 (Sam Houston State University, 2006)
Uniform Commercial Code, Article 2 2-201 LII (2004)
Maurice Sellbinder, Criminal Fraud and Statute of Limitations (2013),
EU's Current Anti-Fraud Strategy
For some time now, the issue of fraud and corruption in public service has been an issue of concern. This has forced many organizations to establish strategies aimed at detecting and minimizing the occurrence of such fraudulent activities in areas under their jurisdiction. This paper discusses the strategic management concepts in the risk-based policing strategy coupled with the principles and importance involved in the enhancement of organisational performance. Complementary factors and organisational culture are components that facilitate and militate against strategic fraud and corruption. The paper established alternative and successful strategies dependent on the factors of willingness of groups and individuals and ways of accepting them. In turn, this is dependent on the people seeking change and an understanding of the organisation's culture. The following study identifies the strengths and weaknesses of the European Anti-fraud Office (OLAF) as a strategy used by the European Union in…
Barr, D., (2010). Fraud and error: The Future. Department for Work and Pensions
Brooks, G., Aleem, A., & Button, M., (2013). Fraud, Corruption and Sport. New York: Palgrave Macmillan.
Button, M., & Gee, J. (2013). Countering Fraud for Competitive Advantage: The Professional Approach to Reducing the Last Great Hidden Cost. New York: John Wiley & Sons.
Collier, P. (2005). Management Accounting-Risk and Control Strategy. New York: Elsevier.
Tesco’s Fraud in the Accounting Information System
The Accounting Information Systems (AIS) plays a central part in the business computing structure of any organization. AIS deals with the classification, collection, storage, monitoring, and conversion of the company’s data into information utilized for internal control and reporting (Smith, 2016). Once an organization adopts an Accounting Information System, they can keep accurate records, and manage the assets of the organizations properly. The management utilizes AIS to guarantee that there are suitable access and separation of duty controls. With such restrictions, the administration can hold the employees responsible for their interaction with the system. This paper delves into how the components and functions of Tesco’s accounting information system contributed to the 2014 fraud scandal.
Tesco’s Fraud Scandal
Tesco is popular grocery retailer with its head office in Welwyn Garden City, Hertfordshire, U.K. (Colson, 2017). Globally, it is ranked at position nine regarding revenues…
The second article concerns another aspect of click fraud - the people who perpetrate it. One example is a man who attempted to blackmail online giant Google because he had developed a software program that could supposedly bilk them out of millions of dollars with fraudulent clicks on their GoogleAds Web sites. The author of this article notes, "Click fraud is perpetrated in both automated and human ways. The most common method is the use of online robots, or 'bots,' programmed to click on advertisers' links that are displayed on Web sites or listed in search queries" (Olsen 2004). The author notes that several of the largest Web sites, like Google and Yahoo, employ teams of "fraud squads" who actively look for illegal advertising activity such as click fraud, in an attempt to deal with the problem. However, since so many of the fraudulent activities are based in foreign countries,…
Greenberg, Andy. "Google Faces The Slickest Click Fraud Yet." Forbes.com. http://www.forbes.com/2010/01/12/google-click-fraud-tech-security-trafficsolar.html .
Grow, Brian and Elgin, Ben. "Click Fraud: The Dark Side of Online Advertising." Business Week. 14-19.
Olsen, Stefanie. "Exposing Click Fraud." CNET News. http://news.cnet.com/Exposing-click-fraud/2100-1024_3-5273078.html .
This type of international fraud occurs due to a desire to develop a climate that allows investors to benefit from the comparative advantages of countries such as Mali and Senegal (Barney and Hunt). These countries generally compete against other African states in order to attract more investors and, when the resources are insufficient to convince these foreigners, state officials engage in frauds.
