DFK UK & Ireland

The growing threat of e-Crime

The growing threat of e-Crime Forensic accountants are regularly involved in revealing frauds and working out how they were carried out. In order to do this they often need to analyse vast amounts of information, enabling them to tie anomalies in the accounts into actual fraudulent actions.

Data mining is a technique commonly carried out by specialist e-crime and fraud teams working hand in hand with forensic accountants on fraud cases.

Experts use computer intelligence to interrogate data, such as payroll records, to identify and highlight areas of discrepancy that could be linked with fraud.

Dr Stephen Hill is Head of The Fraud & Forensic Group at Chartered Accountancy firm Chantrey Vellacott DFK LLP. He has a data mining capability within this group that works to expose fraudsters.

He said: “We use software with interrogation tools and then run simple checks on databases. For instance we may analyse a payroll at a large organisation such as a government sector body. We cross reference to see how many staff are employed within the organisation
and how many bank accounts are, for example, being paid, to identify unusual trends.

Sometimes people will have one or two accounts in the same name, being paid three or four salaries. This sort of thing may not be picked up by the client’s accounting system or their normal management controls.”

He added: “People believe this type of data analysis is expensive, but large companies have saved six figure numbers on staff identified
in corrupting the system.”

Dr Hill says the biggest area of work for his team at the moment is in fraud prevention, as companies increasingly realise the benefits of preventing fraud before it occurs.

He said: “We are really busy in terms of implementing policies and procedures and putting controls in place. The biggest interest is in reviewing systems and controls, and providing adequate fraud awareness training, so that our clients don’t get caught out. Organisations realise that the people they employ could easily get caught up in the recession. They all have day to day living expenses and they aren’t getting the bonuses they have become accustomed to, so they may be tempted to find other ways of subsidising their personal lives. The Square Mile is the biggest area of activity for Dr Hill and his team, as the big banks crack down on potential fraud in the economic downturn.

He added: “There is more money going through the Square Mile, than any other financial district in the world, it’s a great target and there are a lot of criminal gangs making it their business to collude with people working within financial institutions in terms of getting money out. It’s less messy than robbing a bank, as there are people on the inside with know how, access and data.”

Part of the fraud team’s job is to train staff in the methods used by fraudsters and to remove fraud opportunities through a process called ‘barrier management.’

Dr Hill said: “I have been working with a number of financial institutions in the City recently; it is very clear that any staff caught involved in fraud will be prosecuted. The key thing is data, if people are doing things out of office hours or arouse any suspicions, organisations can monitor how much (if any) data is leaving that system. Many banks are barring USBs, they are also removing data mediums, replacing units with ‘dumb’ terminals with no way of connecting mobile storage devices. Banks are also closely monitoring and reviewing policies on remote working and wireless technologies.”

For further information please contact Dr Stephen Hill, Head of the Fraud & Forensci Group at Chantrey Vellacott DFK on 020 7509 9000 or at shill@cvdfk.com

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