Corruption Eruption – Spotting Fraudsters Before It’s Too Late

Author: Chelsey Franks

Depending on where you look, corruption can be defined a couple of different ways: dishonest or illegal behavior especially by powerful people; and the abuse of entrusted power for private gain. The core issue remains the same – someone you should be able to trust proves otherwise.

In its comprehensive annual study on fraud, the Association of Certified Fraud Examiner’s 2018 Report to the Nations revealed that corruption was the most common fraud scheme in every global region. And within these schemes, 85% of the fraudsters exhibited at least one behavioral red flag, with 50% exhibiting multiple of these red flags.

The most commonly displayed behavioral clues continue to be living beyond one’s means and experiencing financial difficulty/pressure. This data has been remarkably consistent in every study done by the ACFE dating back to 2008. In corruption schemes in particular, 43% of the perpetrators were living beyond their means, while 23% were facing financial difficulty.

In light of this information, the next best question to ask is, how do I spot these red flags before I become a victim? In examining external business partners, executive candidates and vendor relationships, thorough background checking is an impactful next step. This type of investigative due diligence can identify bankruptcies, mortgage foreclosures, extensive property holdings, money owed in court and other evidence of stretched finances.

Take the simple first step in preventing a corruption eruption in your next big decision – reach out to Sterling Diligence (formerly Bishops®) today.