4. Impact on International Business Setting
The increased levels of fraud generate a series of chain reactions upon the business setting within Senegal and Mali. First of all, they reduce general trust in the economic and political systems. This then means that foreign investors are not attracted to the region and that developmental opportunities are reduced. This in turn materializes in the lack of new jobs. It means as such that the federal authorities are unable to cash in taxes from foreign investors conducting business operations within Senegal…
Altman, L.K., Broad, W.J., Global Trend: More Science, More Fraud, December 20, 2005
Barney (1986) and Hunt (1990), Resource-Based View of the Firm
Humphreys, M., Mohamed, H.A., Understanding Civil War -- Senegal and Mali
Peng, M.W., Wang, D.Y., Jiang, Y., An Institution-Based View of International Business Strategy: A Focus on Emerging Economies, Journal of International Business Studies, 2008
Internal Fraud Detection
Fraud can be detected by deliberate effort through internal control efforts or by coincidence or chance. When companies do not practice strong internal control, it leaves the door open for employees to misappropriate assets without being detected, except by chance. y the time fraud is detected by chance, it could have cost a company millions of dollars in misappropriated assets.
The first coincidence discovered by the magazine company was in the process of a new auditor in an effort to get to know his new company and their accounting codes taking invoices to a vice president responsible for approving payment on them. The very top invoice was a forged signature, and upon evaluation, more invoices were discovered to have contained forged signatures, which is what set up the investigation. According to (Global Economic Crime Survey), 13% of internal fraud is detected by accident, 27% reported fraud in…
Global Economic Crime Survey. Nov 2009. http://www.pwc.com/en_GX/gx/economic-crime-survey-2009.pdf . 18 Mar 2013.
Internal Controls and Fraud Proofing. 2013. article from http://www.aicpa.org/InterestAreas/ForensicAndValuation/...rnal%20Controls%20and%20Fraudproofing.aspx . 18 Mar 2013.
Asset misappropriation schemes are frauds in which the perpetrators use trickery or deceit in order to steal or misuse the resources within an organization. When asset misappropriation occurs the specific assets of the organization are taken directly for the benefit the specific person who is committing the fraud. People who are in a position to commit asset misappropriation related crimes cane be employees within an organization, vendors or customers of an organization, or it could also be people who are totally unrelated to the victim organization. A distinguishing element when it comes to asset misappropriation is the fact that the assets belonging to the organization are taken through deceitful or trickery means rather than through force. The actual act of asset theft concealment and conversion should all be present. Asset misappropriation is a major problem in organizations all over the world. esearch suggests that organizations loose almost 7% of their…
Albrecht, C., Kranacher, M., & Albrecht, S. (2010).Asset Misappropriation Research White Paper for the Institute of Fraud Prevention. Retrieved September 6, 2013 from http://www.theifp.org/research-grants/IFP-Whitepaper-5.pdf
Peltier-Rivest, D. (2011).Detecting Occupational Fraud in Canada. Retrieved September 6, 2013 from http://www.acfe.com/uploadedFiles/ACFE_Website/Content/documents/rttn-canadian.pdf
Coenen, T. (2012).Three Basic Fraud types. Retrieved September 6, 2013 from http://www.allbusiness.com/crime-law-enforcement-corrections/criminal-offenses/6635361-1.html
Barret, B. (2011).Different Types of Business Fraud. Retrieved September 6, 2013 from http://www.brighthub.com/office/finance/articles/123108.aspx
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…
Bertrand, V. (2009). Organizational Isomorphism and Corruption: An Empirical Research in Russia. Journal of Business Ethics, 89(1), 59-76.
Federal Bureau of Investigation. (2014). Rooting out health care fraud is central to the well-being of both our citizens and the overall economy. Retrieved April, 2014, from http://www.fbi.gov/about-us/investigate/white_collar/health-care-fraud
Mele, D. (2005). Ethical Education in Accounting: Integrating Rules, Values and Virtues. Journal of Business Ethics, 57(1), 97-109.
Panda, J.K. (2006). Accounting & Finance For Management. New Delhi: Sarup Book Publishers Pvt. Limited.
It can also be reasonably concluded that the implied representation induced Client to purchase the watch as he would not have paid $12,500.00 for a watch that was a fake. As the watch was not a real Beckham watch, but instead a cheap copy, Seller's representation that she had an Akers Silver Lady watch was a false representation about a material fact which induced Client to act in reliance thereon. Thus, the first and third elements of fraud are satisfied.
