Fraud Study Guide

* ACFE= Association of Certified Fraud Examiners; conducts comprehensive fraud studies; Report to the Nation on Occupational Fraud & Abuse * Fraud - deception that includes: a representation, about a material point, which is false, and intentionally or recklessly so, which is believed, and acted upon by the victim to the victim’s damage. Fraud is an act of dishonesty with the intention to deceive or cover the truth to gain an advantage. Most critical element: confidence. Fraud can be classified as (in terms of organization): against or on behalf of

* Occupational fraud - use of one’s occupation for personnel enrichment through deliberate misuse or misapplication of the employing org’s resources or assets. Categories: Asset misappropriation (steal asset), f.s fraud (manipulate f.s), Corruption scheme (misuse connections). * Employee embezzlement-can be: direct (e.g: asset misappropriation, making dummy company and making employer pay for goods not actually delivered) (from perpetrator to employer); or indirect (corruption, taking bribes from outside) (3rd party involved) * Management fraud- aka financial statement fraud; involves top management’s deceptive manipulation of f.s.; more inclusive * Investment scam-consumer fraud: Ponzi scheme, telemarketing, identity theft, money scam, advance fee scam, letter of credit fraud, etc. * Vendor fraud-overcharge, send inferior goods, charge for goods not shipped; * Customer fraud-not pay, shoplift; * Miscellaneous-other

* Prosecution: show that perpetrator acted with intent. Criminal-deals with offenses of a public nature/ against society as a whole. Prosecuted under a violated statute. Jail-time or pay fines. Burden of proof: beyond reasonable doubt. Purpose is to right a wrong. Jury must have 12 people. Initiation is determined by grand jury . Verdict is unanimous. Criminal if it involved: bribery, giving/receiving of anything of value by a subcontractor to a prime contractor