The profile of a fraudster

"In the case of white-collar crimes," says Mathias Kiener, partner in forensics at KPMG Switzerland, "it's usually just the commissioner acting by chance."

White-collar crime causes billions of dollars in damage. In Switzerland, too, numerous companies suffer from such activities. In Switzerland - as well as worldwide - more and more tech-savvy fraudsters are using contemporary technological means to carry out their schemes.Of all cases involving technological use investigated in this country, around 27 percent involved invoice documents containing false or misleading information and 27 percent involved the creation of fraudulent e-mails. However, economic frauds (Engl.: Frauds) are diverse, with 47 percent directly targeting assets and "only" 22 percent manipulating data

Text by Michael Merz

KPMG attributes the fundamental increase to a recorded 750 fraud cases (in 81 countries) to a greater use of technology on both sides, for example between the client and the service provider, certainly between corporate partners and high-level criminals.

Another nine percent of technological frauds between 2013 and 2015 represented the pervasive abuse of existing access rights to computer systems. Fraudulent manipulations are generally committed more often by groups (62 percent) than by individuals (38 percent).

The typical cheater

The typical white-collar delinquent in Switzerland is between 46 and 55 years old, male and executive (member of senior management). "They are often self-important but seem friendly," pointed out Philippe Fleury, head of forensics KPMG Switzerland. In the study, 17 percent represent female fraudsters. They tend to act as inconspicuous staff members, in contrast to male delinquents in the cadre.

Compared to study data from other countries, the typical white-collar delinquent in Switzerland is also a good 10 years older than foreign fraudsters. In addition, 36 percent of these types had already been with the same company for 6 years. The KPMG forensic experts therefore see risk potential among existing employees and corporate partners: "It is difficult to identify individual perpetrators. In Switzerland in particular, there is a high culture of trust."

"Here," says Mathias Kiener, partner in forensics at KPMG Switzerland, "it's usually just a case of coincidence. In addition to undiscovered individual perpetrators, the fraud typology also includes indefinable collusions and yet many-sided organized networks and "entire incriminated management groups.

For Switzerland, the following profile picture of the typical economic delinquent emerges:

- More than half of the investigated fraudsters are between 46 and 55 years old.

- 82 percent of the perpetrators are male.

- 64 percent of all fraudsters come from within the company's own ranks.

- 55 percent of the perpetrators are cadre members.

- 36 percent have been with the company for at least six years (2013: 41 percent).

- The main motives for committing fraud are personal gain to finance lifestyle (64 percent), greed (18 percent), and a sense of curiosity/ease of doing the deed (18 percent).

Control systems insufficient

Further underscoring the KPMG study, forensic experts said, "Frauds and threats have grown because of weaker controls." For 64 percent of all white-collar fraudsters, weak internal controls are a key driver that appears to be growing in importance: the number of fraudsters whose criminal activity is significantly facilitated by weak controls has increased sharply from 18 to 27 percent compared to 2013.

Astonishing is the fact that at most 13 percent of all fraudsters felt under pressure from an organization to take a criminal path. Another finding of the study: at most 3 percent of all frauds can be detected by "pro-actitve data analytics", and just 6 percent of abuses are detected by external auditors.

While criminals are already making very efficient use of technological tools, companies are doing little to curb crime with technological means.

Philippe Fleury, Head of Forensics at KPMG Switzerland, warns of this: "The use of technology in white-collar crime will continue to increase. Improved control systems and threat monitoring systems are therefore a must for companies to detect irregular or suspicious behavior in good time."

Conjectures and hints 

However, even the best controls do not completely protect against economic fraud: In 16 percent of the cases investigated, it was possible to circumvent control systems. In another 20 percent, these played no role at all; the perpetrators were not distracted by the control mechanisms and carried out their fraud without regard to them.

Detection of such acts was 44 percent through complaints or tips and 22 percent based on management identifications or analysis.

Details of the current, complete forensic study "Profile of a fraudster" can be found under this Link