Top States With The Most Fraud Complaints

Fraud and scams cost Americans more than $1.6 billion last year. According to a report from the Federal Trade Commission (FTC), there were more than 2 million cases of fraud in 2013, down slightly from the previous year.

On average, there were 500 complaints per 100,000 residents in the 50 states. Eight of the 10 states with the highest rates had at least 600 complaints per 100,000 residents. Florida led the nation with nearly 1,000 total complaints per 100,000 people. Based on data published by the FTC’s annual Consumer Sentinel Report, 24/7 Wall St. identified the 10 states with the most fraud complaints. Nevada ranked number 3 on the list.

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Lessons Learned: Segregate Duties to Unmask Employee Fraud

Borrowing a case from the Internal Revenue Service’s list of recent fraud investigations, an experienced office manager was seen as a trusted employee and was given little to no supervision. Unfortunately, she was wearing that trust as a mask to disguise her fraudulent behavior.

Over a span of two years she secretly forged documents allowing her to steal almost $120,000 and commit tax evasion. This was possible because of a lax office environment with little to no internal controls. So how do we unmask the hidden dangers of employee fraud to help prevent these behaviors?

Segregation of duties is often considered to be one of the keys to having successful internal controls in a business. In the case above, the office manager did not have anyone working with her on a day-to-day basis; if she had, they may have observed improper financial procedures well before they were discovered two years later. A business should have more than one person required to complete a task, especially one involving finances.

This helps in two ways:
1. Minimizes minor mistakes. With two or more sets of eyes going over a task, the risk of missing a mistake is significantly reduced.
2. Reduces opportunities for fraud. A successful scheme often heavily relies on one element of the fraud triangle: opportunity. If an employee has proper supervision and knows that several people will be involved in a financial procedure, the lack of opportunity may keep their fraudulent behavior in check.

For more information on how internal controls can help reduce your risk of occupational fraud, please contact a Certified Fraud Examiner at Piercy Bowler Taylor & Kern.
Fraud case source:

IRS Releases the “Dirty Dozen” Tax Scams for 2014

WASHINGTON — The Internal Revenue Service today issued its annual “Dirty Dozen” list of tax scams, reminding taxpayers to use caution during tax season to protect themselves against a wide range of schemes ranging from identity theft to return preparer fraud.

The Dirty Dozen listing, compiled by the IRS each year, lists a variety of common scams taxpayers can encounter at any point during the year. But many of these schemes peak during filing season as people prepare their tax returns.

“Taxpayers should be on the lookout for tax scams using the IRS name,” said IRS Commissioner John Koskinen. “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

The following are the Dirty Dozen tax scams for 2014:

  1. Identity Theft
  2. Pervasive Telephone Scams
  3. Phishing
  4. False Promises of “Free Money” from Inflated Refunds
  5. Return Preparer Fraud
  6. Hiding Income Offshore
  7. Impersonation of Charitable Organizations
  8. False Income, Expenses or Exemptions
  9. Frivolous Arguments
  10. Falsely Claiming Zero Wages or Using False Form 1099
  11. Abusive Tax Structures
  12. Misuse of Trusts

MasterCard uses geolocation to make sure you are you

If someone steals your credit card, they’d probably have little trouble racking up a hefty bar tab or buying a new TV with the plastic. But MasterCard MA+0.01% is experimenting with a new technology to change that by using your smartphone’s geolocation to verify that you are in the same location as your credit card at the time of sale.

“We can actually make sure that when we see a transaction we can confirm you are actually where you say you are,” says James Davlouros, vice president of global strategic alliances at MasterCard. Currently, MasterCard’s pilot program is available in Europe, with a commercial launch scheduled later this year in North America, Europe, and Asia.

Read more at The Wall Street Journal

What’s your Fraud IQ?

From Accounting Today

Fraud happens in companies of all sizes, in all industries, and in all countries. Given enough time, it will almost certainly happen in a company that does not enact proactive fraud prevention measures. Do you know what initiatives are most effective in deterring potential fraudsters? Are your clients among those who are left unguarded? How well-versed are you in protecting organizational resources from the hands of would-be fraudsters? Take this quiz and find out.

1. Generally speaking, what is the primary objective of a fraud risk assessment?

a. To provide an estimate of an organization’s fraud losses.

b. To help an organization’s leadership identify areas most vulnerable to fraud.

c. To establish the guilt or innocence of an employee suspected of committing fraud.

d. To assess the design and effectiveness of internal controls over financial reporting.

Continue reading at Accounting Today.