3. Profile Contacts Achievements Graphology Graphotherapy Personal Analysis Employment Screening White collar crime Compatibility

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6. WELCOME TO THE WORLD OF GRAPHOLOGY next

7. Graphology as defined by the oxford English dictionary means ‘the study of handwriting’. Graph would imply handwriting and logy comes from ‘logos’ meaning ‘study of’. Handwriting analysis was used by the Chinese more than 2000 years ago to analyze their calligraphic writing. The French and Germans made a major contribution to the science of graphology. Presently, there are two schools of thought namely the French method and the German gestalt method. The French method concentrates on individual points, whereas the German method looks at handwriting as a whole and believes that the whole is more important than the parts. Handwriting is also known as ‘brain writing’ by certain graphologists. This is because the function of writing is a Neuro-physiological movement. The brain sends a command to the motor cells to move the muscle of our hand and thereby start writing. Research studies have proved that handwriting of a person is same whether he writes with his left or right hand or is ambidextrous. People who have their amputated and learn to write holding the pen in their mouth or feet show similar handwriting traits as they did prior to amputation. Therefore, the term ‘brain writing’. next

22. Definition of White Collar Crime According to Sutherland, white-collar crime is a crime is different from street crime in many ways. It is committed by those of high status and power, it often involves a violation by a trusted person in professions such as medicine, law, accounting, banking, and business, and it is committed by individuals who do not see themselves as criminals. White-collar crime is perpetrated by large as opposed to small businesses, and the general assumption is that prosecutors and judges are more lenient on white-collar as opposed to street level criminals. Sutherland defines white collar crime as crimes committed by persons of respectability and high social status. FBI (1989) defines WCC as “"...as those illegal acts which are characterized by deceit, concealment, or violation of trust and which are not dependent upon the application or threat of physical force or violence ” back next

23. Differentiating between WCC offender and any other offender as the rule book may suggest Thus, the only way that one crime differs from another, "...is the backgrounds and characteristics of its perpetrators; the poor and disreputable fodder routinely encountered in police stations and in studies of street crime are seldom in evidence here. Most if not all white-collar offenders by contrast are distinguished by lives of privilege, much of it with origins in class inequality." But, equally, crime has become a normalized risk of postmodern life and the identity of criminal offenders is less relevant. (Shover and Wright 2000) Difference in class / educational background / position / reputation Again a crime is a crime – getting this is very important Because of shifts in the socialization process, crime is associated with less guilt, the distinction between moral and immoral has weakened. Criminals are just doing what everyone else is doing (Lea: 2001). – Social acceptability back next

24. Differential treatment for white-collar offenders The empirical data clearly demonstrate a double standard between white-collar crimes and so-called street crimes. There are a number of reasons to explain why white-collar criminals are not more rigorously pursued. By virtue of their relative affluence, those accused as white-collar offenders are able to afford the fees of the best lawyers, and may have friends among senior ranks of the political elite (see Cronyism), the judiciary and the law enforcement agencies. These connections often not only ensure favourable treatment on an individual basis, but also enable laws to be drafted or resource allocations to be shifted to ensure that such crimes are not defined or enforced too strictly. It is a fact that virtually no police effort goes into fighting white-collar crime, and the enforcement of many corporate crimes is put into the hands of government agencies like the Environmental Protection Agency which can act only as watchdogs and point the finger when an abuse is discovered . back next

25. This more benign treatment is possible because the true cost of white-collar crime, while high in nationally consolidated accounts, is diffused through the bank balances of millions either by way of share value reductions, or nominal increases in taxation, or increases in the cost of insurance. And because it can be difficult to assign blame, e.g. Environmental damage may be serious but corporations cannot be sent to jail and, if those senior officers are removed from their positions, it may be more damaging to the organization itself which employs many ordinary and innocent people, and to the shareholders who had no role to play in taking criminal decision. Different public policies are at work and there are differences in the level of public interest, case complexity, and a lack of white-collar related literature, all of which has a significant effect on the way white-collar offenders are sentenced, punished, and perceived by the public. back next

26. Another reason for differential treatment might be the fact that criminal penalties tend to be more related to the degree of physical force or violence involved than to the amount of monetary loss, all other things being equal. Because white-collar crimes are committed by those with opportunities that do not require violence, they are far less likely to garner more severe criminal penalties. For example, someone who mugs a victim on the street by threatening to knife them, and steals their wallet, might very likely be punished with a more severe sentence than an inside trader who cheats shareholders out of a million dollars. back next

27. The term "white-collar crime" was reportedly coined in 1939 by Professor Edwin Sutherland and has since become synonymous with the full range of frauds committed by business and government professionals. Today's con artists are more savvy and sophisticated than ever, engineering everything from slick online scams to complex stock and health care frauds. Here you can learn about the many white-collar crimes we investigate, how to protect yourself from common scams, and what to do if you think you've been victimized. back next

