Fashioning a Fraud

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Read the case study and map the fraud case to the appropriate expense report fraud flow in Chapter 7 (Exhibit 7.4 or 7.5 or 7.6). In a 2-3 page paper address the following questions: which fraud flow and specific steps did the fraudster manipulate and how will the new processes installed deter, detect or prevent this from recurring? Travel and expense reimbursement schemes may seem like they are an easy fraud to perpetrate, however, the recurring problem is that people wind up getting too greedy and get caught because of it. Lucky for us the fraudster’s greed leads them to get sloppy when they believe that a fraud is going to continue to go undetected. This was the case in the article “Fashioning a Fraud” by Bethmara Kessler. IN this article, Bobbie Jean Donnelly was a fraudster who used Travel and Expense reimbursements to defraud her company. She was an assistant for a design division in a retail corporation. She quickly figured out how to manipulate her travel and expense reimbursements to eventually defraud her company of more than $200,000. Had her company had proper controls in place for travel and expense reimbursements, this probably would have occurred to this magnitude. Donnelly was targeted in an internal investigation because she was one of three employees with the highest amounts of travel and expense reimbursements totaling, $115,000. One of the red flags in the case was the fact that Donnelly’s supervisor had only submitted $40,000 in travel and expense reimbursements that year. It turned out that Donnelly had been using several different schemes to accumulate such an outrageous amount of travel and expense reimbursements. The first of these schemes would be the mischaracterized expense reimbursements scheme. The flow of fraudulent behavior follows Exhibit 7-4 in Wells text. Donnelly incurs a non-business expense such as a personal

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