Forged endorsement Authorized maker schemes Forged schemes Altered payee schemes Concealed check schemes schemes How is fraud perpetrated:? How is fraud perpetrated:? How is fraud perpetrated:? How is fraud perpetrated:? How is fraud perpetrated:? Intercept company check intended Intercept company check Very blatant, not very Very difficult to defend Employee forges name of authorized signer for third party intended for third party common against: This check is already Change name of payee Employee prepares check Fraudulent checks written by objective is to obtain a created by normal payment Method depends on who payable to self Employee with check-signing blank check processes. prepared the checks Gives check to authorized authority Employee usually has access to Employee doesn’t need signer along with stack of Cash, pay personal bills, etc. blank checks access to blank checks Checks prepared by Employee: legitimate checks Where controls prevent signer not Bookkeeper, a/p clerk, Convert check by forging White-out payee name Check gets signed; signer from handling blank checks or office manager, etc. endorsement On” (I.R.S. not paying attention, trusts bank statements, Employee “Tacking Other methods to obtain Using fake ID if possible. becomes I. R. Stevens) Employee. uses influence to override checks Set up a new DBA controls Checks not secured Intercepting the check: account in this Employee wrongly obtains Employee’s duties involve name at a local key, combination, handling signed checks bank. password to gain access Signed company checks Checks prepared by the Employee Voided checks not not secured Employee obtains destroyed Checks given back signatures on blank checks How to destroy? to employee who (Employee highly trusted) Print counterfeit company prepared them sign a few checks “Just checks Normally a and I’ll be able to pay the “trust” violation bills while you are on this and I’ll vacation / away of “Sign send it out” business/ …” Checks returned to Check typed or written in company (incorrect erasable ink (WHAT!) address) Employee gets authorized person to sign
Forged schemes Forged endorsement schemes Altered payee schemes Concealed check schemes Authorized maker schemes How is fraud perpetrated:? Employee forges name of authorized signer objective is to obtain a blank check Employee usually has access to blank checks Bookkeeper, a/p clerk, office manager, etc. Other methods to obtain checks Checks not secured Employee wrongly obtains key, combination, password to gain access Voided checks not destroyed How to destroy? Print counterfeit company checks How is fraud perpetrated:? Intercept company check intended for third party This check is already created by normal payment processes. Employee doesn’t need access to blank checks Convert check by forging endorsement Using fake ID if possible. Intercepting the check: Employee’s duties involve handling signed checks Signed company checks not secured Checks given back to employee who prepared them Normally a “trust” violation “Sign this and I’ll send it out” Checks returned to company (incorrect address) How is fraud perpetrated:? Intercept company check intended for third party Change name of payee Method depends on who prepared the checks Checks not prepared by Employee: White-out payee name “Tacking On” (I.R.S. becomes I. R. Stevens) Set up a new DBA account in this name at a local bank. Checks prepared by the Employee Employee obtains signatures on blank checks (Employee highly trusted) “Just sign a few checks and I’ll be able to pay the bills while you are on vacation / away of business/ …” Check typed or written in erasable ink (WHAT!) Employee gets authorized person to sign How is fraud perpetrated:? Very blatant, not very common Employee prepares check payable to self Gives check to authorized signer along with stack of legitimate checks Check gets signed; signer not paying attention, trusts Employee. How is fraud perpetrated:? Very difficult to defend against: Fraudulent checks written by Employee with check-signing authority Cash, pay personal bills, etc. Where controls prevent signer from handling blank checks or bank statements, Employee uses influence to override controls
Check_Tampering_Chart.docx