Sunday, December 6, 2009

How Do You Recover Funds Lost to Fraud

When developing a Fraud Control Policy an important part of that plan is determine if it is possible to recover funds that the organisation has lost to fraud. A number of issues need to be considered:
  • Does the organisation have insurance for fraud? This has been discussed previously. If the organisation has insurance for fraud, remember that cash flow potentially could be affected until such time as a payment is received.
  • Determine if it is economically viable to take civil recovery proceedings. If the fraudster has a gambling or other addiction it is unlikely that funds will be available. However, if the fruadster has purchased a property or utilisied the funds in some other similar way, funds may be available for recovery. The organisation must remember that the funds that have been taken are the organisations. The organisation should not “feel sorry” for the fraudster.
  • When the fraudster is found guilty, the court may order restitution. However, in this case the organisation must wait until the matter has been through Court. This may take 18 months or more. In this time, the fraudster may have disposed of any funds and assets that they have owned. This is the least favourable of the three alternatives.