Profiling The Fraudster: Removing the Mask to Prevent and Detect Fraud

Chapter 16Using Case Studies for Profiling Fraudsters

AS WE HAVE SEEN, there are various approaches to profiling fraudsters and many angles from which we can gather and analyze data for profiling, as follows:

• Personal characteristics.
• Behavioral characteristics.
• Higher-risk industries.
• Analysis of victim organization.
• Higher-risk departments.
• Higher-risk positions.
• Modus operandi or methodology.
• Analysis of consequences.

One way of bringing all of these components together for analysis and study is to examine actual real-life cases of fraud. Using the components of fraudulent behavior—incentive/motivation, opportunity/availability of suitable target organization, and rationalization—can provide a structured approach to developing fraud profiles that can be used to formulate a focused, cost-effective response to fraud prevention and detection.

Why Reinvent the Wheel?

Learning from case analysis is a long proven method of successful and innovative professional practice in solving business problems. The advantages are that real experiences, knowledge, and concepts as well as skills of critical thinking, argument, and improved decision making can be accessed and developed for the prevention of fraud and management of fraud risk.

We could study and learn from either a hypothetical fraud scenario or a real-life case. Let's say, for example, that a project manager was awarding contracts to a subcontractor in return for secret commissions. The employee would have corrupted the tendering ...