3 Tips to Help Prevent and Detect Fraudulent Travel Expense Activity 


Misty Carter, CFE, CIA, CISA
ACFE Research Specialist

Have you ever wondered, “Are my travel expenses being reviewed?” Fraudsters who have been successful at defrauding companies through the submission of fictitious travel expenses most likely have. If management, though, has never considered this question from the employee’s perspective, they might unknowingly be paying out thousands of dollars to fund a fraudster’s lifestyle — that fraudster being one of their own employees.

Unfortunately, this was the case with New York State Assemblyman William Boyland, Jr. Boyland, indicted on charges of allegedly filing tens of thousands of dollars’ worth of fraudulent travel expenses, claimed he had been traveling on legislative business in Albany, New York, between January 2007 and December 2011 when he allegedly was not (as reported in Metropolis, a Wall Street Journal blog). In fact, in some of the instances where he allegedly claimed he was traveling to Albany, he was in New York City meeting with undercover investigators who were building an unrelated bribery case against him.

While the exact dollar amount falsely claimed by Boyland is still uncertain, an audit found no record of him being in Albany 609 of the 975 days he claimed he had traveled there. Based on these audit findings, Boyland is required to repay the state $67,497 in mileage reimbursement and per-diem payments. In addition to the indictment for submitting fraudulent travel expenses, Boyland has two other pending charges against him related to bribery and mail fraud.

This is just one example of many where employees abuse company or tax-payer dollars through expense reimbursement schemes. According to the 2016 Report to the Nations, expense reimbursement fraud schemes made up 14 percent of the asset misappropriation schemes with an average loss of $40,000. The report also noted that these frauds lasted a median of 24 months before being detected, as was the case with Boyland.

Even though the detection and prevention of fraudulent employee expenses can seem overwhelming, there are controls that management can put in place to mitigate risk in this area. The following tips can aid in the detection, prevention and deterrence of this type of fraud:

  • Implement continuous control monitoring software. This software is automated and can review 100 percent of expense data. It can be configured to identify outliers or areas where fraud and noncompliance are most likely to be detected. Data reported from these monitoring solutions can help decrease fraudulent expense activity through trend reviews of anomalies. Employees might also be deterred from attempting a fraud if they know that a tool is in place to review all expenses submitted. 
  • Implement a formal travel and entertainment expense policy. It is important for management to develop a clear travel and entertainment expense policy and communicate it to their employees. Management should also ensure employees are aware of their expectations toward policy adherence and establish consequences for failure to comply with policy requirements. 
  • Hold management accountable. Management might be lax in its review and approval of employee expenses, but if held accountable for approving fraudulent expenses, they might spend more time reviewing them. Approving managers should also consider occasionally questioning employees about expenses they submitted. This practice can actually have a deterrent effect: if employees know someone is actually reviewing what they submit, they are less likely to submit a fraudulent expense. 

Although expense reimbursement fraud is rampant, it can be minimized if the proper action is taken. Management must be proactive and implement the necessary controls to help deter employees from committing schemes and detect if they do occur. Failing to take action can be detrimental to the company and leave it exposed to this and other types of fraud schemes.

ACFE Women’s Panel: Sayonara Old School Gender Roles


Mandy Moody, CFE
ACFE Media Manager

Thick skin and confidence. Those are just two of the skills the first-ever women’s panel offered female anti-fraud professionals during the ACFE Global Fraud Conference in Baltimore, Maryland, June 16, 2015. Cynthia Cooper, CFE, CEO of Cooper Group, moderated a panel of five women representing public, private, government and corporate worlds. The panelists included Tiffany Couch, CFE, CPA, CFF, Principal at Acuity Forensics; Sharon Curry, CFE, Director of Global Investigations at Wal-Mart; Francine Gross, Chief of the Economic Crimes Unit at the FBI; Leah Lane, CFE, CFS, Global Investigations Director at Texas Instruments, Inc.; and Liseli Pennings, Special Agent at the U.S. Department of Treasury. 

Below are a few of the important takeaways that any female professional would benefit from implementing: 

Say ‘no’ more. You don’t have to say ‘yes’ to everything to show that you are competent and able. You can say ‘no’ to certain projects. Pick the quality ones to step up and handle.

Hone two important skills: communication and confidence. As Lane said, “You must know how to communicate both verbally and in writing. You need to be able to present findings and give directions.” Along with that, you need confidence. You even need confidence when you may not have it. “You have to find ways to make yourself more confident,” Gross said. “You have to believe in yourself.” And even if that confidence is lacking, according to Couch, “you have to fake it until you make it. You have to act confident even if you don’t feel like it.”

Being a female can be an advantage. Characteristics that many women exhibit, like multitasking and an attention to detail, play huge roles in being a successful anti-fraud professional. Use these skills, perfect these skills and own these skills. Gross also mentioned that some people are more comfortable talking to women and sharing information with them. She recommends using the assumption that you are easier to talk to and get the most information you can. 

Accept the mommy-guilt and don’t listen to the nay-sayers. Balancing parenthood with your career is simply that, a balance. Two of the panelists, and some of the audience members, mentioned that their husbands are or were stay-at-home dads. That’s okay, they said. It works and it is what is best for their families. There are no specific gender roles assigned to working and parenting. If you hear different, ignore it.

Develop really thick skin. One attendee asked for advice in dealing with inappropriate jokes or male-dominated environments that unknowingly exclude females. The panel’s response was to never get emotional about it and don’t be too sensitive; it isn’t personal. Use a sense of humor to lighten a situation and know your personal threshold for dealing with these potential situations. And, if a line is crossed, hold people accountable for their actions.

