Traveling in High Style on the Organization’s Dime, Part 1

By Joseph R. Dervaes, CFE, ACFE Fellow, CIA
joseph-dervaes-80x80.jpg Fraud's Finer Points
Case History Applications

Travel fraud is categorized as a fictitious expense scheme. In the ACFE's Occupational Fraud and Abuse Classification System (the "Fraud Tree"), the crime is a subset of fraudulent disbursements, which is a subset of cash schemes. Travel fraud is one of the most common forms of fictitious expense schemes I've encountered during my career. Instead of overstating a real business expense, as many fraudsters do, these employees simply invent travel activities and submit completely false expense reports. Some organizations routinely pay these false claims because they have inadequate internal controls to detect them. Thus, these organizations issue checks for unauthorized business purposes, which the perpetrators then use for personal benefit. There are many travel fraud schemes, and we'll try to cover a variety of them in this and the next two columns. 

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