Criminal investigative analysis is a tool used by the FBI to identify who has committed a crime “based on an analysis of the nature of the offense and the manner in which it was committed.” Using this tool, an expert can develop a profile of the perpetrator even if they don’t know who they are. The means and methods leave the clues. This tool has been used (and abused) on a number of popular television programs like Criminal Minds and Law and Order: Criminal Intent. Criminal investigative analysis isn’t limited to just tracking down the next Hannibal Lecter—it can be an effective means to capture bad actors in the workplace.
KPMG, the audit, tax and advisory services firm, knows a thing or two about profiling. With more than 23,000 employees working on engagements across 87 offices, KPMG has been confronted with fraudsters, scam artists, criminals and other unsavory characters as part of their client engagements. They, like other accounting firms, are considered a key line of defense against fraud within businesses. Given all of their experience dealing with and discovering fraud, KPMG decided to prepare a profile—similar to what you’d see on TV—of perpetrators committing company fraud.
KPMG analyzed 348 actual fraud investigations they conducted across 69 countries. Despite the broad geographic disparity, there were certain common characteristics among fraudsters that transcend nationality. According to the KPMG study, the “profile” of a fraudster is:
- 36 to 45 years of age
- Works in finance or in a finance-related role
- Is a senior manager at the company where they commit the fraud
- Has been employed by the company for at least 10 years
- Doesn’t work alone but instead in collusion with one or more employees
Just when you thought you could trust your loyal finance guy who’s been with you since the beginning, you read this. The typical motivation for fraud is greed. The study points out that much of the fraud committed in recent years is able to take place because of decentralized structures and weakening internal controls at companies.
It’s important to keep in mind that profiles do not cover every possible type of fraudster and fraud. There will always be exceptions to the rule. But even concentrating on those characteristics and activities that match the profile could prove fruitful. Uncovering fraud—even small fraud—provides a great disincentive for others, even those not matching the profile, to commit a crime. According to the study, the average fraud case in North America cost the victimized companies $1.5 million. If your company is in a precarious financial position a single fraud cause going undetected could lead to disaster.
The complete report is only 28 pages long and available for download at no cost in PDF format. This is one of the most interesting reports I’ve read in a long time and I would encourage you to take an hour and read it.