28. Prevention is better than cure Johnson and Leo's "The Yale White-Collar Crime Project: A Review and Critique" (vol. II, p. 63) offers an excellent conceptualization of white-collar crime. They suggest a fourfold typology premised upon the focus and scope of the crime. Some scholars classify white-collar crime based upon the individual who commits the crime or the type of offense committed versus whether the crime is harmful (mala in se) or merely a legal wrong (mala prohibita). For example, Sutherland classified white-collar crime based upon the offender and the harmfulness of the offense, but others have looked to the offense, describing white-collar crime as including fraud, embezzlement, and tax evasion, while still others classify the crime as harmless whether perpetuated by a specific offender or precipitated by a specific offense. back next

29. Braithwaite's "Crime and the Average American (vol. II, p. 3) reviews some of the literature on white-collar crime and lists securities fraud, antitrust, bribery, bank embezzlement, postal and wire fraud, fraud claims and statements, credit and lending institution fraud, and tax fraud as the basic eight forms of white-collar crime. Based upon this classification and reporting data of seven district courts. back next

30. Motivation White-collar crime is not motivated solely by financial gain. Examinations of the motives and reasons for committing white-collar crime also report interesting results. Stotland's "White-collar Criminals" (vol. II, p. 21) lists desire for money, threat of loss, sense of superiority, ego, power, group forces, and benefits to the victim as motives for white-collar crime. Benson and Moore's "Are White-Collar and Common Offenders the Same?" (vol. I, p. 496) lists three paths to white-collar crime: Those with low self control who commit crime when the opportunity arises, those who do it for ego gratification, and those who commit crimes depending on personal situations in their lives. Levi's "Motivations and Criminal Careers of Long-Firm Fraudsters" (vol. I, p. 307 sees fraudsters as those who either plan their activity or those who slide into it. back next

31. White-collar crime is not always a calculated activity. For many who commit fraud, they do not have any prior convictions and they do not plan to commit fraud. Only a few offenders fit into a habitual and calculating category of white-collar criminals who view crime as a cost/benefit calculation in classic Benthamite terms. This suggests that many white-collar criminals would not be deterred by changes in sentencing policy, thus challenging a myth that this is the type of calculative crime that punishments would be considered in the process of contemplating the crime. Along with this revelation, Geis' "Denying the Guilty Mind: Accounting for Involvement in White-Collar Crime" (vol. I, p. 355) suggest that white-collar criminals do not view their actions as criminal and themselves as criminals and that the reasons for committing the crime were to further the best interests of the company. Hence, changing the punishment does not appear to be a factor influencing deterrence. In fact, the Weisburd, Waring, and Chayet "Specific Deterrence in A Sample of Offenders Convicted of White-Collar Crimes (vol. I, p. 587) note that prison sentences did not appear to have an impact upon deterring white-collar crime. back next

32. More surprisingly, the sentencing and punishment of white-collar crime defies stereotypes. Shapiro's "The Road Not Taken: The Elusive Path to Criminal prosecution for White-Collar Offenders"(vol. II, p. 253) examines SEC prosecution and finds that while only 6% of stock swindlers appear before a criminal court, but given the option of administrative and civil action, a very high percentage of these individuals are subjected to some type of punishment. Hagan and Palloni's "Club Fed and the Sentencing of White-Collar Offenders Before and After Watergate (vol. II, p. 305) finds that after Watergate white-collar criminals were more likely to face prison but the amount of time incarcerated was less than before Watergate. Other studies in the two volumes indicate strong public intolerance and disapproval towards white-collar crime and some evidence that white-collar crime causes street crime. Sutherland describes the illegalities committed corporations, arguing that the corporations share most of the characteristics of professional thieves: their offenses are deliberate and organized, they are often recidivists, and they show disdain for law. back next

