What does fraud look like, and who is committing it?
According to KPMG International’s Global Profiles of the Fraudster, today’s types of fraud and fraudsters are continually changing, and often camouflaged. The report analyzes fraud investigations in Canada and around the world, and provides insights into the relationship between the attributes of fraudsters, their motivations and the environments in which they flourish.
Misappropriation of assets (including embezzlement and procurement) is found to be the most prevalent fraud. The most common fraudsters are employees of their victim organization. Fraudsters continue to rely on technology and technological advances to perpetrate their crimes. The new generation of swindlers use more technology and have access to much more information than past generations. All of which point to a new era for fraud and illegal activities.
Some characteristics of the typical Canadian swindler include:
- 36 to 45 years of age
- Employed in an executive, finance, or operations function
- Holds a managerial or executive position
- Commits fraud with multiple transactions over one to five years
- Employed in their organization in excess of six years
The survey examines ‘white-collar’ crime investigations, where the perpetrator could be identified and provide detailed contextual information about themselves and their crime.
The different faces of fraud:
- The opportunist: a first-time offender, trusted employee, in a position of responsibility; this perpetrator is often male and married with children, with a non-sharable problem that can be solved by money. The alleged behaviour comes as a surprise to others.
- The predator: someone who seeks out an organization to start a scheme almost immediately upon being hired and deliberately defrauds the organization with little remorse; these fraudsters are less common.
- The colluder: this perpetrator is less common in Canada than many countries around the world; nonetheless just under 50 per cent of Canadian fraudsters still found it tough to go solo and colluded with others. These collaborators are most frequently internal parties working together.
"Ultimately, the fraudster of tomorrow will depend on the opportunities of the day. Two decades ago, illicitly taking money from a bank was accomplished by a closely knit gang using violent methods or forged signatures. Since that time, the ways to commit fraud have been transformed by technology – the internet, smart devices and the ability to analyze vast amounts of data. Companies must be keenly aware of the impact of new technologies on fraud risk. Act pre-emptively and remember that technology not only enables the fraudster, it also enables an organization to defend itself."
“In Canada, many organizations tend to under invest in antifraud defences until required by legislation. It is impossible to predict a crime before it occurs, but by analyzing the constantly changing nature of fraud, we can help organizations stiffen their defences against these criminal activities.”
- John Williams, Partner and National Service Line Leader, KPMG Forensic
Fraudster Report [PDF 1.3Mb]
KPMG on LinkedIn
About the survey
Data was gathered from fraud investigations conducted by KPMG member firms’ forensic specialists in Europe, Middle East and Africa (EMA), the Americas, and Asia-Pacific between August 2011 and February 2013. KPMG analyzed a total of 596 fraudsters who were involved in acts committed in 78 countries. The survey examined “white collar” crime investigations conducted across the regions where the perpetrator was known and detailed contextual information on the crime available. It incorporates the observations and views of KPMG Investigations leaders in 42 countries across the world. The report builds on the similar studies from 2011 and 2007.
KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative (“KPMG International”). KPMG member firms around the world have 152,000 professionals, in 156 countries.
The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.
National Senior Manager, Communications
KPMG in Canada
416 777 8169