Luxury sprees of Aussie fraudster employees after stealing $350million from employers
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The main way Australians have been caught stealing from their businesses has been revealed in a new report on workplace fraud – and it happens when they’re not at work.
A new report by forensic accounts Warfield & Associates into 102 cases of $1 million fraud against Australian employers by staff found that $350 million had been stolen between 2012 and 2022.
But it is believed that when amounts under $1 million are counted, the real figure would easily be that much every year.
The main way Australians were caught stealing from their businesses has been revealed in a new report on workplace fraud – when they’re not at work
Employees who cheated to improve their lifestyles had lavish spending patterns beyond the wildest dreams of their unsuspecting colleagues
The top two reasons people stole were to improve their own lifestyle or to gamble, the report said, which was based on Australian court records that resulted in criminal convictions.
Those who committed fraud to improve their lifestyle paid for a dizzying array of luxury goods and travel.
They bought jewelry and designer clothes and paid for cosmetic surgery, luxury vacations, houses, sports cars and in one case two ‘specialized military’ vehicles.
Many also bought drugs, paid for escorts and spent money on strip clubs.
They bought jewelry and designer clothes and paid for cosmetic surgery, luxury vacations, houses, sports cars
An Australian fraudster who stole from his employer spent $400,000 on jewelry alone
Company detective Brett Warfield told Daily Mail Australia that the most common way offenders are caught is when they go on holiday or leave a company.
“It happens overwhelmingly that when they leave the organization for a vacation or leave for good, someone comes in and does their job.
“That’s why some people don’t take a vacation because when they’re not working, someone else gets their emails and calls and sees things like unusual purchase orders.”
A man who spent $65,000 on vacations preferred to stay closer to home, dropping $134,073 in strip clubs and $41,875 in “luxury goods”
An Australian man spent $300,000 on 26 designer watches after defrauding his employer
Mr Warfield said more than 30 years of research into workplace fraud had shown him that the criminals in an organization are not always the people you would expect.
“What we hear over and over is ‘we never suspected them,’ so they really are the silent ones you need to see.”
To collect the data, Warfield & Associates searched lawsuits between 2012 and 2022 and found 102 cases totaling $349,996,063.
Of the 102 cases, 52 took more than five years to discover.
Most had lavish spending patterns 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, one of which he gave to his girlfriend before spending $300,000 on 26 designer watches.
Another bought an Aston Martin car and bizarrely, a $10,000 dollhouse.
A woman drew attention to herself when she bought three “special interest military vehicles” for her husband.
The top two reasons people stole were to improve their own lifestyle or to gamble, according to the report, which was based on Australian court records that resulted in criminal convictions.
A woman drew attention to herself when she bought her husband three ‘special interest military vehicles’
A man bought expensive property in his own name and in his wife’s name and bought interests in 111 horses for a total consideration of $7 million.
Travel was predictably popular with fraudsters, with one person going $367,000 on vacation over eight years and another spending $250,000 on travel and lodging.
In another case, a woman bought a car, vacations to Fiji and Queensland, jewelry, and financed her then-boyfriend’s failed career as a rap musician before paying unknown legal fees to him.
A man who spent $65,000 on vacations preferred to stay closer to home, leaving $134,073 in strip clubs and $41,875 in “luxury goods.”
One bought a cafe worth $600,000, while the other ran a drag racing business.
In most cases, the fraudsters carried out their crimes on their own, although in 10 cases they had help within their company, with things like false billing.
“In ten cases there was collusion between the perpetrator and another employee or an outside party such as a supplier or contractor,” the report said.
An Australian fraudster spent $280,000 on two Porsches and gave one to his girlfriend
A man bought expensive property in his own name and in his wife’s name and bought interests in 111 horses for a total cost of $7 million
The most popular type of employer under attack was construction companies, which had 11 businesses, just ahead of banks, with 10.
A total of 15 companies in the financial sector were targeted.
On average, each case was $3,431 million, but the largest was $27.4 million.
Of the 102 cases, only 11 had criminal records for similar offenses and 57 percent of the perpetrators were male.
False billing and wire transfer fraud were the most common ways fraud was committed.
The report also showed how difficult it is to get away with fraud due to the many ways to get caught.
While they were often caught leaving work or taking a vacation, several employees were caught on dodgy bills for hotels and bars.
In one case, a subcontractor approached a Chief Operating Officer on a position requesting more contract work.
The request revealed a discrepancy between the work they were doing and the work records said they were paid.
Travel was predictably popular with Australian fraudsters, with one person going on holiday worth $367,000 in eight years
In another case, a new Chief Financial Officer decided to dig into the staff’s previous expense records.
Mr Warfield said that small and medium-sized businesses are most at risk from internal fraud, but not always.
“Some very large organizations have suffered millions of dollars in losses for years and should really handle the risks much better.”