PONZI SCHEME: AN EPIDEMIC?

Ponzi scheme is a type of investment scam whereby perpetrators deceive their victims into believing in their pyramid scheme and entrust them with their hard earned money and other resources. The term Ponzi came after an Italian fraudster named Carlo Charles Ponzi, born in 1882.


Though, Bernard Madoff’s scandal created awareness of the resurgence of Ponzi scheme yet a lot of people still report cases of being victims of modernized Ponzi scheme. Bank accounts and retirement accounts have been drained as a result of the activities of these financial predators.

CAUSES OF PONZI SCHEME

The primary cause of Ponzi scheme is greed. This is true both from the perspective of the victims and perpetrators of Ponzi scheme. Individuals and corporate bodies would not be defrauded if they hadn’t craved to make unrealistic return from their investment. One common feature of Ponzi scheme is the promise of triple return or more.

The second principal factor that is responsible for the existence of Ponzi scheme is ignorance. People are oftentimes ignorant of the activities of the perpetrators of Ponzi scheme. This is where the forensic accountants and fraud examiners really come in. it is part of the duties of forensic accountant to educate the populace. Everyone cannot be a forensic accountant or a fraud examiner but with our help as fraud fighters, they all need information on the activities of fraudsters at all time. If you call yourself a fraud fighter or forensic accountant and you are educating people on the activities of fraudsters and how to prevent fraud, then you are not whom you claim to be.

Fraud examiners should continually look out for signs of fraud and immediately relate same to all those that look up to them for professional advice.

Unless we all team together to fight this phenomenon, Ponzi scheme will still continue to an epidemic that will continue to virally spread. All pointers are pointing to the fact that those saddled with the responsibility of eradicating fraud and Ponzi scheme are not doing their best. If this remains this way, I would then say that Ponzi scheme is not only an epidemic but a pandemic. Some people have even coined a word for this situation; Ponzi-demic.

But do you know what? There is hope as many fraud fighting professional bodies that we have today are beginning to take the bull by the horn. You too can become a fraud fighter today by buying any of the books displayed below.















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OCCUPATIONAL FRAUD IN SMALL AND MEDIUM BUSINESSES

Occupational fraud is the kind of fraud committed by employees of a company. This kind of fraud is also known as insider fraud and is always difficult to control in a situation where a company’s internal control is relatively weak. Small and medium sized businesses are particularly prone to falling to the tricks of occupational fraud perpetrators.


There are conditions that must be met before occupational fraud could take place. Those three conditions are what are called the fraud triangle. They are opportunity, pressure and rationalization.

Occupational fraud has singly accounted for over 40% of the totality of frauds that has taken place in business community as a whole. It takes the activity of an insider for an outsider to successfully operate. Many company and businesses have started taking the right action in the right direction to combat this ugly situation by engaging the services of forensic accountants and other fraud fighters.

The presence of forensic accountants and fraud examiners in a business instills fear in the mind of workers thereby making them do their possible best to stay away from occupational fraud of all kind.

Good internal controls and high spirit of workforce is the key to curbing occupational fraud. It is not just enough for people to state rules, principles, and procedures on paper without implementing it. The contents of the internal control ‘bible’ should be implemented to the letter. Management should be prepared to adhere to the advice proffered by the internal control experts in the advisory board.

Access control and other security issues should be taken seriously by all that really wants to squarely face occupational frauds. Access control simply means restricting how resources are used in a business. There is the physical and logical access control. The physical access control deals with the physical protection given to assets, while logical access deals with rights to access information via the computer and other network devices.

Again, education of staff members can help reduce occupational fraud in small businesses. Educating your workers will place them in a situation to recognize fraudulent activities whenever they see them going on.

Establishing and upholding good corporate governance is another good tool to fight occupational fraud in our businesses. With good corporate governance in place, occupational fraud will have no place to hide its ugly work in our company. Good corporate environment will enhance the working experience of workers and make them become more productive in their work.

The company that I worked for as a forensic accountant successfully fought occupational fraud by creating a conducive work environment.

Occupational fraud is a threat to business community as a whole and needs to be seriously dealt with. It begins from you, learn the basics of fraud fighting today and be glad you did.

The following books can be bought to leanr more
Third highest occupational fraud rate afflicts health care.(PRACTICE TRENDS): An article from: Family Practice News

Or better still, Search Amazon book shop by following the link below.

Search Amazon.com for occupational fraud