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Long accepted as a cost of doing business, occupational fraud has recently proven to be much more dangerous to a company than previously thought. Enron, Global Crossing, and other high-profile cases have shown that the risks can be enormous. Fraud Exposed shows how traditional methods of dealing with occupational fraud are inadequate and how an organization's mindset must change if it is to be more effective in dealing with this problem. In-depth insights and practical advice show readers how to apply criminal and law enforcement response models to workplace fraud prevention and detection; analyze financial controls to prevent occupational fraud; as well as examine and improve current defenses to occupational fraud. Written by an expert in this field, Fraud Exposed provides organizations with a realistic approach to uncovering fraud and eliminating it before any damage is done.
Joseph W. Koletar, PhD (Glen Rock, NJ), is a Principal and Service Line Leader in Ernst & Young's Forensic and Security Services Practice in New York. Prior to joining Ernst & Young, he was the director of the Forensic and Corporate Investigative Services practice of Deloitte & Touche LLP. Before joining the private sector, Dr. Koletar spent twenty-five years as a special agent in the FBI.
On the Back Cover
The ,600 billion gorilla in the room
"Dr. Joe Koletar has provided an effective road map to the problem of occupational fraud, in both the public and private sectors, in America. Such frauds affect every American worker, shareholder, and taxpayer. His insights and ideas are an important contribution to the effort to fight this growing menace."
-- Congressman John E. Sweeney, New York's 22nd District
"A superb and timely book for every executive to read. Joe Koletar has brought together all the works done in the past on occupational fraud and given us a road map of what needs to be done. It will be required reading for every candidate in an MBA program."
-- Thomas J. Pickard, Vice President, Corporate Security, Bristol-Myers Squibb and former Deputy Director, FBI
"Joe Koletar deserves high praise for this timely and trenchant analysis of corporate crime. Bringing to bear his extensive experience in the FBI and the private sector, Koletar dissects the roots of corporate fraud, the means to prevent it, and the best way to investigate it when it occurs. Anyone wanting to understand the current spate of corporate accounting scandals should read this book."
-- David Zornow, Litigation Partner, Skadden, Arps, Slate, Meagher & Flom LLP and former Federal Prosecuter
While occupational fraud has long been accepted as the cost of doing business, Enron, Global Crossing, and other high-profile cases have proven its potential for catastrophic damage to be significant. And, paradoxically, these headline-grabbing examples are only the tip of the iceberg. The lion's share of the estimated ,600 billion lost every year to workplace fraud comes from small-time kickbacks and "ghost vendor" scams that go undetected and unpunished. Fraud Exposed lets the white-collar crime cat out of the bag, presenting comprehensive, provocative solutions for eliminating occupational fraud. Topics covered include:
- Law enforcement response models
- Internal and financial controls
- Organizational intelligence
- Game theory and other fresh, radical perspectives
- Preventive and punitive measures
Auditors, fraud examiners, CFOs, and controllers will find Fraud Exposed to be an essential addition to their professional libraries.
Front Cover Glimpse
As an estimated ,600 billion a year "industry," occupational fraud dwarfs most legitimate industries many times over. Yet the vast majority of organizations-private, public, governmental, or nonprofit-have woefully inadequate internal controls, and what energy is devoted to combating workplace fraud is generally spent on post-infraction detection and punishment, rather than on cost-effective preventive measures. In Fraud Exposed: What You Don't Know Could Cost Your Company Millions, former FBI executive and corporate security chief Joseph Koletar blows the roof off the "dirty little secret" of occupational fraud, proposing new methods for reducing this extraordinary liability.
Applying criminal and law enforcement response models to the workplace, Koletar analyzes seemingly disparate topics such as financial controls, organizational intelligence, and game theory to show how fraud examination methodology must change in order to become more effective. High-profile, high-level cases such as Enron and Global Crossing are dramatic examples of workplace crime, but they are only the tip of the iceberg. Kickbacks, large-scale diversion of goods and services, and the creation of "ghost vendors" are surprisingly common phenomena in such industries as retail, manufacturing, health care, education, financial services, entertainment, advertising, waste management, and energy, costing these industries millions upon billions of dollars every year. And these costs do not simply "go away." They result in higher prices to consumers, lower profits to companies and shareholders, higher cost to taxpayers, lower bonuses to managers and executives, poorer performance on Wall Street, negative impacts on pension and retirement plans, and the failure of more than a few businesses.
Fraud Exposed takes on the status quo, showing how traditional methods of dealing with occupational fraud are inadequate and how an organization's mind-set must change if it is to be more effective in dealing with this problem. Chapters discuss:
- Crime and the Law Enforcement Response
- Lies, Damned Lies, Statistics (and Occupational Fraud)
- Community, Corporate Citizenship, and Quality of Life
- Forensic Professionals as Organizational Pathologists
- The Next Five Years
In each, Koletar debunks fraud orthodoxy, approaches the problem from a fresh angle, and presents provocative new strategies. There is no magic solution to this ,600 billion problem. But Fraud Exposed presents both a startling, comprehensive account of the dilemma and a road map to reducing workplace fraud.
