1. KPMG ANALYSIS OF GLOBALPATTERNS OF FRAUD Who isthe typicalfraudster? kpmg.com1 | KPMG - Prole of a Fraudster

2. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network ofindependent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved. 3. ContentsIntroduction 1Methodology2What our analysis revealed 3Motivations for fraud9Warning signs13Size of the crime15Duration of fraud16Raising awareness18Fraud is up; defenses are down 21Red ags not to be missed22Further guidance on how to keep your business safe 23 The information contained herein is of a general nature and is not intended to address the circumstances of any particularindividual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that suchinformation is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on suchinformation without appropriate professional advice after a thorough examination of the particular situation. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network ofindependent rms are afliated with KPMG International. KPMG International provides no client services. No member rm has anyauthority to obligate or bind KPMG International or any other member rm vis--vis third parties, nor does KPMG International haveany such authority to obligate or bind any member rm.All rights reserved.The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International.KPMG Forensic is a service mark of KPMG International. 4. IntroductionWho is the typical fraudster? Are there anydening features, traits, or behaviors that couldhelp you to identify those individuals within yourorganization more likely to perpetrate fraud?If only it were that simple Here is what we found out about the typical fraudster:KPMGs 2011 global analysis of fraud trends can help you to Maledraw inferences. We have narrowed down the prole of a typical 36 to 45 years oldfraudster, based on scrutiny of actual instances of fraud, to help Commits fraud against his own employerorganizations like yours become more alert and responsive to fraud. Works in the nance function or in a nance-related roleKPMG Internationals 2011 study follows our 2007 analysis of Holds a senior management positionfraudulent behaviors within the Europe, Middle East, and Africa Employed by the company for more than 10 yearsregion (EMA). Our last report proved so popular that we have Works in collusion with another perpetratornow extended our analysis worldwide. We have sought to identifypatterns among individuals who have committed acts of fraud As in 2007 unsurprisingly, the overriding motivation for fraud ,and contrasted the value and duration as well as many other is personal greed, followed by pressures on individuals tocharacteristics.reach tough prot and budget targets. The survey highlights,more importantly, how weakening control structures make theOur research is based on 348 actual fraud investigations conductedopportunity to commit fraud easier. Organizations should takeby KPMG member rms in 69 countries. While it includes some some of the blame. For them, it is time to consider how theyhigh-prole reported cases of fraud, for the most part, these contribute to fraud when failing to detect or respond to lapsesinvestigations were not publicized. The sample is very broad in the or gaps in controls, or by setting overly onerous targets.size and scope of fraud committed and is far-reaching in terms ofthe sectors and geographies covered.Read on to nd out more about the potential fraudsters. Discoverwhich red ags to look out for and how to implement moreeffective measures to manage the prevention and detectionof fraud and your response to it.Phillip D. OstwaltGlobal and Americas Investigations Network LeaderRichard PowellEMA Investigations Network LeaderMark LeishmanASPAC Investigations Network Leader 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.1 | KPMG - Prole of a Fraudster 5. MethodologyKPMG gathered data and details from fraud investigationsconducted by our rms forensic specialists in EMA,the Americas, and Asia Pacic from January 2008 toDecember 2010. In all, 348 cases from 69 countrieswere analyzed.White collar crimesThe analysis identies:From the thousands of fraud investigations conducted by KPMG Fraudster proles and details of more common types of fraudForensicSM, data has been collated relating to a sample comprising Conditions that tend to enable fraudwhite collar crimes with a clear perpetrator. The frauds included Typical follow-up actions by organizations impacted by fraudin this analysis comprise material misstatement of nancial results,theft of cash and/or other assets, abuse of expenses, and a rangeThe ndings in this report are contrasted, where possible, withof other fraudulent acts.our 2007 analysis to highlight shifts in patterns and to provide some perspective on emerging trends and behaviors.Excluded from the sample are frauds considered to be of nomaterial value, acts of misconduct or those where fraud could notThis report does not reveal the names of parties involved, in orderbe substantiated during the investigation, as well as cases lackingto protect condentiality. Many of the cases included here did notsufcient detail.reach the public domain; others reported only headline details of the fraud. This is fairly typical in our experience. All monetary values are expressed in U.S. dollars. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 2 6. What our analysis revealedTypically, a fraudster is perceived as someone who isgreedy and deceitful by nature. However, as this analysisreveals, many fraudsters work within entities for severalyears without committing any fraud, before an inuencingfactornancial worries, job dissatisfaction, aggressivetargets, or simply an opportunity to commit fraudtips thebalance. Heres what we found.Individual proleAgeOur survey nds that the typical fraudster is between the ages Age of Fraudster2007 Survey 2011 Surveyof 36 and 45. This group rose from 39 percent of cases in 2007 to18 to 25 years old 3%2%41 percent in 2011. This is closely followed by a group accounting for35 percent of fraudsters who were between 46 and 55 years old. 26 to 35 years old 14%12%Gender 39% 36 to 45 years oldWhile men were found to be more likely perpetrators of detected 41%fraud (85 percent in 2007 and 87 percent in the 2011 analysis),31% 46 to 55 years old 35%women in the Americas (22 percent) and Asia Pacic (23 percent)are almost three times more likely to be involved in fraud than in 13% Older than 55 years10%EMA (8 percent). This might be due, perhaps, to fewer women insenior positions in old Europe and Africa compared with otherregions of the world.The surveys nding that men commit more fraud than womenseems a reection on the gender make-up of companies generally.The gender gap in fraud perpetration may reect womensunder-representation in senior management positions and,as a consequence, fewer opportunities to commit fraud. