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Fighting Fraud - 1st Edition - ISBN: 9780123708687, 9780080550985

Fighting Fraud

1st Edition

How to Establish and Manage an Anti-Fraud Program

Author: Gerald Kovacich
Paperback ISBN: 9780123708687
eBook ISBN: 9780080550985
Imprint: Butterworth-Heinemann
Published Date: 27th August 2007
Page Count: 360
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This practical reference provides the basics for instituting a corporate anti-fraud program that helps prepare corporate security professionals and other corporate managers for fighting corporate fraud from inside the company. Fighting Fraud provides an exceptional foundation for security professionals or business executives involved in developing and implementing a corporate anti-fraud program as part of a corporate assets protection program.

The author’s intent is to provide the reader with a practitioner’s guide (a “how-to” book), augmented by some background information to put it all in perspective. The approach used should enable the readers to immediately put in place a useful anti-fraud program under the leadership of the corporate security officer (CSO), or other corporate professional.

Key Features

  • Shows professionals how to save their companies money
  • Provides a roadmap for developing an anti-fraud program
  • Allows security professionals to tailor their anti-fraud program to their own corporate environment
  • Explains how fraud is costing corporations a competitive edge in the global marketplace


Corporate security professionals, accountants, investigators and auditors, students in security mgmt programs

Table of Contents



Introduction and Premise

Section I: An Introduction To The Wonderful World of Fraud

Chapter 1 The New-Old Global Business Environment


Globalization of Business — Benefits to Nation-States

Expansions of the Global Marketplace and their Areas of Operations

Types of Corporations

Corporate Owners and Locations

Corporate Products

The High-Technology Factor


High-Technology Related Frauds and Other Crimes

Advent of the Superhighways4

The Impact of Superhighways on Frauds and Other Crimes

A Short History of Crimes and Other Frauds Via the I-Way

Superhighway Frauds and Other Crimes to I-Way Robberies

I-Way Robbery — Its Prevalence

There Is No I-Way Patrol to Stop I-Way Robbers

Global Connectivity Via the I-Way = Global Exposure to

Attacks by Fraud-Threat Agents and Other Miscreants

Capabilities and Limitations of Law Enforcement

Challenges to Security Professionals and Others

Case Study 1

Case Study 2


Chapter 2 Corporate Assets, Frauds and Other Terms — What are They?


Definition of General Fraud

Specific Fraud Definitions

Corporate Assets

Other Terms and Definitions

Case Study


Chapter 3 Fraud-Related Laws


Some U.S. Federal Fraud-Related Laws

Relevant Consumer Protection Laws for Fraud in the United States

A Few Examples of U.S. Federal Enforcement of Fraud-Related Laws, Approach and Actions

Mail Fraud Statutes (condensed and paraphrased)

Money Laundering

Financial Institution Fraud (Bank Fraud)

Civil Litigation

U.S. Treasury Collection

Securities Violations

Role of Phone Companies

European Fraud-Related Laws

EU Fight Against Frauds

ASIA and Fighting Fraud

Case Study

"Blowing the Whistle" on Defrauders can be Dangerous


Chapter 4 Corporations Don't Commit Frauds, People Do


Are Defrauders a Product of Their Environment, or is it in Their Genes?

Some Criminology Theories

Fraud-Threat Agents

Human Errors — Accidents

Man-Made or Malicious Fraud Threats

Potential Fraud-Threat Agents







Fraud-Related Factors for Attacking Systems

Relationship of Threat Elements

Case Study


Chapter 5 Fighting Fraud — Whose Job is it Anyway?


Role of Executive Management

Role of Corporate Management

Role of the Corporate Employees

Role of the Ethics Director

Role of the Auditor

Role of the Fraud Examiner

Role of the Chief Security Officer (CSO)

Why the Corporate Security Professional?

Case Study


Chapter 6 Where There is a Will There is a Way — Fraud Schemes


Types of Fraud Schemes


Credit Card Skimming

Mortgage Frauds

Computer and Telecommunications Frauds

ATM Frauds

Click Fraud

Clip-on Fraud

Securities Frauds

Employment Application Frauds

Identity Theft Scams

"Nigerian Scam"

Accounting Fraud Schemes

Bribery and Corruption

Conflicts of Interest

Purchasing — Four Basic Categories


Investments and Fixed Assets

Payroll and Personal Expenses


Telemarketing Fraud

Advance Fee Scheme

Common Health Insurance Frauds

Letter of Credit Fraud

Prime Bank Notes

The Ponzi Scheme

Pyramid Scheme

Case Study


Chapter 7 Fraud Cases and Commentary — Learning by Example


Actual Fraud and Fraud-Related Cases

Phishers and Taxpayers

Fraud by Corporate Executives

Foreign Exchange Trading Fraud

Katrina Waste and Frauds

Organized Crime and Cybercrime

Securities Fraud in Cyberspace

Computer Hard Drives Lead to Frauds

Debt-Collecting Frauds

Government Contracting Fraud

Fraud-Threat Agents Can Be Anyone in Any Position

U.S. Securities and Exchange Commission (SEC) Fighting Fraud

Fraud in School Systems

Dead Soldiers and E-Mail Scams

Another Example of Insider Fraud

Executive Management and Accounting Fraud

Merchandise Receipt and Exchange Fraud

Click Frauds

Mortgage Fraud

Government Contractors and Fraud

Frauds and Microsoft Software

Y2K-Related Fraud

Data Storage Conducive to Fraud-Threat Agents

Another Example of Click Fraud

Pyramid Schemes Move on to the Internet

Prepaid Cellular Phone Fraud

Identifying International Corruption

Credit Card Information Theft and Frauds

Hackers, Crackers, Phishers, Oh My!

