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A World-Class News Release

Hey all you P.R. folks, learn from this guy!

August 19, 2014 By Denny Hatch
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As writer of five columns a week, my inbox is a veritable cascade of news releases.

Sometimes there are 50 a day or more.

A good 90 percent of them are unreadable.

The second image in the media player at right is typical of the crap people send me—gray walls of type.

A couple of weeks ago, a subject line popped out of the morass:

Infographic: Who is a fraud perpetrator?

What followed was an email release—perfect in every way:

Scott Patterson

To Denny Hatch
Today at 1:03
PM

Dear Mr. Hatch:
What are some of the characteristics of a fraudster? That is, who are the people who commit occupational fraud, stealing from their employer or clients? The Association of Certified Fraud Examiners (ACFE) has fascinating research on this subject, and our infographic is available for your use online. Just download it here: www.acfe.com/rttn-profile-fraudster.aspx.

A few details about fraud perpetrators:

The higher the perpetrator's level of authority, the greater fraud losses tend to be. Owners/executives only accounted for 19% of all cases, but they caused a median loss of $500,000. Employees, conversely, committed 42% of occupational frauds but only caused a median loss of $75,000. Managers ranked in the middle, committing 36% of frauds with a median loss of $130,000.

Collusion helps employees evade independent checks and other anti-fraud controls, enabling them to steal larger amounts. The median loss in a fraud committed by a single person was $80,000, but as the number of perpetrators increased, losses rose dramatically. In cases with two perpetrators the median loss was $200,000, for three perpetrators it was $355,000 and when four or more perpetrators were involved the median loss exceeded $500,000.

Approximately 77% of the frauds in our study were committed by individuals working in one of seven departments: accounting, operations, sales, executive/upper management, customer service, purchasing and finance.

The vast majority of occupational fraudsters are first-time offenders; only 5% had been convicted of a fraud-related offense prior to committing the crimes in our study. Furthermore, 82% of fraudsters had never previously been punished or terminated by an employer for fraud-related conduct. While background checks can be useful in screening out some bad applicants, they might not do a good job of predicting fraudulent behavior. Most fraudsters work for their employers for years before they begin to steal, so ongoing employee monitoring and an understanding of the risk factors and warning signs of fraud are much more likely to identify fraud than pre-employment screening.

 
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