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Correct parking
slip
Let’s check –
11/05/2015 CA. Gopal Singh Negi
Let’s check –
1.Details :address
2.Authorized By
3
Forge slip
Missing elements
11/05/2015 CA. Gopal Singh Negi 4
Lets discuss : How to prevent it
Its not matter of parking Fee, Rs 20/40/50
its your car : worth X Amt
Use in Anti national Activity
With this………
lets start the session………
Hope fraud is clear to all with live example : Car
Parking.
Q1. In this class , How many of us recognize fraud exist ? Lets have
11/05/2015 CA. Gopal Singh Negi
Q1. In this class , How many of us recognize fraud exist ? Lets have
poll.
•Yes
•No
•May be
5
If opinion of House is :: Yes then let examine
How People React :
Q. 1. Our people would not commit fraud
Ans: you cannot vouch for all of your employees
Q. 2. Fraud could not happen to us – we are a stable organization.
Ans: - fraud risks are everywhere
11/05/2015 CA. Gopal Singh Negi 6
Q3 . We would know if fraud occurred – we watch vulnerable areas.”
Ans: fraud prevention activities often are not aligned with risks that matter
Q4. If fraud occurred, it would be discovered quickly.”
Ans : individual fraud detection mechanisms have limitations
Q2. How many of us are aware about different type of fraud ?
Lets have poll !!
•Yes
•No
•May be
11/05/2015 CA. Gopal Singh Negi 7
For Fraud Prevention , We must Aware about different types of
Frauds
Take away of Session : (ROI ): ----- Save Guard Against Frauds &
Pre vention
Let’s divide fraud cases
Corporate / Bank etc Normal people 125 Cores of Indian
* Data generally not available
Reason :-
*Data provided by ACFE: 7% of
Industry Turnover (ACFE 2008
Report)
* Publically reveal cases
11/05/2015 CA. Gopal Singh Negi
Less or no FIR
Court procedure : How long it
takes :
What about small and
Unrevealed case ??
•Prestige /Goodwill issues
•Legal Formalities
•Time Consuming
8
Reason of Fraud ?
Human behavior : Victim Side
Greed Fear
These emotions are not new in human
history
Check Ramayana !! Mahabharata !!
Over
Trust
11/05/2015 CA. Gopal Singh Negi
fraud Triangle Hope this Covered earlier !
Check Ramayana !! Mahabharata !!
•Greed
•Fear
•Over Trust
9
Fraudster
Now Question Comes in Mind How to save !!
Step 1 – Awareness: What happening in our Society
Modus operndi (Way of doing)
Step -2 – Prevention from Such Fraud in
case of Company / Public
1st : Cases in
Public domain
2nd: How
11/05/2015 CA. Gopal Singh Negi
case of Company / Public
Public Corporate / Big Houses
1. Code of Conduct for Employee
2. Expert to help
3. Case law
4. Governing Body
5. Whistle blower Policy
1. Rules /Act
2. Govt Body
Lets see, How effective are
??
10
2 : How
to Prevent
3rd : Examine -
current Process
PRIVATE CAR PACKAGE POLICY PREMIUM CALCULATOR
Date: 09-May-15
Insured Name: Mr. Gopal
Vehicle & Coverage Details
COVERAGE Vehicle Details
IDV for Vehicle 573300 Car Make & Model Corolla
IDV for Non - Electrical Accessories
IDV for Electrical/Electronic Accessories Engine Cubic Capacity
Total IDV 573300.00
Vehicle fitted with Anti Theft Device Yes PA Cover to Paid Driver Yes
TPPD cover above 6,000/- Limit Yes
Wider Legal Liability to Driver Yes
Voluntary Deductible (in Rupees) No
Premium Computation Table
Own Damage Premium Rupees Liability Premium Rupees
- Vehicle Basic Premium 19721.52 - Liability Premium 2500.00
- Non Electrical Accessories Premium - Extended TPPD Premium
0.00
How we Take
insurance
for ourselves
and
Company
How many of us
11/05/2015 CA. Gopal Singh Negi
- Non Electrical Accessories Premium - Extended TPPD Premium
- Electrical Accessories Premium 0.00 - Bi-Fuel Unit Liability Premium
- Bi-Fuel Unit Premium 0.00
- Agent Discount (60%) 11832.91
- Anti Theft Discount
0.00
- Inbuilt PA Cover to Owner-Driver
100.00
- Voluntary Deductible Discount - LL to Employees
- AAI Discount-0.00
- PA Premium to Paid Driver 25.00
- No Claim Bonus(0%)
0.00
- PA Premium to Unnamed Occupants
Gross OD Premium 7,888.61 Total Liability Premium (B)
2,625.00
Total OD Premium (A) 7,888.61 Total Premium (C) = (A+B) 10,514
Service Tax @ 12.36% (incl Edu. Cess)
1,299
Total Amount Payable 11,813
12
How many of us
examine Quote
/
Cover Note ?