The second element of Seller's knowledge of the false representation will be more difficult to establish. Client will argue that this element is satisfied for a number of reasons. First, Client will contend that Seller had prior actual knowledge that the watch was not a real Beckham and will have to prove this through the evidence, such as testimony from her friends or relatives that she knew its actual value.…
internal control weaknesses that existed at MCI that contributed to the commission of accounting fraud
The internal control weaknesses that existed at MCI that contributed to the commissioning of the accounting fraud was related to the very fact that Pavlov had the ability and access that allowed him to manipulate the account receivable system. Since he helped in the creation of the account receivable process, he was very ware of the system's strength and weaknesses as well as how to exploit them by manipulating the system (Lyon & Tocco,2007).He was therefore able to fraudulently receive payments, update as well as manipulate the account receivable records. This allowed him an opportunity of defrauding the firm and its clients by embezzling the funds to offshore accounts.
The exact fraudulent practices and tricks that Pavlo and his co-conspirators engaged in included the following:
The identification of the account receivables that were about to…
Carpenter, T., Durtschi.,C and Gaynor., LM (2002).The Role of Experience in Professional Skepticism, Knowledge Acquisition, and Fraud Detection
Fullerton, Rosemary and Durtschi, Cindy (2004).The Effect of Professional Skepticism on the Fraud Detection Skills of Internal Auditors (11 November 2004)., . Available at SSRN: http://ssrn.com/abstract=617062 or doi:10.2139/ssrn.617062
Kranacher, M.,Riley, R., Wells, JT., (2011).Forensic Accounting and Fraud Examination, 1st Edition.Association of Certified Fraud Examiners .
In the case of pill mills, participating physicians and pharmacists bill insurance companies or Medicare for prescription drugs, allowing participating beneficiaries to resell those drugs to criminal middlemen. The pharmacy then repurchases the drugs at a lower cost. According to the USGAO, any misuse of beneficiary identification information is a felony.
Criminals may also steal beneficiary information by creating drop boxes. The drop box scheme involves establishing a phony health care company in order to obtain insurance or Medicare payments. Like the drop box scheme, the pill mill scheme, and the rent-a-patient scheme, third-party billing also involves felony acts. Illegally obtaining beneficiary identification numbers, a criminal can use third-party billing agents to receive insurance payouts. The third-party billing company may not even be aware of the scheme. In other cases, the third-party billing company is a part of the scheme, defrauding by tacking on fraudulent claims to legitimate ones and…
Cornell University Law School. "Health Care Fraud." Retrieved Aug 7, 2008 from http://topics.law.cornell.edu/wex/healthcare_fraud
United States General Accounting Office (USGAO). "Health Care Fraud." Retrieved Aug 7, 2008 from http://188.8.131.52/search?q=cache:NcKXTYWPgDEJ:www.gao.gov/new.items/os00015t.pdf+health+care+fraud&hl=en&ct=clnk&cd=5&gl=us&client=firefox-a
He is serving a twenty-five-year sentence for his conviction.
The reason Ebbers was found guilty of criminal fraud, despite being in a business, is because his actions met the above referenced elements of fraud. For example, his filing of false statement was an intentional act that contained an untrue representation of an important fact: WorldCom's accounting. Further, this untrue statement was believed by the company's investors, or in this case, the victims. Further, the investors relied upon Ebbers' statement as being true and thus acted on it in terms of their investment decisions. Finally, as a result of the investor's reliance and action upon Ebbers' false statements, they lost a significant amount of money. Thus, because Ebbers' actions satisfy the elements for criminal fraud, it does not matter whether or not he was acting within a business capacity.
Associated Press (2005): "Former WorldCom Chief Signs Agreement Over Fraud Charges."…
Associated Press (2005): "Former WorldCom Chief Signs Agreement Over Fraud Charges."
Floyd, Nell Luter. (2006): "Ebbers Receives Prison Order." The Clarion-Ledger.
Moritz, Scott. (2003): "Judgment Day Coming Sooner for Ebbers." The Street. 27 Aug. 2003.
" hile there are factors like peer pressure and authority that come into play, some research claims to have isolated significant features of an individual's character that make them more likely to commit acts of fraud, bribery and falsification in the corporate context (27, 2009). For example, those people with "high levels of ambition were more likely to transgress moral codes, competitively stab colleagues in the back and make dubious decisions relating to asset-stripping, disinvestment, and so on" (27, 2009).
