The purpose of this paper is to explore the role of the culpable insider and the predatory criminal in fraud and deception.
Two groupings of fraud are considered in this paper. Insider fraud consists of a person within an organization misusing their position for corrupt self-dealing, asset misappropriation and financial statement fraud. Case studies are discussed, offering differing perspectives on the role of insiders. Fraudsters use technology, like malware, to take on the mantle of an insider to facilitate their larceny. This paper also looks at the role of the insider with predatory frauds.
Most enterprises, be they public entities or private firms, are at risk of internal fraud. Internal financial controls are the first line of defence. In tougher economic times, when enterprises run on the tightest of margins, control mechanisms are at risk of being weakened at the altar of efficiency. Firms can also adopt cultures that deter frauds, either through policies on whistle-blowers or through simple employee screening procedures. For predatory frauds, the basic warning flag can be summed up with the cliché: if something seems too good to be true, it probably is.
This paper synthesizes research on fraud and the role that an insider can play as well as the role of a predatory fraudster.
The views expressed in this paper are the personal views of the author and do not represent the views of the Government of Ontario. Jeff Simser (firstname.lastname@example.org) is co-author of Civil Asset Forfeiture in Canada (Toronto: Canada Law Book, 2012).
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