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.3 | KPMG - Prole of a Fraudster 7. Rank within the organizationWhere the fraudster worksWithin the fraud matters we analyzed, we found the people The survey nds that most people involved in committing fraudmost often entrusted with a companys sensitive information and work in the nance function36 percent in 2007 compared withable to override controls are statistically more likely to become 32 percent in 2011. Access to and responsibility for corporateperpetrators. This is borne out by survey evidence that seniorassets, nancial reporting, and credit lines all offer signicantmanagement is more frequently implicated in fraud thantemptation and opportunity to commit and conceal acts of fraud.junior staff.After nance, fraudsters are most likely to work in the chiefIn 2007 the EMA survey found that 49 percent of all fraudsters ,executives/managing directors ofce (26 percent up fromheld senior management positions. While senior managers 11 percent in 2007) or in operations and sales (25 percent in 2011remain the most likely fraudsters according to the 2011 analysis, down from 32 percent in 2007). Employees in the legal functionthe overall percentage fell to 35 percent. Conversely, however, continue to be the least likely perpetrators.board level perpetrators increased from 11 percent to 18 percentbetween 2007 and 2011.Rank within the organization2007 Survey Where the fraudster works2007 Survey2011 Survey Research & 2011 Survey 14%3%StaffDevelopment1%18% 9% Procurement8%Management26% 29%32% Operations/Sales 25%49%Senior Management2%35%Legal 0% 11%36%Board memberFinance 18% 32%11% CEO 26%2% Board level 7% Back ofce5%1% 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.Prole of a Fraudster - KPMG | 4 8. View fromCentral and Eastern Europe How does the global survey reect controller) falsied nancial records for more than ve years. regional ndings? Turnover was boosted (in some years by as much as In Central and Eastern Europe (CEE), many multinational 70 percent) by ctitious customer contracts, while payments companies have tended to transfer trusted expatriate were made to ctitious suppliers. Funds were continually employees from the parent company into key nancialrecycled to create false revenue that kept the company positions at their subsidiaries in the region, to provide notgoing. only the necessary experience, but also to police the The parent company invested further cash into the business subsidiary from within the nance function. They act asunder the illusion that it was operationally sound and whistleblowers, the initiators of investigations. Often they securing contracts. are further transferred from region to region as the company Further funds were misappropriated for the personal sets up new operations to ensure the ongoing integrity ofuse of the general manager and nancial controller. the nance function, says KPMGs head of Forensic in CEE, Jimmy Helm. The subsidiary had actually lost its license to trade in 2007in a key market but had concealed this from the parent The region therefore bucks the global trend. Fewer frauds occurcompany. within the nance function, while most are committed within sales and procurement. Collusion with third partiesclients and The general manager and nancial controller were dismissed suppliersis evident in many fraud cases in the region. and criminal and civil charges brought against them. The client further engaged KPMG to restate the subsidiarys nancial Helm comments: Lack of trust in local regulatory and records back to 2005, to support disclosures to the relevant judicial systems often results in affording the perpetrators stock exchange and to make appropriate nancial adjustments an opportunity to resign without the offense going to court to the parent companys nancial statements. or becoming public. Consequently HR references are unable to address the disciplinary issues, and poor background Helm is responsible for KPMGs services in the 18 former checking allows these fraudsters to re-enter the business Soviet-bloc countries. Based in Prague in the Czech Republic community. for the past 11 years, he was formerly a senior prosecutor of white-collar crimes in the High Courts in South Africa. Helm has 17 years experience in leading fraud, misconduct, and Most interesting fraud investigationbribery/corruption investigations. In addition to heading up In 2010, the Forensic practice in CEE was engaged by a foreign- investigations, he advises clients on fraud risk strategies listed client to investigate irregularities at a subsidiary in CEEand on anti-bribery and corruption initiatives. too small to warrant a separate nancial audit. The investigation found that local management (the general manager and nancial Contact Jimmy Helm: +420 222 123 430 jhelm@kpmg.com 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.5 | KPMG - Prole of a Fraudster 9. Lack of trust in localregulatory and judicialsystems often results inaffording the perpetratorsan opportunity to resignwithout the offense going to court or becoming public. comments Jimmy HelmTime at the organizationIn 2007 36 percent of fraudsters were likely to have worked at , Time at the organization 2007 Surveya company for between three and ve years before detection of4%2011 Survey Less than 1 yearthe fraud. In 51 percent of cases, they worked at the company for 1%more than ve years and, in 22 percent of cases, for more than9%1 to 2 yearsten years. 10% 36%In 2011, the analysis shows an increase in the detection of fraud 3 to 5 years29%among longer-term employees. It reveals that 60 percent of29%fraudsters worked at the company for more than ve years before6 to 10 years27%the fraud was detected, while 33 percent of fraudsters worked 22%there for more than ten years.More than 10 years 33%Given that fraudsters usually work for their employer for over veyears before discovery, whereas the average fraud has occurredfor just over three years by the time of its discovery, it is plausiblethat those who commit fraud often do not join organizationswith the intent to commit fraud. However, changes in personalcircumstances or pressures to meet aggressive work targets mayinuence the onset of fraudulent activity. They may then commitfraud once they have their feet comfortably under the table, whenthey have gained the trust and respect of colleagues and haveidentied weak controls and opportunities to exploit the business. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 6 10. Organizations need to recognizethat fraud does happen. With arobust compliance program andprotocols for prevention, detection,and response, they will be betterable to deal with it and move on.explains Graham Murphy View from the United States How does the global survey reect Most interesting fraud investigation regional ndings? At a U.S. nancial institution, a larger-than-life chief executive surrounded himself with an inner circle of yes men The. In the United States, the archetypal fraudster closely mirrorsfraud, which involved subterfuge and complex bundling and the prole identied in the global survey: male, senior unbundling of loans and transactions to make bad loans appear executive, long-term employee. We nd the higher the level good, was exposed in part by the dwindling value of collateral of executive, the greater the value of the fraud. Greater and related property values in an eroding economy. oversight responsibility often offers greater opportunity for bigger frauds, explains Graham Murphy, who heads up The investigation quickly uncovered conicting stories told by KPMGs Forensic Services practice in the U.S. rms Midwest the CEOs inner circle and the people working with the loans region. and customers. This case illustrates, in particular, how dominant and bullying behavior can coerce others to participate in Detection of fraud involving collusion with outside parties has fraudulent activity. increased signicantly in U.S.