Is There a Fraudster in Your Office?

Not all fraudsters are strangers. Even partners, associates, law clerks or other employees may turn to fraud because of financial pressures from a divorce, failed business venture, or other personal crisis. Its usually the last person you’d expect, and often one of your most long-standing and trusted employees.

Here are the red flags:

  • Someone never takes vacation or sick leave, works overly long hours, or refuses to delegate work.
  • A firm member undergoes a sudden change in lifestyle or change in temperament.
  • The firm receives mail for a corporation for which no client file is opened or billed, or minute books are kept in the lawyer’s office instead of with the corporate law clerk.
  • Unusual patterns such as a sudden increase in payments to a person or credit card company or government, or complaints about slow payment from suppliers or clients, or an increase in written-off work in progress (WIP).

For more information, and directions on what to do if you have a suspected or real fraud, see “Fraud on the Inside: What to do when partners, associates or staff commit fraud” in the Winter 2008/2009 issue of LAWPRO Magazine at www.lawpro.ca/magazine

Comments

  1. Similar “red flags” can be used to detect and root out communists in the office … because you never know.