The economic downturn has created a welcoming environment for fraud, according to global risk consultancy firm Kroll Inc.
The firm, which specializes in financial investigations, issued a report this week pointing to the bailout and stimulus programs as prime targets for illegal activity.
"Those impacted by the economic instability who are inclined to engage in fraudulent business practices will work to secure stimulus funds by any means possible," said Blake Coppotelli, a senior director in the firm's business intelligence and investigations practice.
With so much money circulating due to the stimulus package and the Troubled Asset Relief Program, there are many opportunities for greedy, and sometime desperate, people to cut corners or defraud clients and employers, the firm said.
Kroll pointed to fraudulent minority- and woman-owned companies as prime examples. Many public-works projects give special consideration to such firms, and there are temptations for companies to create sham ownership structures in order to qualify.
"Many companies will want to take a closer look to ensure that the competition is not using a false claim of minority or woman-ownership to gain and unfair advantage," said Kroll director Mark Skertic.
Infrastructure projects, which make up a large part of the stimulus package, already have a notorious history of corruption, the firm said.
In the case of the banking bailout, the more details the United States and other countries disclose, the less chance there is for fraud, said Robin Hodess, director of policy and research for Transparency International.
"We want government to come clean on the decisions being taken in terms of what companies are being bailed out," she said in an interview with Kroll. "Which companies are being supported and what they are doing with the money are issues that need to be made clear."
The firm, which specializes in financial investigations, issued a report this week pointing to the bailout and stimulus programs as prime targets for illegal activity.
"Those impacted by the economic instability who are inclined to engage in fraudulent business practices will work to secure stimulus funds by any means possible," said Blake Coppotelli, a senior director in the firm's business intelligence and investigations practice.
With so much money circulating due to the stimulus package and the Troubled Asset Relief Program, there are many opportunities for greedy, and sometime desperate, people to cut corners or defraud clients and employers, the firm said.
Kroll pointed to fraudulent minority- and woman-owned companies as prime examples. Many public-works projects give special consideration to such firms, and there are temptations for companies to create sham ownership structures in order to qualify.
"Many companies will want to take a closer look to ensure that the competition is not using a false claim of minority or woman-ownership to gain and unfair advantage," said Kroll director Mark Skertic.
Infrastructure projects, which make up a large part of the stimulus package, already have a notorious history of corruption, the firm said.
In the case of the banking bailout, the more details the United States and other countries disclose, the less chance there is for fraud, said Robin Hodess, director of policy and research for Transparency International.
"We want government to come clean on the decisions being taken in terms of what companies are being bailed out," she said in an interview with Kroll. "Which companies are being supported and what they are doing with the money are issues that need to be made clear."
published April 2, 2009, 1 Comments
In these modern times, a key way to fight corruption is to recover and examine e-mail records after-the-fact. E-mail is a boon to investigators. --Ben