-based companies in recent years. Murphy attributes this in part to anti-bribery and corruption Lessons are learned from investigations such as this. Increased initiativesnotably the Foreign Corrupt Practices Act (FCPA) knowledge, and tools developed to uncover such schemes, and task forces designed to clamp down on misconduct. can be transferred to other nancial institutions to seek out More and more of these cases are coming to light proactively weaknesses in their internal processes and controls because of increased enforcement capabilities, he explains. so that they can fortify their own compliance programs. Corporate America is becoming very focused on this issue Specically, tools have been developed to provide better insight as companies build out their compliance programs andinto loan portfolios and more proactive identication of bad enhance their awareness of and responses to fraud and loans and potentially fraudulent activity. misconduct. Following a period of regulatory oversight, another nancial As fraudsters are often one or two steps ahead of complianceinstitution took over certain of the banks assets. programs, Murphy stresses the need for organizations to Graham Murphy leads the U.S. rms Midwest Forensic understand their vulnerabilities, to patch holes in their defensespractice. Since 1991, his experience crosses Europe, Asia, and when detected, and to look proactively for red ags and other North and South America and includes nancial investigations indicators of fraud.involving earnings manipulation, accounting irregularities, theft Organizations need to recognize that fraud does happen.and misappropriation of assets, and conict-of-interest issues. With a robust compliance program and protocols forHe has provided testimony to the Securities & Exchange prevention, detection, and response, they will be betterCommission (SEC) and has appeared as an expert witness in able to deal with it and move on. fraud cases. Contact Graham Murphy: +1 312 665 1840 grahammurphy@kpmg.com 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.7 | KPMG - Prole of a Fraudster 11. We nd that most fraud continuesto be committed at senior and middle-management levels. explains Anne van HeerdenView fromMost interesting fraud investigation KPMG in Switzerland is helping to resolve a case involving anSwitzerlandindividual who invested heavily into a business for more than ten years. When he failed to receive dividends and returns on his investment and needed to make tax declarations, he hiredHow does the global survey reectKPMG to undertake a high-level audit.regional ndings?The client had been led to believe that he was one of aWe nd that most fraud continues to be committed at number of investors. However it soon became apparent thatsenior and middle-management levels, says Anne vanhe was the sole creditor to the business. His investmentsHeerden, head of Forensic at KPMG in Switzerland. Morewere certainly not working for his benet explains vanfrequently, collusion with external parties is also evident Heerden. That is when KPMG Forensic became involved.notably among suppliers who over charge for their services The fraudsters had siphoned off the clients money over aand give a kick-back to the internal perpetrator. number of years to fund their extravagant lifestyles. Switzerland is renowned for its nancial services industry and Anne van Heerden is head of Forensic, Risk and Complianceit is here where many fraudsters operate. Fraudsters attemptat KPMG in Switzerland. Working with KPMG since 1986,to extract money from dormant accounts or they assumehe has led many national and international economic crimethe identity of a customer to trick advisers into making investigations across several industry sectors. His cases includepayments or transfers. Often this involves the collusion ofprocurement fraud, manipulation of nancial statements andan external party with an internal ally, explains van Heerden.other nancial irregularities, tax fraud, bribery, as well as misuse of position and funds, often across multiple borders.Family ofces in Switzerland are also becoming targets forfraudsters. Submissions of fraudulent invoices by suppliers, or Contact Anne van Heerden:awed investment activities, are among the most typical frauds.+41 44 249 31 78Perpetrators tend to be employees and outside agents such asinvestment advisers rather than family members. annevanheerden@kpmg.comGoing solo or in collaboration?In 2007 69 percent of perpetrators were employed by the, Interestingly, the survey nds that male perpetrators (64 percent)organization they defrauded. This rose massively to 90 percentare almost twice more likely to collude than women (33 percent).in the 2011 global survey.After taking account of male dominance in the perpetratorgroup, collusive females account for just 4 percent of activity.There has also been a dramatic increase in the likelihood ofPerpetrator groups are most typically all-male or mixed gender.collusionalmost doubling from 32 percent of perpetrators in2007 to 61 percent in 2011. By denition, collusive activity isharder to detect as it involves circumvention of the controlsystem by two or more parties.Lone fraudster, or colluding with others? AmericasAsia PacicWhere colluding parties are external to, rather than employed EMAby, the defrauded entity, these are most commonly suppliers66% 59%(48 percent) and customers (22 percent), according to the 201158%analysis. Consultants and sub contractors make up the majority42%41% 34%of the balance.In parts of EMA, the analysis reveals a more marked pattern ofcollusion between employees and suppliers of the victim Working aloneColluding with othersorganization than elsewhere in the world. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 8 12. Motivationsfor fraudThe desire for personal nancial gain, directly orindirectly, continues to be the biggest driver offraud according to the survey.Greed and work pressuresAttempts to conceal losses or poor performance (possibly due to Entities, though they can control their own cultures, are subjectpressures to meet budgets and targets, to enhance bonuses, or to outside inuences on employees. In particular, organizationsto safeguard against loss of employment) provide motivation for should be mindful of the impact of mounting personal nancialmany frauds, notably those involving the misreporting of results. pressures on employees due to the global economic crisis. In moreaustere times, formerly trustworthy employees affected by adverseMisappropriation of assets, notably due to embezzlementchanges in their personal circumstances might be more temptedand procurement fraud, accounted for 43 percent of the fraudsto commit fraud when they spot an opportunity.surveyed in 2011. This echoes the ndings in 2007 In second place .is fraudulent nancial reporting, which again raises concerns about Given that in the frauds we analyzed that it took, on average,the pressures placed on management to achieve targets.nearly three and a half years between fraud inception anddetection, it seems that there may be a signicant increase inCompanies that fall victim to misreporting and other types of fraudnewly detected cases over the next few years due to current andshould consider whether they set too onerous targets and exertrecent increased nancial hardship.excessive pressure on employees to achieve them. Faced withcriticism about underperformance or concerned by the threat ofa reduced bonus or loss of employment, staff might be temptedto hype up their performance by misstating results or to guardagainst potential nancial hardship by defrauding the business.There tends to be less fraud in companies that make intoleranceof fraud part of the corporate culture and which set realisticand achievable targets for employees. It is important, however,that the corporate culture is cascaded across the organizationby management who act, at all times, in accordance with thecorporate values. