NCJ Number
176085
Date Published
1996
Length
43 pages
Annotation
A total of 2,608 Certified Fraud Examiners (CFEs) contributed details of actual fraud and abuse cases that totalled $15 billion; from this data, this report analyzes four areas: the cost of occupational fraud and abuse, the victims, the perpetrators, and the methodologies.
Abstract
The cases described in this report occurred principally over the last 10 years and represent 12 major industry groups, including government. This 2.5-year study also queried CFEs on the cost, both direct and indirect, of occupational fraud and abuse. The report estimates the average organization loses more than $9 a day per employee to fraud and abuse, and the average organization loses approximately 6 percent of its total annual revenue to fraud and abuse committed by its own employees. Fraud and abuse costs U.S. organizations more than $400 billion annually. The median loss per case caused by males is approximately $185,000; for females, it is approximately $48,000. The report obtained personal information on employees, managers, and executives who committed occupational fraud and abuse. The typical perpetrator was a college-educated white male (men committed nearly 75 percent of the offenses). Median losses caused by men were nearly four times those caused by women, and losses caused by managers were four times those caused by employees; median losses caused by executives were 16 times those of their employees. The victims in the cases reported were organizations, with the most costly abuses occurring in organizations with less than 100 employees. The education industry experienced the lowest median losses, and the highest median losses occurred in the real estate financing sector. Some suggestions for minimizing the cost of occupational fraud and abuse are offered.