Question

Match these 10 frauds/schemes with the corresponding definitions/scenarios.   On the homework assessment, the definitions will have multiple choice options.

Skimming, payroll fraud scheme, lapping, illegal gratuities, investment scam, expense scheme, disbursement fraud, check tampering, asset misappropriation, billing scheme.

1. Rick Grimes is a real person. He is a friend of Sam who works at Parry Corporation. Sam adds Rick to the payroll of Parry Corporation. Rick does not work at Parry Corporation but he does cash the checks he receives from Parry Corp. and splits the money with Sam.
2. Ted is a City Commissioner. He negotiated a land deal with a group of private investors. After the deal was approved, Ted and his girlfriend were rewarded with a free trip to Cancun Mexico, all expenses paid.
3. Theft that is committed by stealing receipts, stealing assets on hand, or committing some type of disbursement fraud.
4. An employee who works the cash register enters a “no sale” on their cash register so that it appears a sale is being rung up to the customer and other observers. The employee is stealing the customer’s payment.
5. Having an organization pay for something it shouldn’t pay for or pay too much for something it purchases.
6. An individual promises a high paying dividend on an investment product they are selling. However, instead of investing the funds received, the individual pays “dividends” to initial investors using the amounts “invested” by subsequent investors/victims.
7. An employee at a company manufactures fake receipts using his computer and laser printer. The employee seeks reimbursement on these invented purchases.
8. This is a method of concealing the theft of cash designated for accounts receivable by crediting one account while abstracting money from a different account. The process is continuously repeated to avoid detection.
9. Sam is trusted employee at Pear Corp. He has possession of the company’s checks. He makes a check payable to himself. He fraudulently affixes the signature of an authorized maker (signer).
10. Lilly works at Pear Corporation. She is in a position that approves invoices for payment. She creates a shell company called Hooks. She opens a bank account for Hooks. She authorizes payments for invoices submitted from Hooks.

Answer 1

SKIMMING - An employee at a company manufactures fake receipts using his computer and laser printer. The employee seeks reimbursement on these invented purchases.

(SKIMMING MEANS FRAUDULENTLY THEFT MONEY BY THE USE OF ELECTRONIC DEVICES)

PAYROLL FRAUD SCHEME - Rick Grimes is a real person. He is a friend of Sam who works at Parry Corporation. Sam adds Rick to the payroll of Parry Corporation. Rick does not work at Parry Corporation but he does cash the checks he receives from Parry Corp. and splits the money with Sam.

(PAYROLL FRAUD SCHEME MEANS THEFT OF CASH FROM THE BUSINESS BY VARIOUS WAYS ONE OF THEM IS PAYCHECK DIVERSION IN THIS WAY EMPLOYEES COULD TAKE THE PAYCHECK OF ANOTHER EMPLOYEE AND DISTRIBUTE IT WITHIN THEMSELF )

LAPPING- This is a method of concealing the theft of cash designated for accounts receivable by crediting one account while abstracting money from a different account. The process is continuously repeated to avoid detection.

(IT MEANS PRACTICE THAT INVOLVES ALTERING ACCOUNTS RECEIVABLE TO HIDE STOLEN RECEIVABLE PAYMENT )

ILLEGAL GRATUITIES - Ted is a City Commissioner. He negotiated a land deal with a group of private investors. After the deal was approved, Ted and his girlfriend were rewarded with a free trip to Cancun Mexico, all expenses paid.

(IT MEANS SOMETHING OF VALUE THAT A PERSON GIVES OFFERS OR PROMISES FOR THE PURPOSE OF INFLUENCING THE ACTIONS OF AN OFFICIAL)

INVESTMENT SCAM - An individual promises a high paying dividend on an investment product they are selling. However, instead of investing the funds received, the individual pays “dividends” to initial investors using the amounts “invested” by subsequent investors/victims.

(IT MEANS THE ILLEGAL ACTIVITY OF PROVIDING FALSE INFORMATION TO SOMEONE SO THAT THEY WILL INVEST IN SOMETHING)

EXPENSE SCHEME- Having an organization pay for something it shouldn’t pay for or pay too much for something it purchases.

(IT MEANS MADE PAYMENT THAN REQUIRED WHICH LEADS TO MORE EXPENSE THEN NEEDED)

DISBURSEMENT FRAUD-An employee who works the cash register enters a “no sale” on their cash register so that it appears a sale is being rung up to the customer and other observers. The employee is stealing the customer’s payment.

(IT MEANS EMPLOYEES USES HIS POSITION TO CAUSE A PAYMENT FOR SOME INAPPROPRIATE PURPOSE)

CHECK TAMPERING- Sam is trusted employee at Pear Corp. He has possession of the company’s checks. He makes a check payable to himself. He fraudulently affixes the signature of an authorized maker (signer).

(IT MEANS A FRAUDULENT DISBURSEMENT SCHEME WHEREBY AN EMPLOYEE PREPARES A FRAUDULENT CHECK FOR HIMSELF)

ASSET MISAPPROPRIATION- Theft that is committed by stealing receipts, stealing assets on hand, or committing some type of disbursement fraud.

(IT MEANS FRAUDULENTLY MISAPPROPRIATE THE ASSETS AND DISBURSEMENTS RELATED TO THEM)

BILLING SCHEME-Lilly works at Pear Corporation. She is in a position that approves invoices for payment. She creates a shell company called Hooks. She opens a bank account for Hooks. She authorizes payments for invoices submitted from Hooks.

(IT MEANS THE PERPETRATOR DEPRIVES THE VICTIM OF FUNDS, PERSONAL PROPERTY, ETC.)