Fraud is a costly problem that can cause financial losses to an organization or individuals. Public entities must be prepared to act when they receive a fraud allegation or notice suspicious behavior. Organizations should also be on the lookout for red flags that may indicate a need for stronger internal controls. The Association of Certified Fraud Examiners estimates that organizations lose five percent of their revenues to fraud each year.
The definition of a fraud case varies by legal jurisdiction, but generally speaking it involves intentional deception to gain something of value. This is usually money, but can be a number of things such as goods or services. Fraud cases can be criminal or civil. Criminal fraud requires prosecutors to prove a defendant guilty beyond a reasonable doubt. In a civil lawsuit, the standard of proof is lower and typically determined by the judge or jury.
When a fraudulent activity is detected, it’s important to investigate the matter thoroughly and document all evidence. This includes written records such as emails or texts, visual records such as photographs and videos and any other sources of information you deem to be relevant. It’s also important to protect physical and digital evidence by limiting access, locking files, and using a case management system with role-based access control.
The nine mandatory elements of a fraud case are as follows: Someone made a statement about an existing fact; that fact was material in nature; the statement was false; the person making the statement knew it was false; they wanted you to rely on the false statement; you did rely on the false statement; and the person or entity caused you monetary damages because of your reliance.
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