33. From offender to offense. Societal interest in white-collar crime grew rapidly in the 1970s, rivaling the attention street crime had received in the preceding decade. Prosecutors gave it higher priority than in the past. Targets of investigation included individual businessmen, corrupt politicians, and such corporate activities as international business bribery, the manufacture of dangerous products, and environmental pollution. The renewed interest was motivated at least in part by the discovery of corruption and other illegal practices at the highest levels of government, and by a growing sensitivity to dangerous corporate practices. The growth in interest was great enough that it could be fairly labeled a social movement (Katz, 1980). When the pace of scholarship on white-collar crime also revived, it became evident that the wide range of phenomena suggested by the concept had to be broken down into components. Attention had focused so much on the nature of the offender that actual criminal behavior had gone unexamined. It seemed to make little sense to include under a single rubric as diverse a set of activities as bank embezzlement, land swindles, price- fixing, fraudulent loan applications, and bribery. The first important shift away from the legacy of Sutherland was accomplished by taking the offense itself as the principal object of inquiry. In the first such effort, Herbert Edelhertz proposed to define white-collar crime as "an illegal act or series of illegal acts committed by nonphysical means and by concealment and guile, to obtain money or property, to avoid payment or loss of money or property, or to obtain business or personal advantage" (p. 3). A related shift is to search for behavioral patterns that characterize different types of white-collar crime. Susan Shapiro, for example, distinguishes fraud, self-dealing, and regulatory offenses (pp. 20–24), and Mitchell Rothman separates frauds, takings, and collusion. back next

34. The impulse that gives rise to typological efforts is the felt need to put order into the enormous range of behaviors at issue. The statutes that define white-collar crime, passed by legislatures for various purposes at various times, are a patchwork. Important as they may be for prosecution, the legal categories are of limited value for analytic purposes. A given statutory offense may include a wide array of actual behaviors; bank embezzlement, for example, may range from a simple theft by a bank teller to a complex fraudulent loan arranged by a trust officer. Essentially the same behavior may be punished under statutes as different as those governing mail and wire fraud, securities fraud, and false claims and statements. Typologies allow one to see some of the similarities between crimes as different as bribery and price-fixing, which share the element of collusive activity. back next

35. The impulse that gives rise to typological efforts is the felt need to put order into the enormous range of behaviors at issue. The statutes that define white-collar crime, passed by legislatures for various purposes at various times, are a patchwork. Important as they may be for prosecution, the legal categories are of limited value for analytic purposes. A given statutory offense may include a wide array of actual behaviors; bank embezzlement, for example, may range from a simple theft by a bank teller to a complex fraudulent loan arranged by a trust officer. Essentially the same behavior may be punished under statutes as different as those governing mail and wire fraud, securities fraud, and false claims and statements. Typologies allow one to see some of the similarities between crimes as different as bribery and price-fixing, which share the element of collusive activity. back next

36. From offense to organization and consequence. A second trend is to emphasize not behavior but its consequences. This trend rediscovers issues that occupied reformers at the turn of the twentieth century—a concern for the power of organizationsand the harms they commit. From the late nineteenth century on, harms caused by the production and sale of adulterated goods and similar activities were recognized as "strict liability" offenses—criminal acts not requiring proof of a guilty mind. Throughout the twentieth century these activities, and many others later recognized to pose a similar threat, came increasingly to be the subject of administrative regulation, which was seen as a wiser and more effective device for protecting the public interest. Regulation expanded as new dangers to health and to life itself were recognized—dangers to individuals posed by the air they breathed, the water they drank, the food and drugs they consumed, the automobiles and other products they used, and the places at which they worked. back next

37. Rediscovery of the power of organizations to inflict physical damage as well as economic injury has led some scholars to direct their attention to specifically organizational offenses. The central concern here is those actions taken by the officials or other agents of legitimate organizations that have a serious physical or economic impact on employees, consumers, or the general public (Schrager and Short). A growing number of analysts thus speak of organizations as offenders of "organizational deviance," and of illegalities committed through the organizational form. This is a response to a society in which organizations increasingly are major actors, and although it reflects experience in the United States, both the concept of white-collar crime and a concern with corporate and governmental offenses are found throughout the world. back next

38. Measuring white collar crime – legal issue The focus on organizational offenses brings with it enduring issues of law and policy. One is the question of the standard by which individual conduct is to be judged. Should organizations' executives be sanctioned for failure to supervise middle-level officials engaged in wrongdoing? Should strict liability be employed, as in some of the earlier public-welfare offenses? How should sanctions be distributed between organization and employees? When the focus is on the corporate body itself, there is the question of how best to protect against harmful corporate practices without stifling organizational innovation and creativity. For example, should unwanted conduct be deterred through increased penalties against the corporation? Or is it more effective to control wrongdoing by reaching inside the organization, either through rules governing production processes and information flow, or rules regarding the composition of the board of directors? back next

39. Finally, there is the issue that sparked the original debate over the concept of white-collar crime: Are these offenses administrative rule violations or "real" crimes? The most complete follow-up study to White Collar Crime defines its subject as any act, committed by a corporation, that is punishable by the state, whether through criminal, administrative, or civil law. The title of this study, Corporate Crime, while reflecting the shift to the corporate form as a primary focus of inquiry, maintains the view that such conduct be labeled criminal (Clinard and Yeager, p. 16). The corporate sanctions examined, however, are overwhelmingly civil or administrative. Thus, the matter of definition remains controversial some forty years after Sutherland's initial exploration of white-collar crime. back next

