Jim Gannon, a member of the Professional Security advisory board, speaks about fraud.
As an ex Thames Valley Police fraud investigator I was a member of a very small team even then way back in 1976, consisting of a detective sergeant and four detectives who did their best but just scratched the surface. I doubt if the TVP even have that many officers now and the fraud investigations must have
increased by 500 per cent. On average we dealt with three major frauds per year each with about 100 on file uninvestigated. As a rule of thumb anything under ล100k did not get looked at, but selection was usually based on the chance of conviction; that was why fraud detection rates were always so high. This of course was a tip of the proverbial iceberg even then as very few companies wanted to report internal fraud because of the embarrassment and suffered major losses in silence with offenders often receiving payoffs to get them out of the company. Not a lot has changed today if half of the stories published are true. In my time working for CSS I was approached by numerous companies to investigate fraud committed by managers and directors but the main thrust was always recovery and they rarely wanted to involve police in prosecutions. Those who did want prosecution were often disappointed by the lack of interest by police forces as it often involved time-consuming enquiries across half the country with less than 50 per cent chance of a successful prosecution. Charity organisations were frequent losers of large sums of money but
prosecution was the last thing on their minds as publicity could do nothing but harm their quest for further funds from the general public. If 25 per cent of the companies experiencing fraud decided to inform the police the crime figures would go off the chart. Company fraud has always been regarded as the white collar crime and it has often been viewed that if companies are stupid enough to allow it to happen then let them sort out their own mess. Over the past five years many companies are downsizing and cost cutting resulted in layers of management disappearing. They have disbanded audit teams, credit checkers and area management, many of whom were the deterrent factors in preventing fraud at the basic level, and often detecting it in the early days. Costly stock checking, PI counting and computer stock analysis has been done away with, all opening up avenues for the would-be raudster. I can remember the days when petty cash claims were scrutinised to the decimal point whilst these days they probably don?t receive a second glance. Let?s face it, fraud is rife everywhere but the person ending up paying for it ultimately turns out to be the consumer having to pay higher prices from insurance to houses. Companies are no longer prepared to buy insurance policies by employing staff to detect fraud internally before it does real damage to framework of the company. They wait for it to happen but by then it?s often too late and this will probably never change whilst we exist in the current financial climate.
