At least 58% of Occupational Fraud Case Not Reported To Law Enforcement

Occupational fraud is synonymous with corruption, embezzlement, and misuse of corporate assets has caused a lot of losses. Based on the report The 2018 Report to the Nations on Occupational Fraud and Abuse, as many as 23% of cases cause the company to lose at least 1 million US dollars.

With the figures of these losses, what actions do fraud victim companies against the perpetrators who in fact are generally their employees?

Imposing sanctions in accordance with the law is required to provide a deterrent effect on the offender. However, in fact, based on the report as much as 65% of the respondents surveyed only impose disciplinary action in the form of termination of employment on employees who are proven to conduct fraud.

No wonder the company is reluctant to bring the case to the realm of law marked with criminal report occupational fraud tends to go down over the last few years. The report also states that between 58% -69% of cases of occupational fraud have never been reported to law enforcement.

There are many reasons companies are reluctant to bring cases to the realm of law, two of the most common are companies concerned about publications that can tarnish the company’s name and feel internal disciplinary action is enough to solve the problem.

It should also be noted that one-third of the perpetrators were not dismissed after being found guilty of fraud. In some cases, the company even gives only minor penalties to the perpetrator that gives employees an opportunity to resign (10%) or move them to another position or give probation (8%), while there are also perpetrators who are not subject to sanctions at all (6 %). There are many factors that companies consider in deciding on such disciplinary actions, some of which are expressions of regret, the number of perpetrators involved, and the consideration of asset recovery.

This is certainly a challenge for companies in recruiting employees. Companies should be more careful in conducting background checks in the recruitment process because of the absence of criminal records. Also do educational verification, reference check, and credit check.

Source:

https://s3-us-west-2.amazonaws.com/acfepublic/2018-report-to-the-nations.pdf