This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ance
health, and workers
7. Overstated refunds
or bogus refund
8. Fictitious expense
Note: Reference List Textbookequests.
r Section 5061 1. Multiple payments to
the same payee.
2. Multiple payees for
the same product or
3. Ghosts Employee –
persons on payroll
that do not show up
for work at the
4. Inflated invoices.
5. Shell companies.
Chapter 5 Forensic Accounting 82 Price Manipulations Land
A company wants to
purchase some land.
A person of trust uses inside
information to purchase the
He than sells the land back to
his company at an inflated
price Chapter 5 Forensic Accounting 83 Price Manipulations Pump ‘n
Dump manipulate the
A technique used to price of thinly traded stock commonly
called “penny stock” or “pink sheet
The fraudsters hype the stock with
bogus press releases and misleading
Once the stock prices reaches a high
level the fraudsters quickly sell their
entire position realizing a huge profit
and leaving the “victim investor” with
nothing. Chapter 5 Forensic Accounting 84 Price Manipulations
Cybersmear price of a
technique used to drive the A
stock down, that the fraudster are selling
short. The fraudsters smash / smear the stock
The bad news will cause the stock price
to fall allowing the fraudster to cover the
short position resulting in the realization
of a huge profit.
Chapter 5 Forensic Accounting 85 Price Manipulations Money
Laundering A technique used to disguise the true
nature and source of the funds. There
are 3 Stages of Money Laundering
•Placement –The introduction of the money
into the financial system.
•Layering -A series of transactions that
conceal the owner of the money, where the
money came from and will discourage law
•Integration - Receiving the money back with
appearance of beingForensic Accounting
appearance 86 Price Manipulations Bid
This occurs when a vendor is given
extra information that creates an unfair
advantage in an open competitive sealed
Often rigging schemes include giving
the employees with inside information
kickbacks, bribes, or other forms of
compensation in return for this “extra
Chapter 5 Forensic Accounting 87 How is Bid Rigging Caught ?
Rotation of Purchasing Agents
Policies Prohibiting Gifts From
Mandate a Cone of Silence During:
The Pre-Award Chapter 5 Forensic Accounting 88 Fraud Detection
Programs Note: Reference Textbook Section 5071
View Full Document