ACCT 572 Week 4b Investigating Fraud Discussion
Analyzing the Perpetrators (graded)
Lets take a look at Chapter 7, Internet Assignment 1, on page 230 about the McDonalds Monopoly game and discuss how the perpetrator was caught. Why did the FBI choose surveillance to catch the perpetrator? Was the FBI successful? Was there another way to catch the perpetrator?
1. In August 2001, it was discovered that the McDonalds Monopoly game was a fraud. Simon Marketing, which ran the game on behalf of McDonalds, was responsible for the fraud. During the investigation to uncover the fraud, the FBI used several different forms of surveillance. Using the Internet, find newspapers and other sources of information that describe these forms of surveillance and then answer the following questions: a. How did the FBI use surveillance to gather evidence regarding Simon Marketings illegal activities?
b. Were the surveillance methods used by the FBI effective?
c. If you were in charge of the McDonalds investigation, what other methods of surveillance might you have used?
What would you do as the auditor in the situation described in Chapter 9, Case 2, on pages 266267? How would you handle this situation?
Case 2
You are auditing a bank, and someone provides you with an anonymous tip that an employee is embezzling money from the bank. You decide to investigate the allegation.
Your interviews with other bank employees confirm that the suspected embezzler has been acting very strange lately. Some employees have seen the employee crying in the bathroom and acting strange in other ways. The bank recently downsized due to poor economic growth, yet the suspect recently bought a new Lexus.
Based on some helpful hints from bank employees and through your own investigation, you discover that the mortgage taken out by the suspect three years ago for his personal home has recently been paid in full.
After calculating the suspects net worth, you determine that he has about $249,000 in income from unknown sources this year alone.
1. What are possible explanations for why the suspect (1) is experiencing emotional changes and (2) has had an increase in unknown income?
2. Can you conclude from these facts that the suspect has indeed been committing fraud?
1. Would you be suspicious of the employee discussed in Chapter 9, Case 5, on page 267? Why or why not? Would you be concerned?
Case 5
You manage a car dealership in a large city. Many of your sales employees are very successful and have purchased their own vehicles from your dealership. Your dealership finances the sale of some of these vehicles. One employee recently paid off the balances on a couple of new vehicles purchased from your dealership. You discover this information after investigating complaints from customers about this particular employees actions. His sales are down, and customer complaints about his attitude abound. He previously worked for two other car dealers, both of which were satisfied with his performance. This employee is in charge of having used cars reconditioned by various automobile repair shops.
1. What signs of unusual behavior and lifestyle symptoms are present in this case? What are some possible causes for them?
2. How might this employee be defrauding the company?