When the Fraudster is Someone you Trust

Friendly fraud taken to new heights.

Red Bank, Aug. 15 2008/The FraudBlog Newsletter/- The number of articles related to internal fraud have been rising considerably over the past couple of months. If you are like most fraud managers, your focus has been on stopping the fraudster from coming in the door, and not paying attention to the fraudster lurking inside. It can be easy to overlook how easy it is for employees to copy down customer credit card information, to help a friend exploit a weakness in the companies systems or to directly steal from the company.

While I don't believe the individuals involved in these cases were criminals targeting these companies, I do believe they serve as a good example to putting in checks and balances to keep honest people honest...

To illustrate my point I have taken quotes from a recent case. These quotes were taken from the article "Former Sailor Gets 2 years for fraud with Navy Credit Card" by Austin Wright in the Virginia Post on August 10, 2008.

"I know that I'm a good person. I know that I made a bad decision," Gibbs said in court. "I'm aware of all my consequences.""Her supervisors encouraged this type of behavior," defense attorney David Price said in court. He elaborated after the sentencing that no one monitored what Gibbs and others were purchasing with the government-issued cards."For this to go on for as long as it did and for the amount of money that was involved - there's no excuse," Price said. "There are other people who didn't do their jobs right." Other cases in the news:

Customer Service Representative - An Alaska Airlines call center employee misused credit card data between August 2006 and June of 2008. When processing reservation changes, the employee allegedly diverted payments into her own personal bank account instead of the airline's. The fraud affects about 1,500 customers.

Receptionist - An Illinois Eye Center receptionist used patient information to obtain credit cards and then had the bills mailed to her home. Gast said the theft occurred from August until December of last year. Some of the victims didn't know their names had been used.
Mail Man - four counts of mail theft and one count of defrauding the U.S. Postal Service by using an agency credit card for personal use.

Administrative Assistant - charged more than $240,000 in personal expenses last year on a corporate credit card belonging to a pharmaceutical research and development company, a subsidiary of Johnson & Johnson. Federal prosecutors said she used the card to pay for a 1968 Ford Mustang and 1969 Chevrolet Camaro and to restore those vehicles. She also used company funds to pay for cosmetic surgery and a cruise vacation, a granite kitchen countertop, a residential air-conditioning unit and American Express gift cards..

Candidate for Sheriff - a candidate for the position of Navajo County sheriff, was arrested July 22 on charges of theft of a credit card and fraudulent use of a credit card, both felonies.
Bank Clerk - The clerk allegedly played a role in a conspiracy to embezzle funds from Sperry Marine Federal Credit Union by using other names to take out loans from the credit union.

Neighbor - Buellton California residents 47-year-old Karen Peterson and 49-year-old Debra Mangino are accused of stealing their one-time neighbor's mail and activating a credit card in his name.

Purchasing Agent - Navy sailor uses military credit card to steal hundreds of thousands of dollars from the government. Defense and prosecution lawyers agreed this could have been prevented through minimal oversight. From 2006 to 2007, she used the card to buy 162 notebook computers, 65 big-screen televisions and 22 digital cameras, items she and an unnamed co-conspirator sold for cash.

Father - A New York man says he used his son's Social Security number to obtain credit cards and loans from several banks, and from a firm that gave him loans to buy two cars. The crimes occurred between 1997 and 2005.

Credit Card Fraud Officer - A former senior Sussex Police officer who used his force credit card to buy goods for himself has been ordered to pay nearly £100,000. Sorority Sister - Danielle Sue All, 29, is believed to have charged more than $2,000 on a Purdue University sorority adviser's card reported missing Aug. 5.

Secret Service Informant - charged with breaking into the computer systems of nine of the nation's largest retail companies and stealing more than 40 million credit and debit card numbers.