Prevention
Property Fraud : Corporate & Public Modus Operandi:
1.Hacking of Delhi
Revenue Dept
website
2.Forge Papers
11/05/2015 CA. Gopal Singh Negi 14
Prevention :
1. Validated
copy from
Department
in written.
2. Get vetted
papers
Learning for All : GREED
Property Fraud : Corporate & Public
Again same case in different name
and Location
Modus Operandi:
1. Making duplicate website
2.Forge Papers
11/05/2015 CA. Gopal Singh Negi 15
Prevention: Have we used
earlier learning
2.Forge Papers
GREED
Employment Frauds ….
Prevention Techniques
1. Check offer letter
2. Mail id
3. Get Validate
11/05/2015 CA. Gopal Singh Negi 16
Victim :
1. Public
2. Company (Govt or Private)
Like Railways / Big Fortune
Face book Fraud : ----
Greed
Prevention: Please check ,
other person is genuine
How many of
us take Bank,
11/05/2015 CA. Gopal Singh Negi 17
us take Bank,
RBI, IRDA mail
/SMS seriously
Learning from
here is:
1.MOA / AOA
2. Common Seal
3.Deed
4.Important
Documents
This can't be detected
in general
11/05/2015 CA. Gopal Singh Negi 18
Documents
5.Letter Heads
Where and How we
KEEP !!
Lets assume its your client case :
Q1. How u will check if client doest share or
Q2 Client himself not aware about it
Even Travel is not safe …….
Greed
1. Cheap Travel
2. High inventive
11/05/2015 CA. Gopal Singh Negi 19
Prevention :
1.No free lunch exit in this
world.
2. How any one can sell,
below actual cost
Greed : Short cut
International standard &
Rule not so easy to
influence.
11/05/2015 CA. Gopal Singh Negi 20
Prevention : check
before action
RBI Plan ……
In Actual
Update & Revalidate
Policy faster then
criminal
Learning
11/05/2015 CA. Gopal Singh Negi 21
This Learning can be used in
Corporate…. Against Frauds
Bank Property Frauds
Loan on Commission:
Real Fact
11/05/2015 CA. Gopal Singh Negi 22
Dena bank : FD Scam
Q. For House
Do we really learn from
such cases ?
Charity Frauds: Do Charity But check.
Are we helping needy or fraudster ??
11/05/2015 CA. Gopal Singh Negi 23
Stories : let see (AAP BITI)
How it happen !!
Fraud Prevention ::-
1. Case study : Restaurant / Shopping mall Swapping
Skimming
2. Email (bank) : phishing attack
3. https// vs. http
4. Website
What about loss to Seller :: let’s discuss .. (Online Portal )
How Credit Card Fraud affect –
customer and Company
11/05/2015 CA. Gopal Singh Negi 25
What about loss to Seller :: let’s discuss .. (Online Portal )
Kingfisher / Shoppers Stop.
high alert : Country
1. Belarus 2. Russia 3. Pakistan 4.Nigeria 5.Egypt 6.ColombiaRed Flag Analysis: Fraud Prevention method: ----
1. High Value Overseas Transaction2. Deliveries are picked up by 3rd Parties3.Next day delivery4.IP Address Profiling 5. Alters the delivery address at short notices6. Suspicious address : other customer address / guest house or hotel.
Credit Card Frauds ::
Purchase by Credit card
normal routine
Where is Problem ??
Providing payment gateway services
11/05/2015 CA. Gopal Singh Negi 26
Providing payment gateway services
without detail checking
Loss to country, people & Bank.
TIM TARA Case Prevention:
Below Cost Selling is not possible
in general
11/05/2015 CA. Gopal Singh Negi 27
Lets make Money in Share market ::
Greed to make
money faster Bank FD / Mutual fund /
Share Market : Rate of Return
11/05/2015 CA. Gopal Singh Negi 28
ATM /Debit Card !
You lose money first and then lose the legal battle.
Fake ATM Fraud
Shoulder surfing
How we act in Public.
11/05/2015 CA. Gopal Singh Negi 29
Fake pin pad
Corrupt Employee : Bank staff – Mr. Gopal
withdrew money from ICICI Atm and forget
card. Call made and collected info
Dumpster Diving :
Bank Customer warned
Open invitation for
Fraudsters…….
11/05/2015 CA. Gopal Singh Negi 30
Bank Customer warned
not to discard mini statement
from ATM in the Bins
provided at cash machines
Social Media FB / Mobile…………
• FB Effect : sharing every thing over FB: Mood,
• Whats up :: Recent Election.
