1ST NATIONAL FORENSIC CONFERENCE, YAOUNDE, CAMEROON

CONFERENCE PAPER

1^ST NATIONAL FORENSIC CONFERENCE,

YAOUNDE, CAMEROON

Dr.  Richard Mayungbe

E-mail: forensiccameroon@gmail.com

Tel: +23772585428

+2348033467639

Tel: +16462028832

·        Definition of fraud, How Fraud Occurs, Various Fraud Schemes and targets.

Introduction:

It is a great pleasure to welcome all delegates to this brain storming conference aimed at pulling our collective wisdom together in finding effective solutions to one of Africa’s nagging problems, “Fraud and Corruption”

For the next 3 days, we shall be here together on this matter.

Definition of Fraud:

There is no single accepted definition of fraud. It is impossible to provide a comprehensive definition of fraud. Indeed, it may be possible to distinguish between two general types of definition: a general broader one and a criminal narrower one. However, all definitions have one thing in common - an element of dishonesty or deceit.

There are many dictionary definitions of the word 'fraud' each is similar but not exactly the same.

Such expressions as:

·        Unfair advantage by unlawful or unfair means;

·        Knowingly making a false representation;

·        Intentional deception resulting in injury to another person;

·        Something intended to deceive; deliberate trickery intended to gain an advantage;

·        An intentional perversion of truth; deceitful practice or device resorted to with intent to deprive another of property or other right;

·        The intentional and successful employment of cunning, deception, collusion; or artifice used to cheat or deceive another person whereby that person acts upon it to the loss of his property and to his legal injury;

·        The act of leading a person to believe something which you know to be false in a situation where you know the person will rely on that thing to their detriment;

·        A deception, intended to wrongfully obtain money or property from the reliance of another on the deceptive statements or acts, believing them to be true;

·        The intentional perversion of the truth in order to mislead someone into parting with something of value

The specific legal definition varies by legal jurisdiction, but fraud is a crime, and is also a civil law violation.

From the point of view of the criminal law, fraud could be defined as criminal deception, being the use of false representations to obtain unfair advantage or to harm the interests of another.

To deceive is to induce someone to believe that a thing is true which is false, and which the person practicing the deceit knows or believes to be false. To defraud is to deprive by deceit: it is by deceit to induce someone to act to his injury.

Fraud has nine elements:

1.   a representation of an existing fact;

2.   its materiality;

3.   its falsity;

4.   the speaker's knowledge of its falsity;

5.   the speaker's intent that it shall be acted upon by the plaintiff;

6.   plaintiff's ignorance of its falsity;

7.   plaintiff's reliance on the truth of the representation;

8.   plaintiff's right to rely upon it; and

9.   consequent damages suffered by plaintiff.

How Fraud Occurs

Fraud, like other crimes, can best be explained by three factors:

1) A supply of motivated offenders;

2) The availability of suitable targets;

3) The absence of capable guardians or a control system.

When economic climate declines, it is likely to raise the risk of fraud. As individuals and companies suffer financially, more people may be tempted to cross the line of legality and engage in fraud to maintain the lifestyles they had enjoyed during better times. Imagine the pressures that may be on individuals stagnant earnings, no bonuses, stiff competition, irresponsive governments,  the possibility of job losses – all of these, and more, increase the likelihood of an individual and even organisations  to commit fraud.

Smaller business are overall more susceptible because they generally don’t have as many people in place to separate job functions and put controls in place. The culture is usually open and trusting. Layoffs have caused even more holes to exist. Potential fraudsters may find plenty of opportunities to launch their schemes.

Some of the Ways Occupational Fraud Occurs include:
-Skimming cash receipts
-Falsifying expense reports
-Forging or tampering with company checks
-Falsifying pay roll records
-Falsifying bills and invoices
-Stealing cash –Larceny
-Stealing other physical assets
-Stealing intellectual assets and information
-Corruption
-Financial statement fraud

Various Fraud Schemes and Targets

Fraud is as numerous as the languages under the sun! Let us compile the most popular ones taking our source from the Association of Certified Fraud Examiners 2012 Global Fraud Study:

Occupational Fraud – This type of fraud falls into 3 categories viz:

• Asset misappropriation schemes, in which an employee steals or misuses the organization’s resources (e.g., theft of company cash, false billing schemes or inflated expense reports) The targets here are the employers, private or public.

• Corruption schemes, in which an employee misuses his or her influence in a business transaction in a way that violates his or her duty to the employer in order to gain a direct or indirect benefit (e.g., schemes involving bribery or conflicts of interest) The targets are internal and external clients of the organization

• Financial statement fraud schemes, in which an employee intentionally causes a misstatement or omission of material information in the organization’s financial reports (e.g., recording fictitious revenues, understating reported expenses or artificially inflating reported assets) The targets are shareholders, the investing public, banks and financial institutions, suppliers, customers, inland revenue, and many other stakeholders.

BANK FRAUDS
See  the comments of Ambassador Jackson of the US Embassy, Yaounde on: http://yaounde.usembassy.gov/sp_032213.html 

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