Fraudulent Disbursement Schemes – a distribution of company funds for a dishonest purpose. The perpetrators take money from their employer in such a way that it appears to be a normal disbursement of cash. Someone might notice the fraud based on the amount, recipient, or destination of the payment, but the method of payment is legitimate. There are several fraudulent disbursement schemes, such as: 1. Register Disbursement Schemes:
• Fictitious Refunds – processing transaction as if a customer were returning merchandise, however, there is no actual return. Because the transaction is fictitious, no merchandise is actually returned.
• Overstated Refunds – overstating the amount of the refund and pocketing the difference.
• Credit/Debit Card Refunds - ringing up a refund on a credit or debit card sale, even though the merchandise is not actually being returned and crediting perpetrator’s own credit or debit card.
• False Voids – withholding the customer’s receipt at the time of the sale and then “voiding” the sale and pocketing the money. 2. Check Tampering Schemes:
• Forged Maker – when an employee steals a check and fraudulently affixes the signature of an authorized person.
• Forged Endorsement – when an employee intercepts a company check payable to a third party and cashes the check by endorsing it in the third party’s name.
• Altered Payee – when an employee intercepts a company check payable to a third party and alters the payee designation so that the check can be converted by the employee or an accomplice.
• Authorized Maker - when an employee with signature authority on a company account writes fraudulent checks for his own benefit and signs his own name as the maker. 3. Billing Schemes:
• False Invoicing via Shell Companies – when an employee or his accomplice creates a company and bills his employer for the services “provided” by his company or, instead of buying merchandise directly from a vendor, the employee sets up a shell company and purchases the merchandise through that fictitious entity at an inflated price.
• False Invoicing via Non-accomplice vendors: a. Pay-and-Return Schemes – when an employee intentionally mishandle payments, such as overpaying or double-paying an invoice or paying the wrong vendor. b. Overbilling with a Nonaccomplice Vendor’s Invoices - when an employee alters an existing vendor’s invoice or creates a counterfeit copy of a vendor’s invoice form.
• Personal Purchases made with Company Funds: a. Personal Purchases through False Invoicing – running unsanctioned/fake invoices through the accounts payable system. b. Personal Purchases on Credit Cards or Other Company Accounts – making personal purchases on company credit cards or on running accounts with vendors.