Prevention : How many
application on your mobile ??
Applies to Public & Company as well
11/05/2015 CA. Gopal Singh Negi 31
• Mobile Banking : A Pune based
CA firm duped for 79 lakhs. Someone hacked their
online banking account through hacking Mobile
of its partner. Take care while using your banking
via mobileThis can be happen with us also
Theories to fight frauds against the Companies : -
1. Broken Window Theory
If some loophole is the system is kept
unrepaired.
* Non Broken window acts as the
deterrent factor
•Don’t let the employees know of the misdeeds of the management
Let’s Prevent Fraud at Industry
level
11/05/2015 CA. Gopal Singh Negi 34
2. Video Game Theory : Step by step
•Don’t let the employees know of the misdeeds of the management
•Ethical tone of Management
• modus operandi is spread in other employees
•When some employee is caught – he reacts “Why me” ??
Take action at early stage : otherwise small will turn
big
Lays Potato chips Theory
-Bet you can’t eat just once
-Fraudsters can’t stop by doing single Fraud.
-Additional income that generate out of frauds
Increase their needs and greed's.
-Greed forces them to become perpetual fraudsters
-Employees committing the frauds do not view themselves
as criminals.
11/05/2015 CA. Gopal Singh Negi 35
Characteristics Theory
Trust but check : Trusted person do more frauds
Trusted employee but not satisfied
1. Person living beyond means
2. Emotionally disturbed /unstable
3. Poor self control
4. Secretive about his personal affairs
Fight Frauds :: Prevention
1.Education to staff
2. Setting Tone of Management
- Creating Anti Fraud Environment
- Zero Tolerance level
-Bribery
-Assets misappropriations
11/05/2015 CA. Gopal Singh Negi 36
- Zero Tolerance level
3. Pro active preventive technique
-Internal control
-Risk assessment
-Fraud prevention policy
-Ethical policy
-Whistle blowing Policy
-Fraud Response Plan
How to make Fraud Prevention effective: -
1. Anti-Fraud and Corruption Hotline
2. Protection of Whistle-blowers :: imp case of Ranbaxy
3. Ongoing Maintenance and Review of policy and process
Standard Process.
11/05/2015 CA. Gopal Singh Negi 37
Fraud Prevention Policies ::
Check :
1. Does the policy set out the company's tones towards client entertaining and
gifts and what action needs to be undertaken on receipts of these ?
2. Does the policy Quantify what constitutes fraud or dishonesty ? For Example ,
an overstatement of expenses by Rs. 5 might not be considered to be fraud
but continuously over claiming expenses by Rs 5 might be considered as Fraud.
3. Does the policy distinguish between the seriousness of different frauds and
11/05/2015 CA. Gopal Singh Negi 39
3. Does the policy distinguish between the seriousness of different frauds and
the reaction of managements according to the seriousness of frauds ?
Low Warning , if repeat action
Medium Refer to Committee
High Immediate action
Question:
What
Value
4. Does the policy include a statement in respect to conflicts of interest ?
Preventing Fraud:
1. Management Philosophy : In Actual or over net
Boss action repeat by Juniors
2. Follow rule /Policy in actual
a). Superior Accounting System : - login id / Password
in actual :
(Bank- Password sharing is crime)
•Own office
How we
implement
and follow
11/05/2015 CA. Gopal Singh Negi 40
•Own office
•Company / Industry.
b) Proper documentation :
Case : Bill process of advertisement for X no of Copy, copy of ad is
attached.
c) Safeguard of Assets : coding for Big items : Fixed Assets Register
Once in year : Counting & verification
5. What polices are in place to inform customer / suppliers / employees that a code
of Conduct is in operation?
Lets check Use of Policy in below : Q.
1. Overstatement of Expenses in daily life by staff…
Peon – office expenses / Travel Allowance / Daily Allowance
2. Personal Expense in Business
Satyam is
Fraud but
here??
Practically
11/05/2015 CA. Gopal Singh Negi 41
2. Personal Expense in Business
Owner ?
Staff ?
3. Usage of Office Stationery / Equipment: like : Car/ System /Phone
Owner ?
Staff ?
4. Expenses paid through cheques and receipts in cash
Practically
we daily
face
Telecom Industry :
Pre Paid & Post paid Card
How verification in actual done Post Paid card issued to person
not capable of paying bills.
Either refuse to pay or sell to
anti national
Collection Agency % increase in case of Old case
How it
implement
in actual,
that matter
11/05/2015 CA. Gopal Singh Negi 42
Banking & Financial : KYC norms, publish still Penalty by RBI in recent month
In Actual : Plans / procedure like safety belt :-
Mgt
review:
14.6%
Internal
Audit :
14.4%
11/05/2015 CA. Gopal Singh Negi 43
14.4%