Fraud Basics

Poorly governed financial systems and fraud: It all starts with access

Access/identity control is a fundamental component of data security that dictates who’s allowed to access and use company information and resources. But organizations still lack the necessary protections, opening the door for fraudsters to exploit their systems. Here the authors examine the latest IT resources to keep such criminals at bay.

A facilities manager who created shell companies and submitted fake invoices for them stole nearly $1.2 million from his employer in a scheme that spanned about seven years. Quest Diagnostics employed David Alan Smith in its Tampa, Florida-based laboratory, and one might wonder who at Quest was rubber-stamping his fake invoices for fake companies for all those years? The answer would be Smith himself as he was the one in charge of approving vendor invoices and sending them to the corporate office for payment. After being caught, Smith pleaded guilty to numerous fraud charges and was sentenced to five years in prison. (See “Ex-manager to plead guilty in theft of $1.2M,” Tampa Bay Times, Archive, updated Feb. 26, 2008 and “Fraudulent lab manager handed five-year prison stint,” by Joseph Harvey, Informa, June 6, 2008.)

In another fraud case, a man working in IKEA’s phone and mail-order business made a tidy profit by giving himself refunds on purchases made by customers. By the time he was caught, Suraj S. Samaroo had stolen nearly $400,000 in less than a year from IKEA Direct’s Rosedale, Maryland, location.

According to a news article, it wasn’t IKEA that discovered his fraud — Samaroo was caught after his bank noticed unusual deposits to his account and informed police of the suspicious activity. After making a full confession and admitting “pure greed,” Samaroo pleaded guilty and was convicted of a felony theft scheme. (See “IKEA worker pleads guilty to stealing $400K,” Maryland Daily Record, Nov. 20, 2008.) 

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