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Corporate Fraud During COVID-19: What Business-Owners Need to Know

Indeed COVID-19 has sent our communities into a tailspin, and it seems as though every few months businesses are forced to adjust, innovate, and pivot in response to new regulations or restrictions. Not only are businesses struggling to meet the needs of their consumer base, but many are dealing with internal struggles too, as corporate fraud rates skyrocket amid the pandemic. In 2020, Deloitte  published a report confirming the public health crisis had provided a “fertile ground for fraud”, and provided some guidelines on how businesses should be asking the right questions to proactively spot fraudulent activity early, before the financial impacts are severe.

Unfortunately, as we move into 2021, we are still burdened with many of the obstacles that plagued communities and corporations in 2020. COVID-19 infection rates remain high, government restrictions are tightening once again, and according to Toronto’s leading Corporate Investigation Team, corporate fraud rates have not softened.

In the post below, we’re exploring a few of the most reported instances of corporate fraud during the pandemic, and how Star Quality Private Investigations has been helping corporations and business owners identify and eliminate risks to their success of their business operations.

 

Remote Working Situations

Undeniably, the shift to a fully remote work environment has not been completely seamless for some businesses, particularly those that are accustomed to a high level of oversight of their employee activities and projects. Many business owners or managers are not only hiring Private Investigators to perform surveillance on employees suspected of abusing company time, but businesses are also trying to track down remote workers presumed to be stealing or misusing sensitive company data. Many businesses are finding that due to the uptick in the number of COVID-19 related layoffs over 2020, some remote workers have been found to be copying sensitive client lists, pricing calculations, or other propriety information, in the event that they too are let go.

“Our shift to a remote working environment seemed to happen so quickly, that we didn’t have the opportunity to thoroughly test and triple-check that our protection and data controls were airtight while operating in this new set-up. So, there is a constant cloud of concern and uncertainty right now as to whether our data is indeed staying within our organization.”

–        Steve S, Toronto Business Owner

 

Reduced Oversight

COVID -19 has for many organizations weakened or eliminated the “eyes on the ground”. With more employees working in different locations, or with shifts being adjusted to limit the number of people in direct contact, the normal chains of command have also been adjusted. In some situations, this has led to reduced oversight within operations, and asset misappropriation has become a leading fraud concern for corporations. This includes:

–        The payment of invoices without the appropriate approvals

–        Theft of cash or products stored within warehouses

–        Payment of bribes on behalf of the company

–        Use of third parties that have not been properly vetted or screened

Due to process changes, reduced oversight, and the need to expedite workflows to quickly obtain products during the pandemic, the opportunity arises for “fake vendors” to be added without detection, allowing fraudulent payments to flow out of the company.

 

Digital Approvals

With a remote working environment in place, many corporations have had no choice but to pivot to the use of digital signatures on company documents. Despite the ease and wide use of this technology, it has also made it easier for corporate fraudsters to falsify signatures on reports, orders, or contracts.

Interestingly, the Star Quality Corporate Investigation team has even uncovered e-signature fraud committed by top level executives, with business partners found to be stealing from the company during this pandemic-induced time of uncertainty. This proves that businesses can be at risk of fraud at every level of the organization, which is why it is integral to have widespread controls in place to proactively prevent against these losses.

 

How Can Toronto’s Corporate Investigators Help?

As Toronto’s leading team of Corporate Investigation Experts, Star Quality Private Investigations has been working closely with small, medium, and Fortune 500 businesses throughout the pandemic period to help isolate sources of fraudulent activity and decrease their risk of further misappropriation of company time or assets. We approach each client case differently, developing a completely customized approach that delivers the answers you’re looking for – as quickly as possible.

We are also proud to work closely with organizations of all sizes working as your Undercover Boss, helping companies identify potential areas of risk, and develop solutions for improving the overall operations of your business.

We understand how hard you’ve been working during this unprecedented time, so our Corporate Investigation Experts will do everything they can to help you drive your business through COVID-19 with greater resilience, confidence, and clarity.

 

Source: file:///C:/Users/RVanAndel/Downloads/deloitte-ch-fa-covid-19-operating-in-the-new-normal-fraud-risk.pdf

Forced work from home. A young woman is bored working from home, she laid her head in her hands. Its hard to self-discipline when working remotely