40. For more than three decades, rational-choice theory has reigned as the dominant approach both for interpreting crime and as underpinning for crime-control programs. Although it has been applied to an array of street crimes, white-collar crime and those who commit it have thus far received less attention. Choosing White-Collar Crime is a systematic application of rational-choice theory to problems of explaining and controlling white-collar crime. It distinguishes ordinary and upperworld white-collar crime and presents reasons theoretically for believing that both have increased substantially in recent decades. back next

41. Breach of trust Fukuyama (1996) argues that modern economic life entails a minimum level of trust, where trust is defined as: The expectation that arises within a community of regular, honest and co-operative behavior, Based on commonly shared norms, on the part of other members of that community (Fukuyama: 1996: 26) Trust involves placing faith in a person or institution where something serious is at stake if such reliance turns out to be misplaced (Nelken: 1994: 4). Trust necessarily contains an element of risk and uncertainty, since in conditions of absolute certainty there is no need for trust at all. White-collar law violations are those violations of law to which penalties are attached and that involve the use of a violator's position of significant power, influence or trust in the legitimate economic or political institutional order for the purpose of illegal gain, or to commit an illegal act for personal or organizational gain. (Reiss & Biderman: 1980: 4) back next

42. Criminal within the organization Shapiro (1990) argues that a plethora of trust relationships exist in western society, and opportunities for abuse can arise largely due to the asymmetrical and unbalanced nature of these relationships. For example, agents might hold information which cannot be easily accessed by those individuals who vest their trust in them, and individuals may also have little control over the selection or incentives of agents. back next

43. Some researchers have also examined the costs generated by white-collar offences in terms of any potential distrust which they might induce. Sutherland (1949) was the first writer to suggest that white-collar crime might create distrust in society, thus: This financial loss from white-collar crime, great as it is, is less important than the damage to social relations. White-collar crimes violate trust and therefore create distrust; this lowers social morale and produces social disorganization. Many of the white-collar crimes attack the fundamental principles of the American institutions. Ordinary crimes, on the other hand, produce little effect on social institutions or social organization. (Sutherland: 1949: 13) back next

44. Other writers have pursued this theme through looking at the impact of white-collar crime upon victims' trust in the wider political and economic arenas (Peters & Welch, 1980; Moore & Mills, 1990; Shover et al. 1994). The general finding in these studies is that white-collar crime has little, if any, effect upon victims' trust. However, it seems that these studies fail to recognize that trust involves an element of risk and uncertainty. As such, an experience of Victimization may simply re-affirm individuals' understandings that when using 'expert systems of knowledge' (Giddens: 1990) they are taking risks. As such, in the aftermath of a crime, individuals may continue to display a generalized systemic trust. back next

45. Repeat offenders We should stress here that these white-collar criminals evidence prior criminality to a much greater extent than most practitioners and scholars would have expected….Indeed as a group they are approximately twice as likely to have an arrest record as is the national population. (Weisburd and Waring, 2001) Moreover, more than 40% of the offenders in this study had prior arrest records and 35% had prior convictions, dispelling thenotion that white-collar criminals are not habitual offenders. Finally, Sutton and Wild's "Small Business: White-collar Villains or Victim's (vol. I, p. 151) challenges the Sutherland notion that white-collar crime is a disease of large businesses, finding that many medium sizes firms, partnerships, and single owner proprietors commit white-collar crime. back next

46. Stereotypes Sutherland’s theory looks at the stereotypes of the society tough guy bad father impoverished childhood wrong side of the town the investigator notes as well that “[w]hite collar crime . . . Cannot automatically be assumed to be the preserve of the rich and powerful. Employees at all levels of the occupational hierarchy have many opportunities to abuse their occupational roles, and both large and small businesses can indulge in many dangerous and deceitful practices” (Croall, 1992:56). Recall, however, that those who employ criminal-based definitions of white-collar crime generally do so with full intent of restricting its meaning to crime committed by the “rich and powerful.” back next

47. Repeat offenders We should stress here that these white-collar criminals evidence prior criminality to a much greater extent than most practitioners and scholars would have expected….Indeed as a group they are approximately twice as likely to have an arrest record as is the national population. (Weisburd and Waring, 2001) Moreover, more than 40% of the offenders in this study had prior arrest records and 35% had prior convictions, dispelling thenotion that white-collar criminals are not habitual offenders. Finally, Sutton and Wild's "Small Business: White-collar Villains or Victim's (vol. I, p. 151) challenges the Sutherland notion that white-collar crime is a disease of large businesses, finding that many medium sizes firms, partnerships, and single owner proprietors commit white-collar crime. back next