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.9 | KPMG - Prole of a Fraudster 13. One of the most signicantndings of this survey is thevery large increase in cases involving the exploitationof weak internal controls byfraudsters up from 49 percentin 2007 to 74 percent in 2011.Gaps in defensesOne of the most signicant ndings of this survey is the very That one in seven frauds is now discovered by chancelarge increase in cases involving the exploitation of weak internal puts question marks over the effectiveness of controls andcontrols by fraudstersup from 49 percent in 2007 to 74 percent management review at detecting and preventing fraud. In 2007 ,in 2011.8 percent of frauds were discovered by accident, rising to13 percent in 2011. The upshot is that companies seem to dependThe difcult economic climate may be partially to blame. Tighterincreasingly on the good consciences of staff or third parties, onbudgets are forcing some companies to cut costs in their controlaccidental discovery or, in a few cases, on confessions, to identifyenvironments. Less robust controls, and fewer resources topotential fraud. In aggregate, these methods account for detectionmonitor controls, allow for greater exploitation by fraudsters.in just over half of the frauds in the 2011 survey.Although necessary to preserve prots, such cost cuttingshould be balanced with effective risk management.Many frauds continue to be exposed by formal or informal Methods used to override controls 2007 Survey 2011 Surveywhistleblowing mechanisms. In 2007 companies were alerted to, Weak internal49%controls exploited74%fraud by whistleblowers in one-quarter of cases, with complaintsfrom customers or suppliers accounting for a further 13 percent. Reckless dishonesty 36%regardless of controls 15%In 2011, formal internal whistleblower reports accounted for 10percent of detections while anonymous tip-offs were responsible Collusion to circumvent15% 11%for uncovering 14 percent of frauds. A further 8 percent of frauds good controlswere identied due to customer or supplier complaints while6 percent came in response to issues raised by third parties,including banks, tax authorities, regulators, competitors,or investors. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 10 14. It is highly likely, therefore, that many known instances of fraud go unreported. This may be due to staffs unwillingness to report colleagues, to third parties reluctance to make a complaint, or because individuals conclude it is unnecessary to raise a particular issue. Individuals often argue that it is not their place to provide tip-offs; others fear repercussions, such as the loss of their job, especially where the fraud involves line or senior managers or board members. Globally, there are moves to create more formal frameworks to promote whistleblowing. Such initiatives are intended to create more secure environments in which to tip-off. In the United States, for instance, the Dodd-Frank Act (2010) intends to award whistleblowers a bounty worth between 10 percent and 30 percent of nes levied for nancial misconduct. In some parts of the world, there are long-standing protections for whistleblowers. In the United Kingdom, for example, the Public Interest Disclosure Act (1998) protects workers who blow the whistle where there is reasonable belief that a crime has been committed. Such incentives and protections can be helpful, but the fact remains that informal or formal whistleblowing should not be relied upon as principal detection tools. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.11 | KPMG - Prole of a Fraudster 15. Initial red ags are now raised more frequently thanever before, yet responsesto these early warning signs have fallen signicantly. says Richard PowellView fromEMAHow does the global survey reect Most interesting fraud investigationregional ndings? A recent whistleblower case in EMA highlighted precisely whycompanies should create a culture in which individuals feelCausing concern in EMA is the relative infrequency with empowered to raise concerns.which formal control environments and managementoversight detect fraud. An employee only blew the whistle on a manager when heperceived that disregard of health and safety procedures hadRichard Powell leads KPMGs Investigations Network in the endangered the life of a colleague. It emerged, in the courseEMA region. Many of the frauds Ive investigated in theof the investigation, that the individual had also been aware ofpast few years have come to light due to formal or informal nancial impropriety by the same manager for more than a year.whistleblowing reports, he says. Very few, by contrast, He failed to report those concerns until the health and safetyare discovered as a direct consequence of management, issue tipped the balance. In his opinion, the health and safetyinternal, or external audit review. issue was a serious matter to be addressed, while the nancialThe importance of annual fraud risk assessments cannot, infraud was only company money.Powells view, be underestimated. Properly conducted and This whistleblowers response suggests that nancialfocused risk assessments are an opportunity to identify impropriety was lower on his radar in terms of illegal orareas where there are enhanced fraud risks but ineffective or inappropriate activity. Only by raising the prole of whatmissing controls. Remedial action can then be taken to closeconstitutes impropriety, by creating a culture that is intolerantthe gap and to mitigate the risk of fraud. of fraud and where employees feel able to raise concernsAlthough companies in EMA have opportunities to stopregardless of their naturecan such reporting mechanismsfraud before it escalates, red ags are often misunderstood become effective deterrents against fraud.or inappropriately actioned. The fraud typically lasts longer,Richard Powell leads KPMGs Investigations Network in thelosses accumulate, and the costs associated with remediationEMA region. An experienced forensic partner, specializing inincrease. Perhaps the most damning nding of the surveyfraud and impropriety, Powell also advises KPMG rms publicis that initial red ags are now raised more frequently thanand private sector clients on project and program controls,ever before, yet responses to these early warning signs haveperformance improvement, and contract compliance on majorfallen signicantly. Every ignored red ag is potentially a construction and infrastructure projects.missed opportunity to stop fraud.Contact Richard Powell:+44 161 246 4044richardfa.powell@kpmg.co.uk 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 12 16. Warning SignsA red ag is an event or set of circumstances that oughtto alert an entity to the presence of risk. Within theorganization, individuals need to be alert to red agswhat to look out for, how to respond, how to follow-up.By responding appropriately to red ags, fraud can bedetected sooner and, in some cases, prevented altogether. But how often is anything done about a red ag? The number ofRed ags identied and resulting actions taken (2011 Survey) fraud cases preceded by a red ag rose to 56 percent of cases in No prior red ag 2011, from 45 percent in 2007 However, instances where action.Prior red ag acted on Prior red ag not acted on was taken following the initial red ag fell massively. Just 6 percent of initial red ags were acted on in the 2011 analysis, compared with almost one-quarter (24 percent) in 2007. 