No one is going to help you, but you. If you are lacking in a professional area, look for training. If you need a mentor, find one. You are in control of how far you will go.

The last piece of advice that definitely received the most laughs and some applause was what Couch’s mentor shared with her many years ago: “He told me, ‘Tiffany, you may be the smartest person in the room, but don’t act like you know you are the smartest person in the room.’”

Find more articles, videos and photos from the 26th Annual ACFE Global Fraud Conference at FraudConferenceNews.com.

Adding Structure to the Use of Unstructured Data


Jeremy Clopton, CFE, CPA, ACDA
Senior Managing Consultant, Forensic and Valuation Services

In the age of big data, it should come as no surprise the ACFE’s 2014 Report to the Nations ranks proactive monitoring and analysis of data as the most effective anti-fraud control, with respect to both duration and median loss. What may be surprising is the type of data being monitored and analyzed.

Unstructured data (things like external emails and social media) is becoming a larger portion of the big data pie every year. In a 2005 report, Gartner Research indicated that unstructured data comprised about 80 percent of all available data in an organization. Fast forward a few years, and that percentage is likely much higher. The challenge we face as investigators is how to best use this unstructured data in our investigations. The solution begins with the collaboration between data analytics and digital forensics, as referenced in my post in February on that topic.

As highlighted in a recent article posted on venturebeat.com, the Detroit Crime Commission (DCC) has embraced this collaboration as well. The article and accompanying video cover the general framework of how the DCC is using analytics of both structured and unstructured data for fighting crime. While the article is focused on a specific software solution, it contains valuable information about the DCC’s mindset and reasoning behind the use of what they call big data analytics. This information is applicable regardless of software choice, industry or location. Some key conceptual takeaways from the article include:

  • Network analysis and relationship mapping. Using information gathered from online sources, the DCC identifies criminal enterprises and their members, as well as how the various organizations interact. Applying this to occupational fraud, identifying the network and relationship map for key vendors, employees and customers may help in uncovering corruption and kickback schemes.
  • Analyzing both unstructured and structured data. Rather than relying solely on criminal databases and arrest records, DCC uses information from online posts to supplement their structured information and gather intelligence not otherwise available. Applied to occupational fraud, the analysis of email communications, text messages and chat sessions may provide information regarding unknown relationships or activities not identifiable in the transaction detail.
  • Data visualization. The video accompanying this article shows a great example of using data visualization to uncover relationships and “see the data” more quickly than traditional methods. The old saying that “a picture is worth a thousand words” is truer than ever in data analytics. Using data visualization helps identify trends, patterns and relationships not readily identifiable in reading through large volumes of data. This technology can truly help an investigator see the issues in the data.

The application of data analytics in law enforcement is a great example of leveraging big data. The DCC’s success using these concepts underscores the importance of proactive monitoring and analysis of data for fraud detection and prevention. 

Follow Jeremy on Twitter @j313 or at BKDForensics.com.

New Report Reveals Data Analysis as Most Effective Anti-Fraud Control

Download the Report today.

Download the Report today.


John Warren, J.D., CFE
ACFE VP and General Counsel

It may be better and cheaper to prevent fraud than detect it, but it’s a fact of life in any organization that fraud will eventually happen. The tools we use to detect fraud are critically important. Data from the ACFE’s recent 2014 Report to the Nations on Occupational Fraud and Abuse suggest that organizations that proactively seek out fraud do a much better job of limiting their losses; whereas those who are reactive – relying on external or passive detection methods – tend to experience much larger fraud costs.

For those not familiar with the Report to the Nations, it is a bi-annual study based on actual cases of occupational fraud, with detailed information supplied by the Certified Fraud Examiners (CFEs) who investigated those cases. The 2014 Report contains data from 1,483 frauds that occurred in more than 100 countries.

We identified 18 common anti-fraud controls and asked our respondents which, if any, of these controls had been implemented by the victim organizations at the time their frauds occurred. We then compared the median loss and median duration of frauds based on whether each control was or was not present. 

What we found was that every control was associated with a significant reduction in median losses, ranging from 20% to 60% per scheme. Each control was also associated with faster fraud detection. (For a full list of our results, see page 38 of the Report.) This analysis is not a perfect measure of control effectiveness – remember, we’re looking only at frauds that have occurred, so we’re not able to measure the preventative impact of controls. But our data strongly suggests that anti-fraud controls have a measurable impact in reducing fraud losses. 

The control that scored the highest in our 2014 study was “proactive data monitoring and analysis.” Organizations that utilized proactive data monitoring experienced frauds with a median loss 60% lower than those without this tool, and they detected fraud 50% more quickly. Unfortunately, only a little more than one third of the victim organizations in our study conducted proactive data monitoring for fraud.  This low implementation rate may be a factor of cost. A typical small business may not have the financial resources or personnel necessary to conduct proactive monitoring. When we focused on larger organizations (those with 10,000 or more employees) we found a stronger implementation rate of 49%, but that still means half of the largest, most well-financed organizations were ignoring this tool. 

In the 2014 Report we’ve included a wealth of information about how frauds are committed, the highest risk areas for various departments and industries, and the characteristics of those who commit these crimes. We encourage readers to use this information to help determine where their organizations are most vulnerable to fraud, and then use the data we’ve gathered on controls and detection to design systems that will give them the best chance of catching these crimes early and limiting fraud losses.  

Find more details and read more Report findings at ACFE.com/RTTN.