48. Repeat offenders We should stress here that these white-collar criminals evidence prior criminality to a much greater extent than most practitioners and scholars would have expected….Indeed as a group they are approximately twice as likely to have an arrest record as is the national population. (Weisburd and Waring, 2001) Moreover, more than 40% of the offenders in this study had prior arrest records and 35% had prior convictions, dispelling thenotion that white-collar criminals are not habitual offenders. Finally, Sutton and Wild's "Small Business: White-collar Villains or Victim's (vol. I, p. 151) challenges the Sutherland notion that white-collar crime is a disease of large businesses, finding that many medium sizes firms, partnerships, and single owner proprietors commit white-collar crime. back next

49. Fraud is one of the most common forms of white-collar crime. Fraud is committed when misrepresentation or deception are used to secure unfair or unlawful gain. It occurs “when a person or business intentionally deceives another with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or misrepresented. Typically, victims give money but never receive what they paid for” The Association of Certified Fraud Examiners (2004) estimates that occupational fraud Against U.S. employers resulted in losses of $660 billion in 2004. back next

50. A general theory of crime recently proposed by Gottfredson and Hirschi: This theory predicts that white-collar offenders are (a) as criminally versatile and (b) as prone to deviance as common offenders. To assess the validity of these propositions, the authors investigate the criminal records of white-collar and common offenders and their respective levels of participation in deviant activities. As the general theory predicts, some white-collar offenders are involved in crime and deviance to much the same degree as typical street criminals. A large majority differ significantly from street criminals in these regards, contradicting the theory and limiting its generality. The authors argue that the theory's rejection of motives as important causal forces is misguided and that a more complex causal structure is needed to account for patterns of white-collar offending. back next

51. 'Procedures aid white collar crime ' The rising incidence of white-collar crime is largely due to the discrepancies in the functioning of governmental, regulatory and institutional bodies. “ Unbridled greed among people and the carelessness on part of the authorities during the verification of credentials of investment companies are other factors contributing to most economic offences,” Phansalkar said. Phansalkar said that almost 44 per cent of frauds and financial crimes took place in the banking sector. “A recent study done by a CID official, involving 65,800 branches of 295 scheduled banks in the state, revealed as many as 3,072 frauds,” he added. Explaining the phenomenon, Phansalkar said bank managers failed to take adequate precautions in the scramble to meet deposit mobilization targets. “They don’t check from where the money comes, whether it is black or white and whether the depositor has any criminal background,” he observed. back next

52. Modern day crimes are committed online The office space is getting paperless The offender holds a position of trust in the organization The offender is known to the org or individual and therefore is at an advantage The offender has access to people as well as sensitive data Anonymity that an online crime offers, the cyberspace is a more lucrative realm of committing such crimes Fear of recognition and rebuke is low back next

53. THE NATURE OF WORKPLACE FRAUD Workplace fraud possesses a number of characteristics that render it easier to commit than ordinary crime and significantly harder to detect. We must clearly understand these factors when determining any form of effective strategy for fraud control in the public or private sector workplace. back next

54. Some important characteristics are: • That the property able to be stolen, whether it be money or things of value is already in the hands of those who may be tempted to take it. The physical act of gaining possession of the property, as in the case of shoplifting, is already complete. With the more traditional forms of theft such as shoplifting, robbery and the like, the would-be criminal faces the initial problem of actually getting their hands on the goods. In the workplace, goods are readily accessible and available and provide a real and immediate temptation. Access to those goods may be continuous and therefore opportunities for dishonesty are correspondingly continuous. Employees can't be watched 24 hours of the day. Accordingly the workplace provides ready access and continual temptation. • Staff is likely to have an intimate knowledge of the property, its disposition, official procedures and the checks that exist. They are within the system and accordingly have an increased ability to plan any dishonesty so that it can be efficiently accomplished and remain undetected. Like corruption, workplace fraud is often repeated and can lead to massive losses over time. back next

55. • Fraud within business may easily be indirect and for that reason very difficult to detect. Whilst it is relatively easy to check whether someone has pinched all the stock, there are many other types of fraud that can cause much loss. Discretionary decisions can be made to provide collateral benefits in ways that traditional auditing and supervision are quite unable to detect. For example a purchasing officer may purchase apparently adequate supplies from a company because that company may be his own, his brothers, or even operated by persons with whom he or she hopes to later gain employment. Nothing is being stolen but the employer will likely not be receiving the best deal because the purchase is being motivated by reasons other than the obtaining of the best deal. The Company loses money, the employee gains a benefit, and no one is the wiser. An employee charged with selling company property whether it is stock or plant may sell cheaply to a friend, or sell cheaply to a purchaser who traditionally gives free trips and indulgences at Christmas which are factored into the price. The myriad of other actions whereby a direct or indirect benefit is obtained at the expense of the employer is only limited by humanities somewhat fertile imagination. back next

