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Library of Congress Cataloging-in-Publication Data
Padgett, Simon
Profiling the fraudster: removing the mask to prevent and detect fraud / Simon Padgett.
pages cm. – (Wiley corporate F&A series)
Includes bibliographical references and index.
ISBN 978-1-118-87104-1 (hardback)
1. Corporations-Corrupt practices. 2. White collar crimes. 3. Fraud. 4. Fraud-Prevention. 5. Fraud investigation. I. Title.
HV6768.P33 2014
658.4'73-dc23
2014034566
THE TYPICAL ORGANIZATION LOSES 5 PERCENT of its annual revenue to fraud. Applied to the estimated 2011 gross world product, this figure translates to a potential total fraud loss of more than $3.5 trillion worldwide, according to the Association of Certified Fraud Examiners (ACFE) Report to the Nations, 2012. So, put in context, fraud is material.
Profiling is a part of everyday life for all of us, using previous experiences to determine how we get through the day's activities. Indeed, when we approach winter months we know that we need warmer clothing. Why, because last winter told us so. When we drive through an intersection or the stoplight turns red, we know exactly what to do or how to react to the event because we have done it so many times before. More to the point, we can identify the cold of winter and the challenges we face while driving because we have seen the patterns on numerous occasions before, and our brains have analyzed the information at that time, stored the patterns of data, and drawn on the stored memory to deal with the current event. Then consider your favorite sport and trying to work out who will win. In the same way that we recall previous events, we also recall previous history of individual sports teams and individuals. Soccer players of a certain age may be in their peak, rugby players from a certain continent may win more games, and marathon runners from certain African countries are always likely to run the fastest times. This is everyday profiling of individuals based on previous experiences. If this process works in dealing with the characteristics of day-to-day activities and people we come into contact with, then why is this process of profiling not more prevalent in the fight against fraud? It can be seen that many forensic investigations do not have a formal process for either drawing from or contributing to fraud type and fraudster profiling.
