Identifying and Investigating Corporate Fraud

Corporate fraud can manifest in countless ways within an organization, and the mechanisms to deny, rationalize, and conceal these issues are equally varied. This complexity often allows internal fraud schemes to persist for years without detection.

Broadly, internal fraud encompasses asset misappropriation, corruption, and financial falsification within a business. Specific examples include embezzlement, skimming, kickbacks, and overbilling.

Concerns about corporate fraud often arise from red flags in financial statements or unexplained fluctuations in profits, revenue, expenses, or inventory. Many investigations are sparked by complaints from whistleblowers, including current or former employees, customers, or suppliers.

Other warning signs of potential fraud include:
 

• Requests to send vendor payments to new beneficiaries or foreign accounts

• Large purchase orders from unfamiliar vendors

• Customer complaints of overbilling or duplicate invoices

• Lack of competitive bidding for significant supplier contracts.

• Employees who consolidate or refuse to delegate responsibilities related to invoice review, approval, and payment.

• Altered accounting entries, missing documents, or failure to produce financial records

• Employees or executives who appear to be living beyond their means.

 

Today’s business leaders must also navigate a complex environment of external threats. Financial fraud schemes and criminal exploits against corporations are continually evolving. Fraud can be committed by suppliers (through bid-rigging, price-fixing, and procurement fraud), competitors (through theft of trade secrets and intellectual property), corporate debtors (through bankruptcy fraud), foreign intelligence services (through economic espionage), and criminals (through ransomware, extortion, check fraud, payment scams, etc.).

The investigators at Axis Consulting & Investigations Asia have worked on behalf of companies and outside counsel to uncover some of the largest and most complex corporate frauds over the past two decades. Their work includes investigating cross-border violations of the Foreign Corrupt Practices Act (FCPA) and multi-billion-dollar investment frauds.