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Check Tampering

Check Tampering. Check Tampering. Forged Maker. Forged Endorsement. Altered Payee. Concealed Checks. Authorized Maker. Frequency of Fraudulent Disbursements. Comparison of Median Loss of Fraudulent Disbursements. Dollar Loss Distribution- Check Tampering Schemes.

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Check Tampering

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  1. Check Tampering

  2. Check Tampering Forged Maker Forged Endorsement Altered Payee Concealed Checks Authorized Maker

  3. Frequency of Fraudulent Disbursements

  4. Comparison of Median Loss of Fraudulent Disbursements

  5. Dollar Loss Distribution-Check Tampering Schemes

  6. Detection of Check Tampering Schemes

  7. Perpetrators of Check Tampering Schemes

  8. Median Loss By PositionCheck Tampering Schemes

  9. Size of VictimCheck Tampering Schemes

  10. Median Loss by Number of Employees – Check Tampering Schemes

  11. Check Tampering Schemes • Perpetrator • What must the perpetrator have to do perpetrate this type of scheme?

  12. Forged Maker Schemes • What is this? • What must the perpetrator be able to do in order to perpetrate this fraud?

  13. Obtaining the Check • Employees with access • Employees without access • Counterfeit

  14. How Should Checks be Safeguarded? • Lock and key • Limited access • Blank checks • Periodically checks • Voided checks • Watermark paper • Out-of-sequence canceled checks and duplicate check numbers • Daily reconciliation

  15. To Whom Is The Check Made Payable? • Perpetrator • Accomplice • “Cash” • Vendors

  16. Forging the Signature • Free-hand • Photocopied • Automatic check-signing instruments

  17. How can Forged Maker Schemes be Prevented and Detected? • Blank checks • Rules • Separation of duties • Rotation • Limited access

  18. Forged Maker Schemes • Miscoding • Concealing

  19. Forged Endorsement Schemes • Interception • Third party signature

  20. Intercepting Checks Before Delivery • Employee • Controls • Theft • Rerouting • Converting

  21. Preventing and Detecting the Theft of Outgoing Company Checks • Separation of duties • Trained employees • Complaints • Duplicate payments

  22. Preventing and Detecting the Theft of Outgoing Company Checks • Restricted changes • Periodic reporting • Canceled checks • Date of mailing

  23. Altered Payee Schemes • Intended for a third party • Payee designation altered • Reduced discovery

  24. Altering Checks Prepared by Others • Inserting new payee • “Tacking on”

  25. Altering Checks Prepared by the Fraudster • Erasable ink • Blank checks

  26. Preventing and Detecting Altered Company Checks • Separation of duties • Check the canceled check versus book entry

  27. Concealed Check Schemes • What is it? • When does this typically happen?

  28. Authorized Maker Schemes • What is it? • How is it done?

  29. Preventing and Detecting Check Tampering by Authorized Makers • Check signer • Separation of duties • Dual signatures • Vendor lists

  30. Concealing Check Tampering • Tough to do!! • What could happen?

  31. Concealing Check Tampering • bank reconciliation • Re-alteration of checks • Falsifying the disbursements journal • Reissuing intercepted checks • Bogus supporting documents

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