50% 44% Companies are failing to read and to act quickly on the warning signs. Ignored red ags are a license for perpetrators to carry on 6% operating and a missed opportunity for the business to detect or prevent fraud and to reduce losses and associated costs. Find out which ones your organization needs to address in our guide to red ags on page 22 of this publication. Red ags identied and resulting actions taken (2007 Survey) Rarely is an act of fraud a one-off. With nancial statement fraud, No prior red ag for instance, fraudsters often make multiple transactions to coverPrior red ag acted on Prior red ag not acted on their tracks. In 2007 91 percent of fraudsters were repeatedly,21% fraudulent, compared with 96 percent in the 2011 analysis. Repeated and long-running fraudulent activity may result in several55% red ags over a period. Recognizing and being alert to red ags and24% responding appropriately could save signicant loss of value to the organization from fraud. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.13 | KPMG - Prole of a Fraudster 17. When frauds blow up, its typically several years down the line, when the value of the deception has multiplied and all the warning signs havebeen missed.says Rohit MahajanView fromIndiaHow does the global survey reectHe worked for a minerals company for more than four years,regional ndings?gaining the trust of senior management to such an extent that he was given responsibility for both hedging the priceThe global survey is a good reection of what is going on of minerals in the market and accounting for it in the backin India, says Rohit Mahajan, executive director of KPMGsofce. As a policy, the company did not seek to make a protForensic practice in India.from hedging, but rather to guard against losses in a turbulentThe value of fraud keeps going up in Asia Pacic and that,market.I believe, is because the economy is booming here. The fraudster, deemed a very smart, hardworking, and honestHowever, companies are too focused on the front endemployee, colluded with the companys customers and passed(growing the business) rather than the back end (the support discounts to them. He covered the discounts passed tofunctions) so red ags get ignored or treated as one-offs. customers by transferring prots from his illicit market speculationWhen frauds blow up, its typically several years down the activities, accruing huge sums for himself as a kick-back.line, when the value of the deception has multiplied and allthe warning signs have been missed. Only when he was transferred to another function did his successor uncover the fraud. Although the company confrontedThe global survey found that fraud in Asia Pacic tends to the employee, they decided to take no legal action against him.take longer to detect than anywhere else in the world. Indian companies are reluctant to seek legal redress andMahajan points out that few companies pursue legal remedyprefer separating the fraudsters (employees and externalwhen faced with fraud. Enforcement takes up too muchparties). Action taken by organizations greatly depends ontime, which companies are unwilling to spend. Thetheir outlook and tolerance towards fraud as well as theircompanys response depends on its tolerance to fraud and appetite to deal with law enforcement and legal channels.its appetite to deal with legal channels.says Mahajan.He acknowledges that many companies in India have tightenedThe client engaged KPMG to investigate the extent of the fraud,up their controls in recent years. Rather than whistleblowing or the modus operandi, and the identities of those complicit inaccidental discovery, most fraud is now detected by management perpetrating it.review or because a manager becomes suspicious about acolleagues behavior. However, says Mahajan, collusionRohit Mahajan heads the Forensic practice and is the nationalbetween functions or with external parties means controlshead for Investigation and Anti-Bribery and Corruption servicescan be by passed which, in turn, results in an increase in in the Indian rm. With cross-industry experience, Rohitfraud.has worked on several high-prole cases involving the misappropriation of company assets and funds.Most interesting fraud investigationAn individual, in his late 20s, committed a fraud worth over$25 million. Contact Rohit Mahajan: +91 223 989 6000 rohitmahajan@kpmg.com 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.Prole of a Fraudster - KPMG | 14 18. Size of the crime Our analysis illustrates that the average identied and investigated total fraud loss in cases investigated by KPMG varies by geography. In Asia Pacic, the average loss was $1.4 million; in the Americas, $1.1 million; and in EMA, $900,000 in 2011. Further analysis reveals the following average total lossesIt is notable that the average total loss per fraud is substantial per fraud: in some high-growth and BRIC economies as well as in someestablished economies. Effective controls to prevent and detect Sub regionAverage total losses per fraud fraud in home and overseas markets are important not only to(millions of U.S. dollars)meet regulatory requirements but also to manage the substantial Asia1.5commercial losses associated with fraud and impropriety. Middle East 1.5In the context of the individual transactions that make up the North America 1.2total fraud loss, the average transaction size in EMA was typically Australia and New Zealand 1.1half that of Asia Pacic and the Americas. The lowest averagetransaction values were in India and Eastern Europe. Eastern Europe1.0 Western Europe0.9While it can be difcult and costly to recover losses, there hasbeen a signicant increase in attempts to mitigate losses between Africa0.92007 and 2011up from 50 percent to 66 percent. This is possibly South America 0.8due to increased commercial pressures to recover funds. India 0.7There is, as might be anticipated, a direct correlation betweenthe size of the crime and attempts to recover the loss. Companiesattempted to recover losses in excess of $25,000 nearly60 percent of the time, rising to more than two thirds of thetime where the loss exceeded $50,000. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.15 | KPMG - Prole of a Fraudster 19. Duration offraudFraud now takes longer to detectup from anaverage 2.9 years from inception to detectionin 2007 to 3.4 years in the 2011 analysis.In Asia, interestingly, the duration of fraud prior to detection is longeston average ve yearswith 16 percent of frauds going undetected for 10 years or more. This is possibly because employees in Asia tend not to challenge their superiors or to rock the boat as much as in Western Europe or North America, where just 3 percent of fraud goes undetected for 10 years or more. In South America, Africa and the rest of Europe, none of the frauds investigated endured for more than 10 years before detection. Fraud generally takes longer to detect in the emerged economies North America averages 4.2 years, Australia 4.3, and Western Europe 3.7compared with the high-growth economies. South America, for instance, averages 2.1 years.For organizations where fraud endures over a number of years, questions need to be asked about the effectiveness of controls at detecting and preventing fraudulent activity and about the effectiveness of management oversight and responses to red ags. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 16 20. Although organizations plan for risk, they fail to appreciate just how likely and destructive the impact of a major fraud can be. says Mark Leishman View from Asia PacicHow does the global survey reectUsing data analytics and other investigative techniques,regional ndings?KPMG identied the suspected misappropriation of more than $40 million over six years and traced approximatelyThe ndings of the surveynotably in respect of the duration and 85 percent of it concealed in accounting records.size of fraudare consistent with KPMGs experiences in AsiaPacic. KPMG member rms often nd that organizations A review of online banking privileges identied poor segregationmove into Asia Pacic with the intention of tapping into between transaction processing and approvals, false userlarger markets or potentially cheaper sources of labor, proles, and the deletion of large tranches of data. Keysays Mark Leishman, Investigation Services leader for KPMGs reconciliation processes were either nonexistent, overridden,Asia Pacic region. They do so, however, without trulyor controlled by the suspect.understanding either the increased risks of fraud or the Within a few months of detection, KPMG had assistedcorruption they might face. the client in pursuing recovery of assets connected to theTo overcome cultural and language barriers, there is, hesuspected fraud and with the police investigation.observes, a tendency to staff subsidiaries with local peopleWe assisted the client in collaborating with law enforcementrather than with trusted and experienced employees from the and their legal representative to recover a signicanthome markets. This allows for gaps in controls and means that amount of the stolen funds, says Leishman.fraud can go undetected for prolonged periods, leading to highMark Leishman joined KPMG in 2001 with 21 years experiencelosses. The recovery rate in Asia Pacic is low. Often lessin law enforcement. Today, Mark leads Investigation Services forthan 5 percent of the losses incurred in Australia and NewKPMGs Asia Pacic region from his Brisbane ofce in KPMGsZealand are retrieved, Leishman adds. Australian rm. He previously headed up KPMGs ForensicAlthough organizations plan for risk, they fail to appreciatepractices in the New Zealand and Korean rms.just how likely and destructive the impact of a major fraud Mark works across the wider Asia Pacic region, often oncan be. To protect their businesses, fraud risk managementcomplex and sensitive investigations. He advises governmentsneeds to be sound, rigorously implemented, and able toand provides investigation and fraud prevention support toanticipate and respond to the very worst case scenarios. organizations with offshore operations.Most interesting fraud investigationA tip-off from a boutique retailer, revealing that it had receivedpayments totaling several million dollars from the clientsaccounts in recent months, alerted KPMGs client to a potentialfraud. The suspect was a long-serving senior nance employee,with an excessive lifestyle.Contact Mark Leishman:+61 7 3233 9683mleishman@kpmg.com.au 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.17 | KPMG - Prole of a Fraudster 21. Raising awarenessSo how forthcoming are companies when it comes totelling others about the fraud and the penalties levied?The 2011 survey data reveals a slight decrease in the internal These gures suggest that companies may not take the opportunitydisclosure of fraud, down from half of all cases in 2007 to 46 to leverage learning points or to instill a culture of zero tolerancepercent. Full disclosure of details fell from 35 percent in 2007 toto fraud within the workplace. In many circumstances, follow-13 percent in 2011. India (88 percent of frauds not communicated)up procedures should include internal (and where appropriateand Eastern Europe (72 percent) have least propensity to revealexternal) communications to set the corporate tone on frauddetails of fraud, while the most transparent countries are South and to deter its recurrence.Africa, Australia, and New Zealand. In 2011, they disclosed details Companies tend not to make details of fraud publicly available,in all but 36 percent of cases. unless required by law, and/or when the loss is material to previously reported nancial results. In the 2011 analysis, 77 percent of investigations did not reach the public domain.Were details of the fraud communicated internally? 2007 SurveyWere details of the fraud communicated externally? 2011 Survey No, details were 50% not communicated Yes, detailed announcementsinternally 54%were made10% Yes, very limited15% Yes, very limited announcements33% announcements were madewere made 13%No, details were not Yes, detailed35% communicated externallyannouncementswere made 13% 77% 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.Prole of a Fraudster - KPMG | 18 22. However, reporting can be used to send a clear message to South America potential perpetrators that fraud will not be tolerated and increases The likelihood of enforcement or disciplinary action in South America the likelihood of recovery in the event of successful prosecution. Of was almost half that in North America (36 percent for each). course, where the nancial loss is less signicant than the potential Asia damage to the corporate reputation, companies may choose not Enforcement action was taken in 40 percent of cases. The region to report their suspicions to the police and will conduct their own had the highest incidences of resignation/voluntary retirement internal investigations. 28 percentthan anywhere else in the world. Outcomes and responsesAfrica The outcomes of/responses to incidents of fraud as a result Enforcement action (including police and legal action) was taken of the analyzed KPMG investigations are as follows:*in 65 percent of cases, with disciplinary action also high at 51 percent. Disciplinary action taken in 40 percent of cases (54 percent Eastern Europein the Americas, compared with 23 percent in Asia Pacic); Disciplinary action is the most common recourse of fraud in Eastern Enforcement action (includes regulatory, legal and police) Europe. This was taken in 33 percent of cases and resignation/ in 45 percent of cases (the lowest instances were in EMA voluntary retirement in 24 percent. However, enforcement actionat 40 percent);was taken in just 17 percent of cases and civil recovery in 2 percent, Civil recovery 23 percent of cases;reecting unique legal, regulatory, and cultural frameworks in these Resignation/voluntary retirement 17 percent of cases jurisdictions.