Urban Legends and Frauds

Medical Research Frauds

Corruption and the War in Iraq

Comments on Identity Thefts as a Vehicle to Fraud

Lobbyists and Corruption

Internet Scams are International

Faking a Medical Condition

Internet Fraud Sweep

ATM Fraud

Social Security Scam

Stamp Fraud

Banker and Identity Theft

Accounting Firm Fraud

Lawyers and Medical Rip-offs

Another Mention of the "Nigerian" Scams — Variations on a Theme

Case Study


Section II: Establishing and Managing an Anti-Fraud Program

Chapter 8 The International Widget Corporation


IWC Background Information

Key Elements for the CSO to Consider

Getting to Know IWC

IWC's Business Plan

Strategic Business Plan

Tactical Business Plan

IWC's Annual Business Plan

IWC and the History of Its CSO

Key Elements of IWC's Annual Business Plan

Anti-Fraud Program Planning

IWC's Departments of Primary Importance to the CSO

IWC Vision, Mission, and Quality Statements


Other IWC Plans and CSO Support

Case Study


Chapter 9 Establishing an Anti-Fraud Program


IWC's Anti-Fraud Program

Anti-Fraud Program Project Planning

IWC Anti-Fraud Program Project Planning and Management

Anti-Fraud Program Project Team

Anti-Fraud Drivers — The First Major Task in Anti-Fraud Program Development

IWC Anti-Fraud Program Requirements — Policies96

Risk Assessment — The Second Major Task in Developing an Anti-Fraud Program

Basics of IWC's Risk Assessment Process97


Natural Threats

Man-Made Threats



Assets Protection Risk Assessments

Assets Protection Risk Analyses

Developing Anti-Fraud Defenses

Three Key Ingredients in an Anti-Fraud Program's Defenses

IWC's Anti-Fraud Policies

Anti-Fraud Requirements and Policy Directive

Anti-Fraud Procedures

The CSO and Security Department's Anti-Fraud Accountabilities

Off-Site Corporate Facilities

Recruiting Anti-Fraud Professionals

Case Study


Chapter 10 Managing an Anti-Fraud Program


CSO Leadership

Management versus Leadership

Meeting Customers' Expectations

IWC Internal Customers

IWC External Customers

IWC Executive Management Expectations of a CSO

Managing Risk

Security's Vision, Mission, and Quality Statements

Managing the IWC Anti-Fraud Program


Some Aspects to Incorporate into an Anti-Fraud Program Plan



Quality, Process Improvement, and Assessment of Organization Performance

Process Management

Performance Management

Using Technology to Deliver Anti-Fraud Program Support and Services

Managing Quality and Management Oversight

What is Risk Management As It Relates to IWC's Anti-Fraud Program?

Managing and Reducing Risks to Corporate Assets

Program for Managing Anti-Fraud Defensive Risks

Responding to Fraud Incidents

Managing Fraud Threats

Case Study


Chapter 11 Winning through Teaming


Anti-Fraud Program Team Building

Executive Management as Team Members

Teaming with IWC Executive Management Through a Business Approach

Teaming with Corporate Peers

Teaming and Dealing with Office Politics

Teaming with Your Security Managers

Teaming with Your Security Staff

Teaming and Dealing with Satellite Offices in IWC Headquarters in the United States

Teaming and Dealing with Satellite Offices in Foreign Lands

Case Study


Chapter 12 Anti-Fraud Functions


Anti-Fraud Project Team Functional Tasks

Anti-Fraud Functions

Anti-Fraud Program's Non-Security Team Functions and Members

Case Study


Chapter 13 Are We Winning the Battle? How Do We Know?

Measure it!


Measuring an Anti-Fraud Program's Costs, Benefits,

Successes, and Failures

Common LOE Measurement Techniques for Each Function

Examples of Metrics by Function

Investigations and NCIS Metric Chares

Examples of Anti-Fraud Investigations Metrics

Process Measurements

Case Study


Section III: The Fraudulent Future

Chapter 14 What Will the Fraudulent Future Hold for Corporations?


Globalization of Business to Continue

Employees of the Future

The Future Global Corporation

Future of Fraud Attacks on Corporations

Future Anti-Fraud Protection Needs of Corporations

Case Study


Chapter 15 The Impact of High Technology on Fraud


High-Technology Frauds

High-Technology Anti-Fraud Defenses

Case Study


Chapter 16 What the Security and Other Anti-Fraud Professionals Must Do Now to Personally Prepare to Combat Tomorrow's Frauds


Becoming and Staying Proactive and Aggressive in Fighting Fraud

Getting a Fraud Education

Gaining Fraud-Related Certifications


Gaining Anti-Fraud Experience

To Conduct or not to Conduct Fraud Lectures and Write Fraud Articles

Case Study


Chapter 17 Summary and Final Thoughts



Final Thoughts

hat Others Think About the Anti-Fraud Leadership

Position in a Corporation

Toby J. F. Bishop, CFE, CPA, FCA, President and Chief

Executive Office, Association of Certified Fraud Examiners

World Headquarters

In Conclusion-My Thoughts

Some References

End of Line

About the Author



No. of pages:
© Butterworth-Heinemann 2007
27th August 2007
Paperback ISBN:
eBook ISBN:

About the Author

Gerald Kovacich

Dr. Gerald L. Kovacich has more than 40 years of experience in industrial, business and government security, investigations, information systems security, and information warfare, both in the U.S. Government as a special agent, in international corporations, and subsequently as an international consultant and lecturer. He retired as the Information Warfare Technologist, Northrop Grumman Corporation to pursue a career as an international consultant, lecturer and writer.

Affiliations and Expertise

Security consultant, lecturer, and author, Oak Harbor, WA, USA

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