56. • The custodians of company property are often not the owners of it and may accordingly have less interest in protecting it from loss. For all these reasons workplace fraud may be subtle, indirect and hard to detect, yet represent a serious threat to the financial integrity of the business. It is unavoidable that staff must be in positions of trust that grant them access to property and decision making processes capable of abuse. These are the crucial factors to understand when determining a strategy for fraud control. Keen attention to managing for fraud control, and developing a fraud resistant organizational structure and culture need cost no more than not doing so. Every workplace has to have some management, some structure, and some culture. as we all know, those things can develop well or badly, and it need cost no more to direct them down the right track. a great deal can be achieved by applying an awareness of the issues concerning and principles of fraud awareness to ordinary management decisions that would have to be made in any event. back next

57. Who Are you Really Hiring? According to the Association of Certified Fraud Examiners……. 30% - 50% of resumes contain misrepresentations or lies 93% of workplace fraud offenders have no criminal record The average fraud schemes exceed $125K in losses Employee crime is common Employee theft can be costly back next

58. Despite an increased awareness among employers of risks associated with workplace fraud, a lack of action has left most exposed to significant Economic loss from fraud, according to a leading employment law specialist. According to Ms Tumpey, the group most likely to commit workplace fraud is mismanagement Employees, and the most common types of fraud are CV fraud (in which People misrepresent particular qualifications in order to secure a job) and timesheet Fraud, which occurs when employees claim overtime or hours they have not worked. Timesheet fraud is more prevalent in industries requiring shift work and irregular Working hours. A common sign of CV fraud is an employee clearly lacking assumed competencies, or not appearing to know what they are doing or talking about. Timesheet fraud is readily detected when on scrutiny of monthly pay figures, it becomes apparent that a particular employee is consistently claiming more overtime over a period of time than previously. back next

59. “ Employers have adequate legal remedies at their disposal if they detect fraud, the most common of which is instant dismissal in severe circumstances. However, it is extremely important that employers first investigate their suspicions and are satisfied These are well founded,” Ms Tumpey adds. “ For example, if CV fraud is suspected an employer can contact the institution with the employees consent and confirm someone’s qualifications. To counter suspect timesheet fraud, they have the right to implement camera surveillance to investigate when people are in fact clocking-on and clocking-off, providing that employees are informed they are under surveillance. back next

60. “ But employers need to continually assess their exposure to fraud as part of their risk Management strategy, to ensure the right balance between prevention, detection and Response,” Ms Tumpey concludes. Ms Tumpey advises employers to familiarize themselves with their legal rights and obligations should they become aware of fraud taking place in their organization by an employee. back next

61. The Fraud Triangle What motivates people to commit fraud? Criminologists have identified three elements that are often present when fraud occurs. These three elements form the “fraud triangle.” “ Opportunity” refers to the situations and circumstances that make it possible for fraud to take place. For example, an employee with uncontrolled access to company funds has the opportunity to misappropriate those funds. Opportunity is, generally, the element that a business can most effectively influence, impact, and control. An important action a business can take to reduce crime exposure is to assess the opportunity for fraud and respond accordingly. Responding to fraud risk includes development and use of effective internal controls to reduce, mitigate, or even eliminate opportunities for fraud back next

62. “ Pressure or incentive” helps explain why and when fraud occurs. Fraud takes place when fraud pressures or incentives outweigh, and ultimately Dr. Donald R. Cressey is generally credited with developing the concept of the fraud triangle, According to the 2005 Fraud Examiners Manual (Association of Certified Fraud Examiners)Overcome the pressures or incentives to act honestly. Thus, pressures or incentives can become the motivation to act fraudulently. Pressures and incentives to commit fraud are often associated with: ■ Lifestyle issues (living beyond one’s means). ■ Personal debt (e.g., excessive credit card use, gambling losses, use of drugs or alcohol) ■ Business results (e.g., poor operating results, desire to avoid business failure, meet requirements of lenders) back next

63. If a company can recognize when and where excessive pressure/incentives may be present, it can use that information in fraud prevention and detection efforts and take action to mitigate business-related pressures/incentives in order to reduce fraud risk. An effective fraud prevention program can increase pressures and incentives to act honestly by emphasizing a “perception of detection,” underscored by the company’s demonstrated, consistent commitment to taking appropriate and certain action once fraud is discovered. back next