(25 percent in Asia Pacic); India Settled out of court 6 percent of cases; Enforcement action was taken in one-quarter of cases. Similarly, Took no action or sanction 3 percent of cases disciplinary action occurred in 25 percent of cases and resignation/(all but one was in EMA). voluntary retirement in 19 percent. By geography, the survey reveals the most frequent outcomes:Middle East Enforcement action was taken in 57 percent of cases, civil recovery North America in 43 percent, and disciplinary action in 29 percent. Enforcement action was taken in 63 percent of cases, disciplinary In this region, resignation/voluntary retirement was not taken action in 66 percent of cases and civil recovery in 37 percent of in any of the cases investigated. cases. This pattern reects the strong regulatory and enforcement Western Europe framework in North America. In 42 percent of cases, enforcement was taken. Disciplinary * Percentages add up to more than 100 percent due to multiple outcomes/entity action was taken in 41 percent, civil recovery in 26 percent, responses in many cases.and resignation/voluntary retirement in 13 percent of cases. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.19 | KPMG - Prole of a Fraudster 23. Even in a well-regulatedmarket and with a goodaudit function, massive frauds can go undetected fora number of years. says Dan FriedmanView fromSouth AfricaHow does the global survey reect When funding pressures hit one company, the assets of theregional ndings? other were used to secure borrowings by short-selling sharesto the market. However, the prevailing bull market put increasedThe prole in South Africa is largely consistent with thepressure on the company resources used to secure these long-ndings of the global survey. However, unique conditionsdated structures. Over time, the directors and ofcers of thealso prevail, says KPMG Forensic Partner Dan Friedman. company disposed of all of the assets of one company to satisfyWhat can be described as economic hijacking is becomingthe funding needs of the other. Some directors also benettedincreasingly prevalent and impedes investor condence. from the disposals.It manifests in three distinct ways:These transactions led to a ve-year investigation of claimsagainst third parties, directors, and company ofcers. ItCompany hijackinginvolved analysis of accounting practices, criminal conduct, andCompany details, including the names and details of ofcers regulatory abuses. The investigation revealed signicant skilland directors of the company, are changed without authority.and cynicism in simulating transactions and nancial structuresThis enables fraudsters to obtain, for instance, bank loans into disguise the existence and disposition of the dispossessedthe companys name. They then channel the proceeds toassets in the companies nancial statements. The requirementsthemselves via an impaired loan account. Unpaid debts can of the stock exchange and the audit functions own proceduresaccumulate, leaving the bank with an impaired loan andmeant that the issues were eventually made public. By thisthe company in debt and unable to obtain working capital,time, however, signicant assets were lost irretrievably.explains Friedman.Even in a well-regulated market and with a good auditWholesale dispossession of company assets function, massive frauds can go undetected for a numberFraudsters materially or completely strip companies of theirof years, says Dan Friedman. By instigating detailedassets and/or their means to generate income. These rare butinvestigations before committing funds, stakeholders canhighly damaging instances leave creditors and shareholders with be protected from signicant loss. Investigations can belittle prospect of recovering their losses. proactive in purpose, by articulating evidence of activitiesHijacking of state-allocated rights and positions that may lead to future loss. This is in additionto the more traditional purpose of redress normallyIn some industries, notably resources, the South Africanassociated with reactive investigations.government allocates rights to companies to engage in certainactivities. It may take several years of ongoing capital injectionDan Friedman is the partner responsible for Investigations,before economic return is achieved. However, security ofCorporate Intelligence and Asset Preservation approaches intenure is at risk. More and more allegations are surfacing aboutKPMGs South African rm. His experience crosses severalfraudulent applications and exploitation of relationships, whichindustry sectors and geographies. He formerly prosecuted fraudsee rights diverted elsewhere.and other commercial crime charges on behalf of the state inSouth Africas regional and high courts.Most interesting fraud investigationKPMG Forensic was appointed to investigate the largestcorporate fraud in South Africas history. The case concerned Contact Dan Friedman:two mining companies, both largely controlled by the same+27 (11) 647 8033directors and ofcers. Some directors were also signicantstakeholders in each. dean.friedman@kpmg.co.za 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.Prole of a Fraudster - KPMG | 20 24. Fraud is up; defenses are down Our analysis indicates that fraud and misstatement of results continue to be growing problems for companies at a time when budgets are stretched. Defenses, however, seem to be less effective than they used to be. In summary, the general characteristics of the fraudster appear toWith increased economic pressures on individuals, failure to be changing only moderately. We see the middle-aged member of identify or address red ags and the lengthening time lapse middle to senior management still being the subject of many of ourbetween fraud inception and detection, the likelihood is that fraud investigations. There is a slight trend toward the individual frauds, currently undetected, will emerge in greater numbers being more tenured at the company. More interesting is how thein the next two to three years. failure to initially respond to red ags and lapses in internal controls For companies, the challenge is how to see through the ordinary were an increasing contributor to enabling the fraud to occur. Also, disguise of the fraudster; how to close gaps in the corporate the impact of the economic crisis seemed to have resulted in an armor; how to enhance fraud prevention and detection efforts; and increasing number of companies seeking to recover their fraud how to respond more often, more appropriately, and more rapidly losses, in hopes of minimizing the nancial consequences to to red ags. the organization. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.21 | KPMG - Prole of a Fraudster 25. Red ags not to be missedYour average fraudster, based on our analysis, is someone who has worked inan organization for many years, is considered trustworthy, and has a more seniorposition. But which key areas of your business may be most susceptible to fraud?And what behaviors among employees should not be ignored?Here are just some of the red ags to look out for: Does this describe an area of your business? YesNoYes No There are difcult relationships and a possible lack of trust between There are multiple banking arrangements rather than one clear providera the business and the internal/external auditor. possible attempt to reduce transparency over the business nances. Excessive secrecy about a function, its operations, and its nancialA division or department of the business is perceived as complex or results. When questions are asked, answers and supporting unusually protable, thereby diverts the attention of management and the information are often stalled or withheld.audit functions. Some practices within a function do not appear straight-forward, andWhere matters of nancial judgment/accounting treatment are involved, may even be illegal or unethical. the business consistently pushes the limits/boundaries. There is excessive pressure on employees to tamper with results to meet High staff turnover within a function. Employees may be more likely to analysts high expectations for the business. commit fraud in a business with low morale and inconsistent oversight. Elsewhere in the industry, companies are struggling and sales and/orComplex/unusual payment methods, agreements between the business and prots are declining. Your business appears to buck the trend.certain suppliers/customers, may be set up in a deliberately opaque mannerto hide their true nature. Increases in protability fail to lead to increased cash ows.A remote operation not effectively monitored by the head ofce. Senior managers receive large bonuses linked to meeting targets.As we have seen, there are certain characteristics that typify a fraudster. Employee awareness of other behaviors can help businessesidentify frauds earlier. Be alert to the following employee behavioral red ags: Do you work with someone who displays theseYes No YesNo behaviors? Refuses or does not seek promotion and gives no reasonableVolatile and melodramatic, arrogant, confrontational, threatening, or explanation.aggressive when challenged. Rarely takes holidays.Is suspected to have over-extended personal nances. Does not or will not produce records/information voluntarily or onThe level of performance or skill demonstrated by new employees does not request.reect past experience detailed on CVs. Unreliable and prone to mistakes and poor performance.Cuts corners and/or bends rules. Tends to shift blame and responsibility for errors. Seems unhappy at work and is poorly motivated. Surrounded by favorites or people who do not challenge them.Accepts hospitality that is excessive or contrary to corporate rules. Persistent rumors/indications of personal bad habits/addictions/vices.Seems stressed and under pressure. Bullies or intimidates colleagues.Has opportunities to manipulate personal pay and reward. Vendors/suppliers will only deal with this individual.Self-interested and concerned with own agenda. Lifestyle seems excessive for income. Micromanages some employees; keeps others at arms length. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.Prole of a Fraudster - KPMG | 22 26. Further guidance on how to keep your business safe KPMGs analysis of the fraudster is just part of our rms forensic support for companies and public-sector entities. We can help you to build effective anti-fraud programs and implement fraud prevention and detection strategies, as well as respond to instances of fraud and misconduct. Three further KPMG publications explore how to deal with FRAUD RISK MANAGEMENT: DEVELOPING A STRATEGY the threat of fraud in your organization.FOR PREVENTION, DETECTION, AND RESPONSEThis white paper provides an overview of fraud risk management MANAGING THE RISK OF FRAUD AND MISCONDUCT:fundamentals, identies key regulatory mandates from around MEETING THE CHALLENGES OF A GLOBAL, REGULATED,the world, and puts the spotlight on practices that organizations AND DIGITAL ENVIRONMENT (published by McGraw-Hill)generally nd to be effective. This book, co-authored by KPMG partners Richard H. Girgenti and Timothy P Hedley, with the collaboration of many Forensic .As you consider the risks of fraud at home and abroad, and the partners and professionals, is designed to help organizationseffectiveness of the controls you rely on to mitigate those risks, navigate the risks of fraud and misconduct that can jeopardize this document provides relevant insight. their bottom lines and business reputations.To view the document online, go to: Published by McGraw-Hill in March 2011, the book is a guide tohttp://www.kpmg.com/CN/en/IssuesAndInsights/ help business leaders set their organizations on the right path,ArticlesPublications/Documents/Fraud-Risk whether evaluating a global acquisition in an atmosphere ofManagement-O-200610.pdf increased multinational enforcement of anti-corruption laws or simply trying to implement an anti-fraud programCROSS-BORDER INVESTIGATIONS: EFFECTIVELY MEETING throughout the enterprise. THE CHALLENGEThis white paper shares the ndings of a KPMG International The book also discusses strategies to help organizations tacklesurvey completed in conjunction with research rm Penn, Schoen challenges that range from the nancial reporting fraud scandalsand Berland Associates, Inc. of a decade ago, to the implications of the more recent massive Madoff and Stanford Ponzi schemes, or the investigations ofThe survey considers the principal challenges faced by multinational insider trading in the hedge fund industry. While trying to keep businesses in diverse industries around the world in responding one eye on fast-paced economic and regulatory changes, businessto cross-border investigations, and summarizes the opinions of leaders should also be attentive to risks of fraud and misconductsenior executives interviewed as part of the survey. The paper also that can jeopardize their success. provides insights into possible responses to those challenges. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International. KPMG International provides no client services. All rights reserved.23 | KPMG - Prole of a Fraudster 27. We use those insights to consider how companies can derivebest value for their current or pending investment in cross-border investigations, regardless of whether those areconducted in-house or undertaken with a third party.To view the document online, go to:http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/Cross-Border%20Investigations.pdfAt the back of this document, nd the contact details of anumber of KPMG Forensic leaders in some of our accreditedpractices across the globe who can guide you in your ownanti-fraud activities. 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved. Prole of a Fraudster - KPMG | 24 28. ContactsRichard GirgentiAmericas Forensic Service Line LeaderT: +1 212 872 6953E: rgirgenti@kpmg.comPhillip D. OstwaltAmericas Investigations Network LeaderT: +1 404 222 3327E: postwalt@kpmg.com AcknowledgementsIan Colebourne KPMGs contributors to this publication include:EMA Forensic Service Line Leader Dana G McFerran, Will Hanley III, Jackie Gillson, James DT: +7 495 937 2524 ext:12203 McAuley, John Ederer, Owen Hawkes, Gerrie Lenting, BarbaraE: iancolebourne@kpmg.ru Legg, David Watterson, Kerstin Drossard, Jane Honeyford and Paul Milman.Richard PowellEMA Investigations Network LeaderWe would also like to thank all the individuals whoT: +44 161 246 4044contributed to the analysis.E: richardfa.powell@kpmg.co.ukGrant JamiesonAsPac Forensic Service Line LeaderT: +85 22 140 2804E: grant.jamieson@kpmg.comMark LeishmanAsPac Investigations Network LeaderT: +61 7 3233 9683E: mleishman@kpmg.com.auwww.kpmg.com RR Donnelley I RRD-253904 I June 2011 2011 KPMG International Cooperative (KPMG International), a Swiss entity. Member rms of the KPMG network of independent rms are afliated with KPMG International.KPMG International provides no client services. All rights reserved.