Trevino's (1986) work is relevant when it comes to understanding individuals and corruption. There are a couple questions regarding moral personality that come up: first of all, whether or not a person sees an event or issue as a moral problem; the second is how they decide to act in relation to that problem. Kohlberg's theory of cognitive moral development emphasizes the cognitive or reasoning aspect of moral-decision making (604,…
Bratsis, Peter. The Construction of Corruption, or Rules of Separation and Illusions of Purity in Bourgeois Societies. Social Texts, 21(4), 9-33.
Burke, Ronald J. & Cooper, Cary L. Research Companion to Corruption in Organizations
(New Horizons in Management). Edward Elgar Publishers, 2009.
Fleming, Peter. & Zyglodopoulos, Stelios C. Charting Corporate Corruption: Agency,
Enviromental Fraud: Virginia Beach Situation
Environmental Fraud: Virginia Beach Situation
ecently, issues related to global warming have been center-stage of various political debates. Debate has been centered to examine human influences to environment malfunctioning. Poorly treated environment poses a significant danger to the local community and the atmosphere. For this reason, the law has been configured to ensure that the environment is satisfactorily protected. Besides, states have been pursuing local policies, which are parallel to federal laws in relation to environmental protection. This report will assess the Virginia Beach city pollution. The report identifies Care A lot as a polluter and some of the EPA's regulations tackling the issue. The report will also identify two primary laws responding to Virginia Beach's environmental concerns.
In Virginia Beach, there has been evidence on the presence of fecal contamination, which is realized in the city's brackish waters. This contamination is a…
Belden R.S. (2001). Clean Air Act. Washington: American Bar Association
Byrnes A.E. (2001). Saving the Bay: People Working for the Future of the Chesapeake. Upper Saddle River, NJ: JHU Press
Swarup, R. Mishra, S.N. & Jauhari V.P. (1992). Environmental Pollution Ecology. Washington: Mittal Publications
U.S. Government Printing Office, (2009). Code of Federal Regulations, Volume 40, Issues 266-299. Washington: U.S. Government Printing Office
Identity theft and fraud of many types and forms are obviously a major inconvenience and hindrance to anyone that falls prey to a person that engages that crime. There are many variants and forms of fraud and identity theft out there. One of the more insidious and nasty examples of those crimes would be that which relates to healthcare. Indeed, to have people's wallet, healthcare and the taxpayer dollar on top of that all potentially compromised in one fail swoop is a very ominous and nefarious endeavor. Even so, it happens all of the time and to all sorts of people. egardless of the particular situation or scenario, any instances of fraud or abuse when it comes to healthcare insurance, healthcare providers and the services dispensed from all of the above are never a good thing. While healthcare is deemed to be a right to be extended without…
Badano, G. (2016). Still Special, Despite Everything: A Liberal Defense of the Value of Healthcare in the Face of the Social Determinants of Health. Social Theory &
Practice, 42(1), 183.
Budetti, P. P. (2015). New strategy, technology emerging in ongoing fight against healthcare
fraud. Modern Healthcare, 45(29), 25.
Enron was one of the biggest business collapses, and one of the most egregious incidents during a period in the early 2000s when investor faith in the securities system was shaken by a series of scandals. The scandals varied in terms of their composition, but behind each of them was greed, the drive by senior management teams to defraud securities regulators and investors for their own gain. This paper will look at the Enron fraud in particular. This was probably the worst, for the bald-faced contempt that Enron management showed to securities regulators, and the biggest, as Enron was one of the stars of the stock market during its ride up, and crashed to worthlessness almost instantly.
As with most cases of stock market fraud, the key players were the senior executives. At Enron, the key players were Kenneth Lay, Jeffrey Skilling, Andrew Fastow and the accounting…
Worldcom financial disaster provided many substantial learning points while helping expose the importance of accuracy and integrity in accounting procedures and standards. Eight years ago, when the true nature of the rise and fall of this telecommunications giant became public, many in the financial sectors of the world demonstrated shock and disbelief at the remarkable scope of corruption seemingly stemming from this agency. The purpose of this essay is to highlight worthwhile lessons of the Worldcom accounting scandal occurring at the early part of this century in an attempt to gain understanding of the temptations, consequences and regulations of the ever changing world of finance and its accounting procedures.