64. “ Rationalization” refers to the need for people to somehow justify their fraudulent actions in their own minds. A person involved in a fraud attempts to psychologically accept his/her own actions and emotionally “shift the blame” to anyone or anything other than him/herself. Common rationalizations include: ■ Entitlement: “They don’t pay me what I’m worth. I have this money coming to me.” ■ Anger or revenge: “The Company has treated me poorly; now they’re going to pay.” ■ Minimization: “I’m not taking very much. The company can easily afford it.” ■ Moral justification: “Everyone else is doing it, so it must not be so bad to do this.” Rationalizations are not generally known to others and therefore are usually difficult to detect. In addition, persons with low moral integrity may feel little need to rationalize their behavior. back next

65. Key steps in developing a fraud prevention strategy should include: 1. Conducting a fraud risk assessment to identify areas of the business that are Most susceptible to employee fraud 2. Reviewing internal fraud control policies and procedures, HR policies, employee due diligence procedures and fraud awareness training for staff 3. Developing an anonymous colleague ‘whistleblower’ reporting system 4. Developing a program of routine fraud detection tests for key financial data 5. Developing a robust fraud incident management plan 6. Adopting appropriate policies and practice for the ethical conduct of your business. back next

66. FRAUD CONTROL IS AN INTEGRAL FUNCTION OF MANAGEMENT The KPMG survey also revealed that over 50 per cent of fraud against business was identified as being the result of poor internal controls. In simple terms, if you let people do the wrong thing then unfortunately there are proportions that will do the wrong thing? There are three important principles in managing fraud control: (i) Prevention is better than cure It is obviously desirable that fraud is prevented from the outset. Detecting instances of fraud and then punishing those detected tends to be costly and time consuming. Further, waiting for people to do the wrong thing and then punishing them is a confronting and disruptive procedure. If structures and cultures can be developed to ensure that people do the right thing from the outset then the fraud will not be suffered, the cost of punitive procedures is avoided and workplace morale is likely to be considerably better. back next

67. (ii) Fraud control is a management function Management is the chief controller of workplace behavior and its role in prevention of fraud should be central. If management doesn't do anything to control fraud then who else will? Specific focus on fraud control is integral to the success of any business. Policing is traditionally reactive and is generally not equipped or resourced to undertake a proactive role; therefore policies of prevention must be undertaken by management. (iii) Accountability makes for committed management Unless management is responsible not only for their own actions but accountable for the actions of their staff then there will be little motivation for management to commit them to achieving desired outputs. Management are often not owners and the larger the organization the less the individual manager may naturally identify themselves with overall aims and in particular fraud control. Accordingly if it is desired to eradicate fraud in the workplace then positive steps should be taken to ensure that management are clearly responsible for doing so and accountable for the result of their efforts. back next

68. There are some obvious common mistakes that can be avoided. One must never think that: • "If nothing has come up, its not happening." of its nature workplace fraud is likely to be insidious and covert. Those who may commit it will be aware of the possibility of detection and keen to avoid that detection. Accordingly it is quite likely to be being committed in a way that is not immediately apparent to management. Complacency must be avoided and a proactive approach taken. • "If it arises it can be dealt with then." Again, the hands off attitude are likely to prevent any perception that fraud is occurring at all. It may occur insidiously for many years before detection. Punishment of the offender after the event is likely to be cold comfort when compared with the losses that may have occurred by then. back next

69. • "Nothing can be done as fraud will always be a part of business." Whilst it is true you can never completely prevent wrong-doing in society, human behavior is usually the result of a Galbrathian equilibrium; the final balance of a number of countervailing forces. Accordingly the harder it is to do the wrong thing; the less people will do the wrong thing. Further if people can be motivated not to want to do the wrong thing then as long as they understand the rules they won't do the wrong thing. back next

70. BASIC PRINCIPLES OF FRAUD ERADICATION The rules must be clear This may sound simplistic but it is surprising how often this principle is ignored. Unless people are told what the right thing is, they cannot be expected to do it. Whilst most people know that it is unacceptable to steal company property, there is a wide-range of less direct behavior where guidance is clearly required. on many occasions those who have been caught doing the wrong thing in the public sector have simply stated that they didn't think they were doing anything wrong. Time and time again public and private sector employees have demonstrated a lack of knowledge of the principles governing conflict of interest in circumstances where they have acted to their own benefit. back next

71. The rules must be enforced . Responsibility and accountability It is essential to identify who is responsible for the performance of a specific task and to whom they must report. Adequate records There must be a requirement that adequate records of all significant workplace decisions and actions are maintained. back next

