Fraud – spotting the anomalies

Eagle-eyed members of a council’s finance team have stopped an attempt by an organised crime gang to defraud a local authority out of more than £1 million.

The staff at Hertfordshire County Council have passed their concerns to Hertfordshire Shared Anti-Fraud Service, which has launched an investigation, resulting in a number of ‘mule’ bank accounts being frozen.

Spotting anomalies, such as applications that don’t add up or alterations on documents can be the first step in detecting attempted fraud within a business or any organisation.

If a business owner believes that fraud has taken place or is underway, engaging a forensic accountant can help to uncover evidence and put a stop to the scam.

When investigating fraud, forensic accountants typically start by conducting a detailed audit to identify what, if any, fraud is being carried out. Where they find fraudulent activity, they can then trace its origins to see when it started and, in some cases, who the perpetrators might be.

During the audit, they would look at how the fraudsters covered their tracks, which could have been via payments to a supplier that doesn’t exist but does have a bank account linked to the fraudster.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “In the course of the investigation, the accountant would collect the evidence uncovered, and present it in a manner than can easily be understood by the courts.

“If the case involves a criminal prosecution, the financial evidence will have to be set out in a way that is compelling and comprehensible for a lay jury, whose members may well not have any financial training.  Often forensic accountants therefore use charts, graphs and “infographics” to explain how money may have flowed between conspirators on the basis that a picture can often be worth a thousand words.”

Posted in The Forensic Blog.