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Crime Solicitors

What is White collar fraud? (26 March 2012)

Date: 26/03/2012
Duncan Lewis, Crime Solicitors, What is White collar fraud?

Light-fingered staff in the workplace was at one time the main culprit, when it came to complaints businesses made about pens and A4 paper going missing. In recent years, thanks to the great advances in technology, theft in the workplace has reached new and unprecedented heights of sophistication and is proving positively catastrophic for many companies, especially those involved in the financial sector.

Senior management is in a particularly ideal position for committing fraud on a grand scale, having as they do access to confidential files and passwords and the associated computer systems, and accounting scandals have become especially newsworthy in recent years, with figures being fiddled on a sometimes-astronomical scale. Several multi-national companies have indeed been toppled by such instances of corporate greed by their own employees and management teams.

Office workers at every level, however, are becoming involved in so-called white collar fraud, and ordinary employees, who feel themselves driven by a variety of motives, including everything from sheer boredom and downright greed to harboured grudges against employers, now indulge themselves in the activity that has reached plague proportions in some sectors.

In the UK alone, white collar fraud is reckoned to be costing companies billions of pounds each year, and this is possible largely because of the lax nature of regulatory and financial controls. Anti-fraud precautions are available, but not many companies seem to be taking advantage of them to stop their internal rot.

A recent study carried out by Protivi, a risk management firm working with a top criminologist, has found that individual white collar staff have been responsible for fraudulently siphoning anything from a few thousand to many millions of pounds in recent years. Billions of pounds worth of fraudulently obtained funds have been recovered but because many white collar crimes of this nature pass unnoticed, there may be much larger sums actually involved.

Most companies take the decision to deal with their white collar criminals internally and so, many of the incidents go completely unreported. Fraudsters who were interviewed for the Protovi survey embezzled sums ranging from £65,000 minimum up to a maximum of £25 million.

Poor audit procedures and lax financial controls are the main reasons why so much money can apparently be so easily siphoned off. The reasons why fraudsters steal money in this way are as varied as the criminals themselves are and included initially paying off debts and then just carrying on with the stealing on a habitual basis after the debts were cleared.

Most offenders engaged in white collar fraud needed only the level of expertise they were used to during the workaday routine, according to the study, and most of those caught put it down simply to bad luck. Internal audit systems lack security to such a degree that most offenders are never caught and can easily hide their tracks, and although the technology is available to tighten things up, less than half of UK companies use it to any significant degree.

Get in touch with Duncan Lewis and other crime solicitors if you think your company may have been the victim of fraud.


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