Case Study : A Silent Crime – Questions And Sample Answers

Clues of possible fraud being committed

Records at Greene’s store indicate that huge amounts of money are being lost by the store’s shoe department. The store has extremely high rates of return on its shoes, which makes Rooker to suspect an existence of fraud (Wells, 2007, p. 202). There are several “red flags” or clues of possible fraud being committed in the presented fraud scenario, and these clues motivated Rooker to conduct an investigation. Analysis of sales data from ten sales terminals in the Greene’s shoe department reveals a questionable trend. Some credit card numbers are credited for a return of about $ 300 towards the end of every month, and this is only done once a month. This is considered a red flag because it contributes to lack of correspondence in sales recorded for returns, a factor that can be concluded to be the cause of extremely high rates of return on shoes (Wells, 2007, p. 202).

Another clue of possible fraud being committed in the presented fraud scenario is the number of credit cards being credited by Joe Anderson. Joe Anderson credits more than 200 credit cards owned by 110 different people. He credits between $ 2, 000 to $ 3, 000 in returns per week to his acquaintances and even ends up being paid 50 percent of the credit. This is considered a red flag because it is seen as the cause of huge financial losses by the Greene’s shoe department (Wells, 2007, p. 202). Just a day after Rooker installs the video surveillance equipment, Greene’s inventory is overstated by about 17 pairs of shoes due to returns of $ 5,000. Barely six weeks after Rooker starts his in-store surveillance, 100 pairs of invisible shoes are reported to be in stock. The exaggerated inventory is considered a red flag because it has made the Greene’s store to record huge losses of up to $ 30, 000 within a period of six weeks (Wells, 2007, p. 203).

Measures could have been taken to prevent the fraud from being committed or detect it earlier.

The Greene’s store shoe department could have either prevented the fraud from being committed or could have detected it earlier if at all it could have taken appropriate measures. The store could have communicated to all its employees, the consequences of committing fraud. All the employees, including Anderson, could have avoided fraudulent acts in fear of facing the consequences (Wells, 1997).

Additionally, the store could have prevented huge financial losses from Anderson’s deceitful acts by implementing a whistle-blower policy. Whistle-blower policy could have encouraged employees to report any suspected forms of misconduct without fear of being revealed. Everyone in the Greene’s store shoe department was aware that Anderson was doing something fishy, but they could not report him because they were scared. Reporting could have been done earlier enough if the store had a whistle-blower policy in place (Wells, 1997).

The store could have provided a hotline for all employees and for anyone who suspects fraud to report his or her claim. This could have helped it to get information from other people in town who knew about Anderson’s behaviors (Wells, 1997). Again, Greene’s shoe store could have detected the fraud early enough through careful review of unusual and complex financial transactions for all employees. Through this, the store could have detected the amounts of money that Anderson received from his acquaintances (Wells, 1997). The Greene’s store shoe department could have prevented the fraud from being committed by conducting anti-fraud training to all its employees.  When employees are adequately trained about how to avoid fraud, they will try to put the acquired knowledge into practice and keep away from fraud. The workers also become one another’s keeper and provide assistance to their colleagues who might not be aware that they are committing fraud (Zack, 1992-2002).

Why Rooker contacted the Secret Service and involve them in this investigation

The primary investigative mission of the Secret Service is to protect the financial and payment systems of the United States of America. Since 1984, the agency has been investigating crimes involving fraud in financial institutions, illegal electronic fund transfers among other financial-related crimes. Rooker chose to contact the Secret Service when it suspected fraud at Greene’s shoe store department and involved them in this investigation because of the agency’s experience in investigating financial-related frauds (Unites States Secret Service, 2014). Rooker believed that the Secret Service could employ better measures in investigating the fraud as compared to other investigatory agencies, and assist him in apprehending Joe Anderson.

Raising his “fee” from 10% up to 50%

Joe Anderson increased his chances of being caught by raising his fees from 10 % up to 50 %. The move made everyone in town and in the shoe department to suspect his actions. Even Rooker and the United States Secret Service found more clues to support their initial suspicions. It can therefore be concluded that the United States Secret service found more reasons for arresting Joe Anderson after he raised his fees from 10 % to 50 % (Wells, 2007, p. 203).

References

Unites States Secret Service. (2014). United States Secret Service: Investigative Mission. Retrieved, October 12, 2014, from http://www.secretservice.gov/investigations.shtml

Wells, J. T. (1997). Occupational Fraud and Abuse. Austin, TX: Obsidian Publishing Company,

Wells, J. T. (2007). Corporate Fraud Handbook: Prevention and Detection, Second Edition. United States of America: John Wiley and Sons, Inc.

Zack, G. M. (1992-2002). Fraud and Abuse in Nonprofit Organizations: A Guide to Prevention and Detection. Rockville, MD: Nonprofit Resource Center and Williams Young, LLC.

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