Hoorcollege 3 Flashcards
Billing schemes
Usage of false documentation to cause a payment to be issued.
Schell company
Fake vendor set-up. Fictitious organizations are created for the sole purpose of committing fraud.
“Rubber stamp” supervisors
Supervisors who needs to approve invoices, doesn’t do it’s job correctly and approves a fraudulent invoice.
Pass-through schemes
Not a factors purchase, but you create a higher bill than the goods actually cost, and you pay the actual bill yourself, and keep the profit.
Non-accomplice vendors
Vendor is not a part of the scheme and completely innocent. Pay-and-return schemes and overbilling. You pay too much to the vendor and let the difference be deposited into your own bank account.
Cheque tampering
Prepetrator physically prepares the fraudulent cheque.
Forged maker schemes
An employee misappropriates a cheque and fraudulently affixes the signature of an authorized maker. So, they steal a blank check, they put a convincing forgery on it and forge an authorized signature.
Forged endorsement schemes
You intercept the cheque that is meant for someone else, you are forging the person that is supposed to be delivered to, and you put your own name on it. The signature is already on it, and the cheque is official, but it doesn’t go to the vendor because you endorse it. Somebody is going to ask for their money, however the organization think it paid for it, but the money went to someone else.
Altered payee schemes
Employee intercepts a company cheque intended for a third party. Payee designation is altered so the cheque can be converted, creating a company that looks very much like another company, so it doesn’t look suspicious.
Tacking on
Letters or words are added to the end of the real payee designation.
Concealed cheque schemes
Employee prepares a fraudulent cheque and submits it along with legitimate cheques, you are hoping that the person that signs the cheques does not pay attention and signs the cheque without paying attention to it. Occurs when cheques are signed without proper review or reviewer is busy.
Authorized maker schemes
Employee with signatory authority writes a fraudulent cheque, they have control of the money, they do it on purpose and can’t really get caught. The signing officer is supposed to be the control, but in this case that is the person that is creating the fake cheque.
