Meanwhile, Kroll’s Global Fraud Report 2008[2] found that the average major U.S. Company surveyed lost approximately $8.2 million to fraud within the previous three years, with 85 percent of the companies polled suffering from at least one fraud during that time frame.
That same year, the 2008 report to the Nation by the United States Certified Fraud Examiners Association estimated that the real cost to companies in terms of fraud and worker embezzlement is equivalent to 7 percent of the company in question’s annual revenue. These are astounding findings.
So-called “white-collar crime” is nothing new. The idea of white-collar crime was first discussed by researcher and author Edwin Sutherland during his address at the American Sociological Association Meeting in 1939. In his book, “White Collar Crime,” Sutherland explains that “…white collar crime may be defined approximately as a crime committed by a person of respectability and high social status in the course of his occupation.”[3]
More recently, in a report to the U.S. Department of Justice entitled “The Measurement of White-Collar Crime Using Uniform Crime Reporting (UCR) Data” revealed that from 1997 through 1999 white-collar crime accounted for nearly 4 percent of all incidents reported to the FBI, including such transgressions as computer crime, embezzlement, counterfeiting/forgery, insider trading, and other fraud offenses.
Regarding warning signs, a FindLaw.com article entitled “Embezzlement Warning Signs” reports that red flags are almost as numerous as the tactics, including: unbalanced accounts, unexplained losses, missing documents, altered checks, payments to false accounts, delayed bank deposits.
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[1] FINRA is a non-governmental regulatory body that handles the resolution of disputes between investors and stockbrokers and other financial firms. It was created in July 2007 as a successor to the National Association of Securities Dealers, to arbitrate stock broker fraud claims that can include charges of breach of contract, breach of fiduciary duty, negligence, misrepresentation, unauthorized trading and other claims that investments were improperly handled. [2] Kroll Fraud & Embezzlement Investigations; www.kroll.com [3] White Collar Crime, Edwin Sutherland, 1939 (p.9)