Understanding and defining fraud is helpful in understanding the events of the Worldcom situation. My personal definition of fraud states that fraud is an intentional act to deceive another in order to gain a competitive advantage over that targeted person or…
Anbinder, Tyler. Five Points: The Nineteenth-Century New York City Neighborhood. New York,
NY: Simon & Schuster.
This book is a general history of New York but provides an overview of the rampant electoral fraud characteristic of the nineteenth century in the city. The Five Points area was particularly notorious. It was an ethnic enclave of recent immigrants who proved to be particularly vulnerable to politicians who wished to use their influence to garner votes and exercise their political patronage. The book chronicles a number of attempts to rein in the voting fraud, as well as the riots associated with election during the Civil War period. Charges of so-called “importing” voters from outside the district were rampant (Anbinder 322). The fact that judgeships were also up for election made New York a ripe source of fraud, given the multiplicity of offices that could be contested, and it was said that no…
However, since Enormo refuses to consider the seriousness of Ultro's illegal actions, the accounting firm should immediately distance itself from the company, and refuse to perform the audit.
The accounting firm has two options: firstly, in the name of confidentiality, it could remain silent, and hope that no other firm would take Enormo's case, which would pressure Enormo to rectify the situation and reveal the actions of Ultro to the world. Unfortunately this seems unlikely, given Enormo's intransigence and the unscrupulousness of many accounting firms. If the firm does not reveal Ultro's actions, untold numbers of employees and investors might suffer after the scandal was revealed and Enormo's reputation resulted in financial devastation to the company and its subsidiaries.
Granted, there is a great temptation not to bring the case of Enormo to regulators, for fear of the accounting firm seeming like a 'tattle-tale' of its various clients' misdeeds. However,…
Computer Fraud and Abuse Act
A failed and flawed law
Technology has changed faster than the laws that exist to protect the public. Protecting information, particularly sensitive government information, was thought to be challenging and to pose additional dilemmas in terms of its regulation. With this in mind, Congress passed the Computer Fraud and Abuse Act in 1984. The CFAA "outlaws conduct that victimizes computer systems. It is a cyber-security law. It protects federal computers, bank computers, and computers connected to the Internet. It shields them from trespassing, threats, damage, espionage, and from being corruptly used as instruments of fraud" (Doyle 2014:1-2). The CFAA's provisions ban the trespassing of data; the damaging of or use of threats to damage data; or trafficking in the passwords and other sensitive data of a wide range of computers containing protected information (Doyle 2014:1-2).
The law was passed during the pre-Internet era "as a…
Computer Fraud And Abuse Act Reform. (2014). EFF. Retrieved from:
Doyle, C. (2014). Cybercrime: An overview of the Federal Computer Fraud and Abuse Statute and related federal criminal laws. Retrieved from:
Computer Fraud and Abuse Act
Information technology and related systems provide multiple benefits to business, government, and individual users. Databases, Internet transactions, and emails contain sensitive customers, employee and operations data that are extremely vulnerable. The following study focuses on various components of IT and related systems used for the storage of information like computers, servers, and website databases. Whilst identifying the ways the date can be compromised and exposed to abuse, the study identifies ways of protecting and enhancing their integrity.
Types of information systems that that hold data
Computers do their primary work in parts that are not visible when using them. To do this, a control center that converts data input to output must be present. All this functions are done by the central processing unit (CPU) a highly complicated set of electric circuits that intertwine to store and achieve program instructions. Most computers regardless of…
Adikesavan, T.A. (2014). Management Information Systems Best Practices and Applications in Business. New Delhi: PHI Learning Pvt. Ltd.
