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Attorney and background check expert Lester Rosen, Founder and CEO of Employment Screening Resources (ESR), will present a session titled ‘Employment Background Checks: Stopping Employee Fraud at the Point of Entry’ on Tuesday, June 19, 2012 from 1:40 PM to 3:00 PM at the 23rd Annual Association of Certified Fraud Examiners (ACFE) Fraud Conference & Exhibition in Orlando, Florida. For more information about the session, visit http://www.esrcheck.com/Newsletter/ESR-Speaks/Employment-Background-Checks-Stopping-Employee-Fraud-at-the-Point-of-Entry-130/.
“Employee fraud is often caused by dishonest and fraudulent employees,” says Rosen, author of ‘The Safe Hiring Manual,’ the first comprehensive guide to employment screening background checks. “An applicant who is dishonest in obtaining a job may well be dishonest once in the job.”
In this intermediate level session, Rosen will help employers and fraud professionals avoid bad hires in the first place by practicing due diligence in their hiring programs and will also cover both best hiring practices and background checks, including the current debate over the use of social media websites and credit reports in hiring. The presentation will conclude with a 25 question ‘Safe Hiring Audit.’
Rosen is a frequent presenter nationally on background check issues as part of the “ESR Speaks” Training Program at http://www.esrcheck.com/ESR_Speaks.php. He founded Employment Screening Resources (ESR) in 1997 and the firm is accredited by the National Association of Professional Background Screeners (NAPBS®). He was also the chairperson of the steering committee that founded NAPBS, a professional trade organization for the screening industry, and served as the first co-chairman.
Employee or “Occupational” fraud is a major concern to businesses. The ACFE 2012 Report to the Nations on Occupational Fraud and Abuse estimates the typical organization loses five percent of revenues to occupational fraud each year. This figure translates to a potential projected global fraud loss of more than $3.5 trillion. The study also found that the median loss caused by the occupational fraud cases was $140,000, and that more than one-fifth of these cases caused losses of at least $1 million.
Some key findings and highlights of the ACFE 2012 Report to the Nations include:
- The frauds reported lasted a median of 18 months before being detected.
- Small businesses suffered the largest median losses due to occupational fraud since they typically employ fewer anti-fraud controls than their larger counterparts.
- Approximately 54% of all fraudsters were between the ages of 31 and 45.
- Males tended to account for roughly two-thirds of all fraud cases, and male fraudsters tended to cause losses that were more than twice as high as the losses caused by females.
- Approximately 42 percent of occupational fraudsters had between one and five years of tenure at their organizations.
- Perpetrators of fraud with higher levels of authority tended to cause much larger losses.
- More than three out of four fraud cases in the study – 77 percent – were committed by individuals working in one of six departments: accounting, operations, sales, executive/upper management, customer service, and purchasing.
- Most occupational fraudsters are first-time offenders with clean employment histories, with 87 percent of occupational fraudsters having never been charged or convicted of a fraud-related offense.
- In the majority of cases – 81 percent – the fraudster displayed one or more behavioral red flags that are often associated with fraudulent conduct: living beyond means (36 percent of cases), financial difficulties (27 percent of cases), unusually close association with vendors or customers (19 percent of cases), and excessive control issues (18 percent of cases).
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