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Fraud Talk: A Conversation With the “Original Internet Godfather”

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During the closing session of the 32nd Annual ACFE Global Fraud Conference, John Gill, vice president of education at the ACFE, spoke with convicted fraudster* Brett Johnson, who shared stories from his life as a cybercriminal. After being placed on the United States Most Wanted List, captured and convicted of 39 felonies, he escaped prison. Captured again, Johnson served his time and accepted responsibility. In the excerpt below from the full transcript of episode 109, Johnson shares some advice for companies as cybercrime continues to evolve and grow. Download the full transcript in PDF form or listen to the episode at the bottom of this post.John: We'll stay with a larger issue, one thing I do think is interesting is the idea of organization because I think, at least in…
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4 Ways to Detect Fraudulent Transactions Using Behavioral Economics

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GUEST BLOGGERDebanjan ChatterjeeThe design of effective anti-fraud solutions requires a clear understanding of fraudsters’ psychology. Additionally, a strong grasp of cognitive, emotional, cultural and social dimensions goes a long way in deciphering the modus operandi of criminals.This is where behavioral economics comes in. If you’re not familiar, behavioral economics studies the decision-making processes of individuals and how their choices differ due to various nuances of emotional states, cognitive ability and personality.In the context of fraud risk, such subtleties have the potential to illuminate a wide variety of crime trends, which in turn, can aid with your organization’s design of anti-fraud solutions. Here are four ideas from behavioral economics that can help you spot fraudulent transactions.1. Loss aversionStudies have shown that our response to loss is stronger than our reaction to a similar…
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How Fraudsters Exploit the Capabilities of Contract Employees to Conduct Their Schemes

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GUEST BLOGGERRaina Verma, CFEIf you are familiar with fraud, you may be acquainted with The Fraud Triangle, which is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, when brought together, can lead to fraudulent behavior: opportunity, pressure and rationalization. There’s an extension of this fraud theory, known as the fraud diamond, which includes a fourth element: capability. Capability refers to someone having the necessary traits, skills and abilities to commit fraud. It’s how the fraudster not only recognizes a particular fraud opportunity but turns it into reality. With experience in fraud risk management, and specifically investigations, fraud examiners can see the fraud diamond capability in a new light. Capability, as described above, can be exploited by anyone with authority…
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