Forensic Analytics, 2nd Edition

CHAPTER 14Case Study : A Supplier's Fraudulent Shipping Claims

THE EXORBITANT SHIPPING CHARGES reviewed in this chapter are relevant to our study of forensic analytics because of the $20.6 million dollar loss to the victim, the nine-year duration of the scheme, the high ratio of the shipping charges to the cost of the items, and a disconnect to the three elements of the fraud triangle (pressure, opportunity, and rationalization). The fraud scheme included some of the attributes of a cyberattack. Cyberattacks include intentional unauthorized intrusions into the computer system of an organization using a flaw in the authorization, authentication, and permissions controls, with the objective of achieving a gain either directly from the intrusion, or indirectly from the data obtained because of that intrusion. The objective in some cyberattacks is to disable the target computer or to knock it offline. In this case though, the supplier exploited the lack of controls related to shipping charges and claimed shipping amounts that were excessive by any stretch of the imagination. This chapter reviews the fraud scheme, gives some insights into the people involved in the scheme, provides some analytics associated with the scheme, and ends with some conclusions focused on preventive and detective controls.

BACKGROUND INFORMATION

Charlene and her twin sister Darlene (born in 1960) were the youngest two daughters of Ashton and Stella Schuler. Donna, the oldest daughter, died of cancer ...