August 24, 2012 - Palm Beach County Justice Association Luncheon Sponsor, Bear Lakes Country Club

October 27, 2012 - Palm Beach County Bar Association 4th Annual Family Picnic, Dreher Park, West Palm Beach

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You have probably heard that the best defense is a good offense. That is true in many sports, and it is true in fraud prevention, as well. You cannot protect your business from fraud if you don't know what fraud "looks like." Fraud occurs in Florida and every other state in the nation. Although the specific details vary from one industry to the next and from one business to another, there are significant commonalities among fraudsters that you need to know in order to spot signs of potential fraud before it destroys your business and your reputation.  

For example, according to the Association of Certified Fraud Examiners 2010 Report to the Nations, gender makes a difference. In every reporting region, males perpetrated occupational fraud more frequently than females - 57.2% of occupational fraud committed by males and 42.8% by females. And although the frequency of fraud by male and female perpetrators is the same in the position of employee, the rate of fraud by males is "higher" than that of females in the position of manager and "much higher" for owners/executives. Males trump females in the amount of financial loss of fraud, too, with male-perpetrated fraud averaging $232,000 per scheme and female-perpetrated fraud averaging $100,000. Does this mean that you should be suspicious of every male employee and officer in your business?

Fraud can happen at any level in any department of any business, and it does -- every day. When it comes to protecting your business from fraud, you are your own first line of defense. You need to be aware of the departments that most commonly house fraudsters and the schemes that are most commonly perpetrated within those departments. Arming yourself with this insight will help prepare you to recognize early warning signs of fraud.

According to the Association of Certified Fraud Examiners 2010 Report to the Nations, more than 80% of the fraud reported in the study was committed by individuals in six departments: accounting, operations, sales, executive/upper management, customer service and purchasing.¹ The frauds in these six departments accounted for 95% of all fraud loss reported in the 2010 study.