Running Head: Fraud Prevention and Detection of Identity Theft 1

Fraud Prevention and Detection of Identity Theft

By

Verna M. Arts

AIU Online
Fraud Prevention 2

This paper is to assist an undisclosed College University in dealing with the fraudulent

act of identity theft. Unfortunately, it has internally affected 15 professors' credit reports of

fraudulent purchases such as purchasing and applying for: cars, student loans, credit cards,

houses and just within a month’ time. An inquiry began when professors reported on numerous

billings for items they never purchased. Therefore, it was fair to assume that for this to affect so

many professors, that it was fair to assume that there was a breach within the University’s

internal infrastructure. The fraudster could be an employee or someone closely connected to

financial dealings (cashier or top executive) or someone privy to social security numbers, such as

a personnel employee for example. Therefore, the auditor is now under the impression that any

employee could be committing fraud, including all levels of management. (acfe.com, n.d.) This

is why it is very important not to inform the staff, or management of an audit while being

performed. In addition, until there is proof to back-up the allegations with sufficient evidence to

substantiate the claim of fraud.

A case theory approach is an investigator's analyzes on available data (the details of the

allegations). A major part of the fraud investigation is gathering evidence to support the

position that the alleged fraudulent act was intentional. In doing so, he/she creates a basic plan

by initializing a hypothesis, or theory as to the initial link to purchases from the professor’s

credit cards.

The examiner makes assumptions based on several test theories and with the triangle

model theory. For example, the offender expects to use the professor’s identity to gain items
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such as cars and student loan benefits under their good credit and name. The investigative

methods used to identify the perpetrator(s) of these crimes would be to start with the Triangle

Method by weeding out the suspect’s characteristics of a potential fraudster. Those

characteristics of a fraudster are:

Pressure – The stressors placed on those that have real-life battles with financial

problems. The result is having too many bills and not enough income, or poor handling of

money. Problems related to gambling or drug addiction, or even alimony payments not met.

Rationality – Rationalizing the reason for their behavior while never taking responsibility

for their actions. Reasoning such as the company owes them, or they have been a loyal

employee, or the company never gives them a raise; or not given a promotion.

Opportunity – Here is where the plot thickens, they now have access or a means to gain

access to private information that they can use to their benefit. Say for instance a cashier who

handles credit cards swipes the card but uses the receipt to copy down the credit card

information.

Therefore, the examiner uses these tools to find out who has benefited lately with these

items. Performing a background check on the suspect will give more weight to the examiner’s

claim of fraud. In addition, the checking of their bank accounts will show if there have been any

unexplained entries to their accounts covering the period of the theft. This information can be

crossed-checked by the professor’s checking account as well. The thief could be taking money

from the professor’s account and depositing it into the thief’s account. Not all criminals are

smart because if they were they would not leave a paper trail that leads back to them.
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The gathering of real evidence is the first step in investigating a fraudulent act and

following the paper trail would be the next step in investigating this crime and then narrowing on

the suspect’s modus operandi.

Secondly, interviewing the 15 Professor’s that were scammed could shed light as to

where and what card they frequently used while in the University within the last two months or

so. While looking into traits of a fraudster, it is wise to view the items that were purchased with

the description of the items it could narrow the suspect list to a minimum. Say for instance there

is a student loan application being used, this narrows it down to a parent trying to pay for their

child’s education, or an employee/student already in school trying to access more money through

illegal means. As mentioned earlier about a paper trail, all purchases made through stealing the

identities of these professors has to mailed or shipped to an address, unless it’s a P.O. Box and

even that can be traced to someone. Therefore, the more orders placed, the more likely it will

lead back to the thief. For example, shipping packages to Africa would be harder to trace.

The third step is after the investigation, which instructs the company and its employees

on how to stay safe by offering their expert advice and knowledge as to how to keep the business

fraud-free, and what precautions to take in the process.

• After this ordeal, the professor’s will probably be more aware of their

personal information being exposed or being vulnerable to access. In addition,

the University will need to implement a better security procedure into effect.

In the future, the professor’s should do the following:

• Only use one credit card at a time, leave the others home and in a safe place.
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• Sign your credit or debit cards with a unique signature and give this signature

to your bank to verify that this is your signature.

• Never carry your social security card around; it makes it easy for those to gain

your identity.

• Sign up for credit alert companies that watch for fraudulent activity online and

through your personal accounts.

• Change your password to your credit cards every six months to a year, it costs

nothing to have your credit company or bank issue you another password.

• If the University wants their employees and their stockholders to gain faith in

their system then the following measures should take place immediately:

• Better Management control

• Perform a risk assessment on a regular basis

• Better screen process for future employees’ background check

• In addition, implementing and accessing the following procedures: Preventive,

Reporting, Control, Accounting, Economic, and Detection.

Normally, this act of thievery is called larceny, and depending on which state the offense

was committed depends on the severity of the crime, and by how much damage was caused

monetarily. This act can range from a misdemeanor to a felony which carries a year or more

behind bars, plus a fine.

For offender’s caught in the act and punished by the judicial system should know that

even though they will pay for their crimes, it will never justify or make up for a person who has

to rebuild their credit history and their reputation. Furthermore, the victim’s whose identity was
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stolen will be put through so much bureaucracy in order to clear up the illegal misrepresentation

of their name.
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examination (5th ed.). Mason, OH: Cengage/South-Western.
Holtfreter, K., Piquero, N., & Piquero, A. (2008). And justice for all? Investigators’ perceptions
of punishment for fraud perpetrators. Crime, Law & Social Change, 49(5), 397-412.
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