Switzerland

Details

  • Type: Press release
  • Date: 11/26/2013

The average fraudster is male, 36 to 55 years old and an insider 

A new forensic study conducted by KPMG has compiled a profile for the typical fraudster: the result was a male who has worked in the company for over six years and acts in concert with other offenders. Typical perpetrators are between 36 and 55 years of age and work either in executive management or staff functions such as finance, sales and marketing. They are increasingly taking advantage of the opportunities offered by new technologies.
For some time now, fraud specialists have been trying to define the profile of a typical fraudster to improve the chances that, some day, these perpetrators will be caught in the act. In this context and within the scope of the “Global profiles of the fraudster” study, KPMG gathered data from forensic specialists in the Europe, Middle East and Africa, North and South America as well as Asia-Pacific regions. Information from concrete investigations of cases of fraud that took place between August 2011 and February 2013 formed the basis of this study. A total of 596 fraudsters, involved in acts committed in 78 countries, were analyzed.
The typical fraudster

The data gathered was used to draw up a specific profile of a fraudster. An average offender displays the following characteristics:

  • male
  • 36 to 55 years old
  • works in the company he victimizes
  • works either in executive management or staff functions such as finance, sales and marketing
  • belongs to senior management
  • has been employed at the company in excess of six years
  • acts in concert with others

Multiple offenders and multiple transactions

An analysis of the 596 fraud cases revealed several different characteristics shared by these fraudsters and their modes of operation:
  • Age: 70% of fraudsters are between 36 and 55 years of age.
  • Employment: 61% of fraudsters are employed by the companies they victimize. 41% of offenders worked there for more than six years.
  • Collusion: In 70% of fraud cases, the offender acted in collusion with others.
  • Type: The most common types of fraud are misappropriation of assets (56% of cases), embezzlement (40%) and procurement fraud (27%).
  • Financial damage when acting alone: When fraudsters acted alone, 69% of the cases were perpetrated over the course of one to five years. Of these, 21% caused financial damage of USD 50,000 to 200,000 and 16% caused between USD 200,000 and 500,000 in damage. In 32% of these cases, the financial damage exceeded USD 500,000 and even USD 5,000,000 in 9% of the cases.
  • Financial damage when acting in collaboration: When fraudsters acted in collaboration, 74% of the cases were perpetrated over the course of one to five years. The frauds committed had a total value of USD 50,000 to 200,000 in 18% of the cases. In 43% of these, the financial damage exceeded USD 500,000 and even USD 5,000,000 in 16% of the cases.
  • Mode of operation: 93% of frauds were committed in multiple transactions. For 42% of these cases, the average value per transaction was between USD 1,000 and 50,000.
  • Timeframe: 72% of all frauds were committed over a period of one to five years.

Cybercriminals are usually employees

New technologies have created novel types of fraudulent behavior and helped open up new opportunities for fraudsters.

 

  • Most cybercrime occurs by means of infecting computer systems with malware, attacks on computer networks and similar acts.
  • Cybercriminals are largely employed by the organizations they victimize, mainly in IT, but also in areas such as finance and operations.
  • 67% of fraudsters who commit cybercrime acted in collusion with others who were also employed by the victim company in most cases.
  • The motivation behind hackers’ attacks is shifting increasingly from political to financial objectives.

High level of trust increases the risk

In many of the cases analyzed, employees were unaware of the compliance risks they expose their company to when they pay bribes. They mistakenly believed that they were acting in their company’s best interest. In other cases investigated, a person’s financial situation was the main motivation behind fraud committed by members of a company’s executive management or staff. Yet the criminal act was more frequently prompted by greed or a desire for greater recognition rather than the desire to survive.

 

“Typically, a person commits fraud to fund an extravagant, or at least very comfortable, lifestyle. We seldom see people turn fraudster to make ends meet,” says Anne van Heerden, Head of Forensic at KPMG Switzerland. “Plus, in Switzerland we have a culture of trust. Many corporate cultures are infused with a sense of community and family – yet that is also precisely what increases the risk of fraud committed by an insider. After all, fraudsters are usually a member of senior management or an employee considered to be trustworthy.”
 

Simone Glarner

Simone Glarner

Head of Media Relations

+41 58 249 55 71

Global profiles of the fraudster

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This report contains KPMG’s analysis of 596 fraudsters member firms investigated between 2011 and 2013.

Forensic

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Reputation is key. Crime is unacceptable. Two simple principles that drive our Forensic specialists.