Fraud Schemes and Fraud Investigations
Assignment 3: Fraud Schemes and Fraud Investigations Due Week 7 and worth 280 points Using the Internet or Strayer databases, identify and research a company with an employee(s) who was involved in corporate fraud. Coordinate an investigation, identify various types of surveillance and covert operations, identify red flags, and recommend a fraud prevention plan. Write a four to five (4-5) page paper in which you: Based on your research, assume that you are fraud investigator assigned to coordinate an investigation of the fraudster. Determine how you would implement this investigation without the fraudster’s knowledge. Provide support for your rationale. Assuming you are the fraud investigator on this case, assess what types of surveillance and / or covert operations you would use to collect evidence related to the fraud. Analyze technological options for investigating fraud, indicating what you believe to be the most effective option. Provide support for your rationale. During the investigation, assess the most significant red flags which would have been an indication of possible fraud needing corrective action by management. Based on your research, suggest key practices the fraud investigator could have used in conducting interviews with the fraudster and the company’s employees. Assess the various interviews and interrogation questions available to you, and select the type of interview and interrogation questions that would have been most appropriate for this investigation. Provide support for your rationale. Recommend a fraud prevention plan for this organization. Determine the positive or negative consequences that this fraud prevention plan might have on employees’ morale and the public perception of the organization. Provide support for your rationale. Use at least four (4) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length. The specific course learning outcomes associated with this assignment are: Examine the basic concepts related to fraud investigations, red flags that are an indication of fraud, and fraud prevention plans. Use technology and information resources to research issues in forensic accounting. Write clearly and concisely about forensic accounting issues using proper writing mechanics. Click here to view the grading rubric for this assignment.
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FRAUD SCHEMES AND FRAUD INVESTIGATIONS
Fraud cases are very common especially in corporations. The situation gets worse especially if the corporations happen to be government-owned where the management does not feel under direct incentive to better the services or prevent corruption. This is more so quite common in public hospitals whereby various fraudulent claims are raised every day. This study will focus on the case of Columbia/ HCA hospital that was involved in such fraud claims in 1990’s (Kestin & Sentinel, 2010, para.5-10). The fraud investigations were conducted by the FBI, leading to USD $1.7 worth of penalties and damages that the hospital had to pay.
The moment fraud cases are suspected, it is very important to handle it with such confidentiality. It is very good to also follow the proper channel of reporting to ensure word does not leak. This matter is kept confidential by the set protocol by the management (Loy, L. Heriot Watt University, 2008, pp. 36-37).
. In the case of medical care fraud like the one in Columbia/ HCA hospital, the party that suspected the crime could have reported it in confidence to the relevant authorities before the matter got out of hand. In most cases, the company secretaries have the mandate to record such fraudulent claims in confidence to allow for investigation without the knowledge of the fraudsters. In case the secretary is involved, then the reporting is done to the authority above the position. This therefore calls for an investigation to analyze the claims and ascertain whether they are legitimate or not.
Types of Surveillance and Covert Operations
Health care sector would be probably one of the last most thought of avenues for fraud. This is because many people who go there are after getting well and most of them will do anything to go back home healthy. However, millions of dollars are lost in fraud in health care. However, several surveillance operations can be carried out to ascertain whether fraud is really taking place. These are the confidential ways in which an investigator would use to gather enough evidence that actual fraud is really taking place at the hospital. Now, the surveillance techniques may differ from industry to industry. This is basically because in each and every industry, there are some things that one is supposed to check when investigating fraud. In the heath care sector, most of the common fraud cases include things such as:
Sending bills for services that were, in the real sense not given
This is very common especially in public hospitals since the fraudulent employees will be seeking to make extra money without necessarily having to work for them. As a result, fake bills and invoices are sent. Mostly, the government is the one that ends up footing this bill, hence the main victim in such cases.
Sending bills for services that are already covered
In developed nations, many citizens are enjoying medical covers. However, doctors have been known to send bills despite the fact that the insurance company has catered for them. Therefore, for a patient who is not very informed on insurance matters, they may end up paying. Now, this is a fraud case.
For me to really ascertain whether the above actually took place in the hospital, I would apply the following surveillance techniques:
The patients’ medical files within the period in question.
In many hospitals, patients attending the hospital fill in files with their details. Therefore, this would be the first stop in conducting fraud investigations.
What about the sign-in logs of patients?
If the patients’ files are missing, I would try to go through the hospital’s sign-in logs. Like in many other organizations, hospitals require their patients to sign-in as they report for record keeping. Therefore, this would be a good avenue to check for any sought of evidence on whether the patients really attended the hospital or not.
Appointment calendars
Well, it may be that still there is no record of the patient (s) ever getting services from the hospital. This would take me to the next avenue of checking the appointment rec...