72. ORGANISATIONAL CULTURE, VISION AND MISSION Notwithstanding the establishment of a system that provides basic rules, provides for the enforcement of those rules, and establishes accountabilities and adequate records, there will always be a significant amount of discretion and trust reposed in members of staff. There will always be limits on the degree of supervision that can be maintained, and general responsibilities and accountabilities go only so far in achieving honest behavior. Human ingenuity is such that there will always be a range of subtle, hard to detect and indirect causes of potential loss that may be attempted with success in the workplace. Even the best structured workplace will allow for some dishonest behavior to go un-detected. You can't check every paper clip every day, or perform a full background check on every supplier to ensure that they are not related by blood, friendship or sporting club to the officer who has dealt with them. No structure can check everything and prevent all forms of wrong-doing. Accordingly an extremely important adjunct to a good workplace structure is the creation of an organizational culture of integrity. As long as the rules are plain, the rules are enforced, there are clear responsibilities and accountabilities and adequate records are kept, then the basics have been provided to enable every employee to be able to do the right thing if they want to do the right thingf raud can be almost entirely eradicated from the workplace. back next

73. HOW TO ACHIEVE AN ORGANISATIONAL CULTURE OF INTEGRITY The first basic principle is to have a workplace which enables workers to be happy and satisfied. Lack of security, inequitable recruitment or employment practices, inadequate remuneration, threat of physical danger from unsafe workplace practices or exposure to the elements and so forth are all things that are likely to prevent the happiness of employees. A happy, secure well paid worker is less likely to have animosity towards his or her employer and is correspondingly less likely to treat the employer badly. The series of psychoanalytical studies summarized by hall Williams (1992) have found significant correlations between crime and abnormal patterns of belongingness, love and happiness. Accordingly fair employee practices and attention to their well being is in itself likely to provide the basis for a organizational culture of honesty. Such practices are incidentally likely to reduce industrial action, employment-related litigation and staff turnover, all of which can cost a workplace dearly. Constant reinforcement of the desired principles can itself create a desired culture. As Berger and luck Mann tell us, most of our reality is socially created and this is particularly so in the workplace. if a message is sent and signposts reinforcing it are perceived everywhere then the tendency is for the viewer to eventually accept the message as reality. Accordingly the principles of honesty and integrity should be made plain at every opportunity. back next

74. . A number of strategies can be adopted: • Through recruitment . The requirement for integrity and a commitment to honesty in the performance of work can be made plain at the recruitment stage. It can form part of the job advertisement and be emphasized in both interview and induction processes. • Training and education . Lectures, circulars, discussion groups, statements of organizational purpose and job descriptions can all reinforce the message that honesty and integrity is highly valued within the organization. • Performance appraisal . Commitment to integrity and honesty in the performance of duties can be made a significant and overt factor in regular performance appraisals back next

75. • Financial rewards. Bonuses can be paid whether for performance generally or in respect of individual actions that demonstrates a commitment to the principles. • Signposting . Statements of organizational purpose and mission can be drawn up in conjunction with employees who will then have a degree of ownership of them. Signs can actually be put on walls. There are ranges of ways where the ethical requirements of honesty and integrity can be tangibly symbolized. • A good example must be set by management. Unless an example is set by management then very negative messages are sent to employees. Setting a good example by management not only graphically indicates the desired behavior, indicates that management has a commitment to the principles itself, but also indicates that honest behavior is a criteria for appointment to management and promotion generally within the organization. • There must be clear avenues for wrongdoing to be exposed, and "whistleblowers" must be encouraged and publicly supported. A published policy on it, and tangible support through bonuses and promotion for whistleblowers send a very clear message that management means what it says. back next

76. In the summer of 2000, a sophisticated hacker took command of large portions of the University of Washington Medical Center's internal network and downloaded computerized admissions records for four thousand heart patients. The intrusions began in June, and continued until at least mid-July, before network administrators at the Seattle teaching hospital detected the hacker and cut him off. The medical center was reportedly unaware that patient records were downloaded, and elected not to notify law enforcement agencies of the intrusions. The hacker, a 25-year-old Dutch resident who calls himself “Kane,” posted a notice that stated, "All the data taken from these computers was taken over the Internet. All the machines were exposed without any firewalls of any kind back next

77. The first steps in neutralizing the above cited dangers are to recognize potential threat origins, analyze the nature of the threats and identify the likely targets. This is accomplished through implementing a thorough assessment of the strengths and weaknesses of organizational security, specifically identifying those areas which need physical, technological and/or administrative attention. The Report to the Nation lists the following tactics as the most effective ways to reduce fraud losses: Internal audits. External audits. Background checks of employees. back next

78. One mistake business owners commonly make is waiting until after a fraud scheme is revealed to take preventive action. An experienced fraud examiner will be able to work closely with you to examine the opportunities for fraud that currently exist in your business. This audit will closely examine the vulnerability of the systems in your business. A careful examination of your revenue, payments, purchasing, inventory and payroll systems could reveal loopholes in your systems that could be exploited by employees who, given the opportunity, could rip you off. back