The main way Australians have stolen from their business has been revealed in a new report on workplace fraud – and it’s happening when they’re not at work.
A new report by forensic accounts Warfield & Associates into 102 million dollar fraud cases committed against Australian employers by staff has found that $350 million was stolen between 2012 and 2022.
But it is believed that when amounts below $1 million are counted, the actual figure would easily equal each year.
The first way Australians were caught stealing from their businesses has been revealed in a new workplace fraud report – when they’re not at work
Employees who committed lifestyle-enhancing fraud had lavish spending habits beyond the wildest dreams of their unsuspecting colleagues
The two main reasons people stole were to improve their own lifestyle or to gamble, said the report, which was based on Australian court records where criminal convictions were handed down.
Those who committed lifestyle-enhancing frauds paid for a dizzying array of luxuries and travel.
They bought jewelry and designer clothes and paid for cosmetic surgery, lavish vacations, homes, sports cars and, in one case, two “specialty military” vehicles.
Many also bought drugs, paid escorts and splurged at strip clubs.
They bought designer jewelry and clothes and paid for cosmetic surgery, lavish vacations, houses, sports cars
Australian fraudster who robbed his employer spent $400,000 on jewelry alone
Business investigator Brett Warfield told Daily Mail Australia the most common way perpetrators get caught is when they go on vacation or leave a business.
“Most of the time it happens when they leave the organization for a vacation or leave for good and then someone comes in and does their job.
“That’s why some people don’t take a vacation because if they’re away from work, someone else gets their emails and phone calls and sees things like unusual purchase orders.”
A man who spent $65,000 on vacation preferred to stay closer to home, losing $134,073 in strip clubs and $41,875 in ‘luxuries’
Australian man spent $300,000 on 26 designer watches after defrauding his employer
The cashier who bought a Pie Face store
A woman who was a payroll manager at a packaging company used the $4.142 million she stole 220 times from her employer to buy a Pie Face franchise.
She has also invested in properties, payments to relatives and friends, and entertaining relatives at social and sporting events.
His sentence was six years and four months in prison with a period without parole of four years.
Mr Warfield said more than 30 years of examining workplace fraud has shown him that the criminals in an organization are not always the people you would expect.
“What we hear over and over again is ‘we never would have suspected them’, so they’re really the quiet ones you need to watch out for.”
To collect the data, Warfield & Associates sifted through court cases between 2012 and 2022 and found 102 cases totaling $349,996,063.
Of the 102 cases, 52 took more than five years to be discovered.
Most had lavish spending habits beyond the wildest dreams of their unsuspecting colleagues.
One spent $400,000 on jewelry and $220,000 on designer clothes, while another dropped $280,000 on two Porsches, giving one to his girlfriend before spending $300,000 on 26 watches. Mark.
Another bought an Aston Martin car and oddly, a $10,000 dollhouse.
A woman drew attention to herself when she purchased three ‘special interest military vehicles’ for her husband.
The two main reasons people stole were to improve their own lifestyle or to gamble, said the report, which was based on Australian court records where criminal convictions resulted.
A woman drew attention to herself when she bought three ‘military special interest vehicles’ for her husband
Construction company director’s $21 million fraud
In one of the biggest cases, a construction company finance manager stole $20.7 million using 300 fake invoices over 12 years.
He spent his stolen millions on expensive thoroughbred horses, at least six estates, and his lover.
He was sentenced to 15 years in prison, with a period without parole of five years.
A man bought expensive properties in his own name and in the name of his wife and bought interests in 111 horses for a total of $7 million.
Predictably, travel was popular with scammers, with one person taking a vacation worth $367,000 over eight years and another spending $250,000 on travel and accommodation.
In another case, a woman bought a car, a vacation to Fiji and Queensland, jewelry and funded her then-boyfriend’s failed career as a rap musician before paying legal fees for him not disclosed.
A man who spent $65,000 on vacation preferred to stay closer to home, losing $134,073 in strip clubs and $41,875 in “luxuries”.
One bought a coffee worth $600,000 while another ran a drag racing business.
In most cases, the fraudsters committed their crimes on their own, although in 10 cases they had help from within their company, with things such as false invoicing.
“Ten cases involved collusion between the perpetrator and another employee or an external party such as a supplier or contractor,” the report said.
Australian fraudster spent $280,000 on two Porsches, giving one to his girlfriend
A man bought expensive properties in his own name and in the name of his wife and bought interests in 111 horses for a total of 7 million dollars
The most popular type of employer targeted was construction companies, which had 11 cases, just ahead of banks, with 10.
A total of 15 companies in the financial sector were targeted.
On average, each case was worth $3.431 million, but the largest was $27.4 million.
Of the 102 cases, only 11 had criminal records for similar offenses and 57% of the perpetrators were male.
Mis-invoicing and electronic funds transfer fraud were the most common ways of committing fraud.
The report also showed how difficult it is to get away with fraud due to the many ways to get caught.
Although often caught after leaving work or taking vacations, several employees were surprised by questionable bills for hotels and bar tabs.
In one case, a contractor approached a function chief operating officer asking for more contract work.
The application revealed a discrepancy between the work they were doing and the work records showed they were being paid.
Predictably, the trips were popular with Australian scammers, with one person taking a holiday worth $367,000 over eight years
In another case, a new CFO decided to dig into previous staff expense records.
Mr. Warfield said small and medium-sized businesses tend to be most at risk of internal fraud, but not always.
“Some very large organizations have suffered millions of dollars in losses over many years and really should manage risk better.”