Bradley, T. (2006). Essential Computer Security: Everyone's Guide to Email, Internet, and Wireless Security: Everyone's Guide to Email, Internet, and Wireless Security. New York: Syngress
Khosrowpour M. (2006). Emerging Trends and Challenges in Information Technology Management: 2006 Information Resources Management Association International Conference, Washington, DC, USA, May 21-24, 2006 Volume 1. Washington: Idea Group Inc. (IGI)
Kim, D. & Solomon, M. (2010). Fundamentals of Information Systems Security. New York: Jones & Bartlett Learning
Enron Scandal's Fraud
One of the more salient examples of the corruption type known as fraud took place in the initial years of the 20th century. It involved the multiple conglomerate entity known as Enron, which primarily operated in the natural resources and energy vertical. Enron engaged in fraud in many different levels. Perhaps the most noticeable of these applied to its book-keeping practices. Enron relied on a host of fraudulent accounting activities to widen its profit margins and to hide its losses. Subsequently, the vast majority of people that competed with, invested in, and worked for this company thought it was much more financially viable than it actually was. Some of these accounting practices included an inflated usage of marked to market accounting, which the company had approved for one specific type of asset management and regularly deployed for others (and throughout its accounting areas in general) (Norris and…
Norris, Floyd and Eichenwald, Kurt. "Enron's Many Strands: The Accounting; Fuzzy Rules of Accounting and Enron." www.nytimes.com. 2002. Web. http://www.nytimes.com/2002/01/30/business/enron-s-many-strands-the-accounting-fuzzy-rules-of-accounting-and-enron.html
Watkins, Thayer. "The Rise and Fall of Enron." www.sjsu.edu / No Date. Web. http://www.sjsu.edu/faculty/watkins/enron.htm#OFFBALANCE
Statue of Frauds
illie has a very good case in regard to the burns he received when his automobile caught fire. The issues at hand are: the car broke within the same day of delivery so there was a breach of contract between illie and the dealer; same day car fire also opens the dealer up to the repercussions of illie's state lemon laws; the faulty engine that caught fire exposes the manufacturer of the automobile or engine if that party is a separate entity to the torts of products liability and the tort of negligence; the manufacturer of the actual part within the engine, if that party is different than the automobile or engine manufacture, are also responsible for the torts of product liability and negligence. Therefore, the defendants will be:
Dealer (breach of contract and lemon law)
Automobile Manufacturer (for engine and seatbelt)
Engine Manufacturer if separate from…
1A) in the 18th and 19th centuries, food adulteration was common, and usually done for profit. Expensive ingredients were commonly diluted with filler material to lower cost, but there were no controls on these fillers and many were unsafe. Some additives were added to extend the shelf life of food, but in several cases these additives were harmful to consumers -- common preservatives included borax, formaldehyde and sulfuric acid.
1B) The poison squad was a team that tried foods with common additives. They were to find out what the effects of those additives on the human body are.
1C) The video highlights what food scientists are doing now to adulterate food in ways to make it more addictive, if not more appealing. The scientists look for ways to add low-cost ingredients that in theory are more appealing to the human palate so that people will eat more. This…
Miscoding on the Billing Forms Discussion Board
The fundamental basis for auditing Medicare and Medicaid billing is that the services provided are confidential, patient privacy must be protected, and the written word of the provider is the record of service provision upon which a review must be initiated (Harris, 2007). Auditing, however, must extend beyond the written record to establish that the services were actually provided to the patient or client and that the services were rendered according to the conditions described in the provider's written record (Harris, 2007)
As the practice manager, I would remind the physician that every employee has a duty to cooperate and a duty of loyalty to the employer. And I would explain that these duties obligate employees to comply with reasonable directions from their employers during an internal investigation. The employee should be party to a conversation that an internal investigation may or may…
Harris, D. (2007). Contemporary issues in healthcare law and ethics (3rd ed.). Chicago: AUPHA/HAP
Murphy, A.P. And Vandenberg, Q.H. (2003). How to conduct a fraud investigation. Retrieved from http://www.mhtl.com/pdf/How%20To%20Conduct%20A%20Fraud%20Investigation.pdf
U.S. Department of Health and Human Services and U.S. Department of Justice. Stop Medicare fraud. Retrieved from http://www.stopmedicarefraud.gov/aboutfraud/index.html
UP FOR DISCUSSION NOW: Can you think of a reason why Dr. Jones might over rule his wife (Yikes!!) if she tells him not to buy the machine (which is the conclusion of the sample solution, and what 1/4 of you determined in your own papers)? What might be some of the benefits of having the machine, even with it losing money? (Think about all the DaVinci robots being bought now by competing hospitals...)