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Fraud Exprosed Whot you Dont Could Cost your company millions - Joseph W.

Joseph W. Fraud Exprosed Whot you Dont Could Cost your company millions - Wiley Publishing, 2003. - 289 p.
ISBN: 0-471-27475-5
Download (direct link): fraudexposedwhatyoudont2003.pdf
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The crack epidemic that fueled the crime wave had ebbed. Heroin, a depressant, was now the drug of choice. This was the “all the criminals are nodding”
RETHINKING THE ASSUMPTIONS
defense. We spot-tested regularly in Central Booking and found that the percentage of people who had cocaine in their system when arrested remained the same or higher than it had been at crack’s height. In Manhattan in February 1995, that number was 78 percent.
It was a particularly cold winter, which traditionally holds down crime. Come on. All the criminals stayed indoors? It was cold up and down the Eastern seaboard and those cities’ crime figures didn’t vary drastically. Were Boston’s or Washington’s criminal element more hardy than New York crooks?
Homicides were down because all the gangs had made peace with one another. The DEA had listened in on over 400,000 wiretap conversations, and we had never heard a word about this supposed treaty. And, if the gangs made an agreement not to kill each other over drugs, did they also agree not to rob anybody, or steal cars, or commit burglaries or shoot people?46
It is said that politics makes strange bedfellows—so too, may crime. At least one vocal death penalty opponent, John Bessler, an attorney and adjunct professor of law at the University of Minnesota Law School, has advanced the argument that rather than impose the death penalty as a crime-fighting tool, which he does not believe it is, we as a society should look toward earlier resolution of criminal issues. In this regard, he is not far removed from the position taken by Kelling and others that more less-serious arrests may lead to a reduction in more serious arrests. Bessler advances his position as follows:
Instead of putting needles into criminals who are brain-damaged, mentally retarded, or who do not share our value for human life, our crime-fighting efforts should focus on real solutions such as tougher gun-control laws, stiffer penalties for violent offenders, better child-protection laws, and combating truancy to keep kids in school and out of gangs.47
Thus, in the space of roughly 20 years, a significant number of police departments—organizations rooted in quasi-military traditions of unity, conformity, obedience, silence, and isolation—had transformed themselves and in the process had transformed crime rates in many cities. They were still cops, with guns and badges, and they still locked people up and got in shootouts from time to time, but the basic assumptions that had dominated their thinking for decade after decade had changed. By 1999, the last year for which the Bureau of Justice Statistics of the U.S. Department of Justice has published figures, more than 90 percent of police departments serving 25,000 or more residents had some type of community policing plan, and most departments serving populations of 50,000 or more had a formal, written plan. Nearly two-thirds of departments, 64 percent, had full-time community policing officers, and it was estimated that nationwide 91,000 law enforcement officers, 21 percent of all local officers, were regularly engaged in community policing activities.48
FRAUD EXPOSED
As these new theories in law enforcement began to enter their third decade, the results still appear positive, although experts continue to debate exactly what the figures mean and what caused their decline. The Law Enforcement News (LEN) reports that FBI Uniform Crime Report data for 2001 appears to show that the era of broad decline in crime may have bottomed out, but that some cities are still reducing the level of criminal activity, noting: “Exactly why crime has fallen seems to be somewhat of a mystery. Experts say that although policing strategies have played a role in many areas, the fall in local crime has been so precipitous that other factors had to have been at work. Just what those were, however, no one seems to know.”49 LEN goes on to note, for example, that major crime in Miami dropped in 2001 to the lowest level in 23 years, and in New York City the predicted murder rate in 2002 is expected to be at the 1958 level. One veteran police official is quoted as observing, “ Homicide detectives are beginning to feel like Maytag repairmen, the number of homicides is so low.”50 Absent further research and analysis, we can only speculate what portion of this decline was caused by the police redefining their roles and operations; however, it seems without question that such changes in priorities and strategies had at least some, and perhaps a dominant, share of the responsibility. Before we speculate on what value their experiences may hold for us, we must now consider the state the forensic profession finds itself in today.
CHAPTER 3
THE STATE OF OCCUPATIONAL FRAUD
To those of us in the forensic profession, the experience of law enforcement and its search for answers to apparently intractable problems must sound familiar. We, too, are awash in fraud, much of it within the organizations we call home. In his 1993 book, Handbook on Corporate Fraud, Jack Bologna cites the Hallcrest Report II, which estimates that economic crime in the United States cost consumers and businesses $144 billion in 1990 and represented about 2 percent of the nation’s gross national product.1 Recognition of the importance of this phenomenon is also not late in coming. Bologna cites a statement in 19 70 by Henry S. Ruth, Jr., then the director of the U.S. National Institute of Law Enforcement and Criminal Justice: “[T]he entire field of white-collar crime represents a national priority for action and research—to define the problem, to examine its many faces, to measure its impact, and to look for ways in which its victims can be helped.”2 The Association of Certified Fraud Examiners (ACFE) in its 1996 Report to the Nation announced that responding members, Certified Fraud Examiners, estimated that their organizations/employers lost about 6 percent of revenues to fraud and abuse. In his 199 7 book, Occupational Fraud and Abuse, ACFE founder and President Joe Wells notes of this figure, “If multiplied by the U.S. Gross Domestic Product—which exceeds $7 trillion annually for the latter 1990’s— then the total cost to organizations in the U.S. exceeds $400 billion annually. It is a staggering sum, twice what we pay to defend our country. It is more than we spend on education and roads, not to mention six times what we pay for the criminal justice system.”3 Based on the research conducted in assembling the 1996 Report and updated by the 2001 National Fraud Survey, the ACFE set forth the following statistics concerning occupational fraud:4
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