Archive for the ‘Battle on Fraud’ Category

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13
Jun/106

Embezzlement and Gambling… In Connecticut?

After speaking at a recent session following a presentation of gambling as an addiction, I started paying closer attention to this issue.  In Connecticut we have two casinos that opened about ten years ago.  While embezzlement to support a gambling problem has come up in my cases, it hasn’t been as prevalent as one would think with two casinos in the state.

What amazes me more than the gambling is the amounts that can be lost, and with the embezzlements, the amounts that can be diverted from an organization to support gambling without the organization missing the funds.

Case in point comes from an article in today’s Journal Inquirer, a local Connecticut newspaper.  “Woman gets 9 months for thefts.”

The woman in the article was convicted of embezzling $335,000 from a local school lunch program.  She was the director of dining services for the local town, and took cafeteria receipts, concealing the thefts with falsified logs.  The article also stated she lost more than $380,000 over six years gambling at the slot machines.

The real questions I have after reading this article are 1) how much funds flow through this town’s cafeteria services to have been able to loose $335,000 and not miss the funds, and 2) where were the basic level internal controls over cash receipts, collections, entries and deposits to have both prevented this from happening in the first place, and also to have detected discrepancies as soon as they started to occur?

I guess a third question would be fair as well – towns like this town undergo annual financial audits by outside accounting firms.  Given the existence of casinos in CT and the high risks of gambling and embezzlement, why wasn’t such a large theft detected as part of any year’s audit?

Just makes me wonder just how much fraud, theft and embezzlement is occurring as we speak, waiting to be detected or discovered, or more likely, waiting for accidental identification after the snowball effect has occurred.

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19
May/108

Credit card skimming… watching for new opportunities (or vulnerabilities).

I just returned from speaking at a conference in Miami.  I checked into my hotel, and as part of my debriefing from the travel, I found the in-room safe to safely store my laptop, camera and other electronic devices.

As I read the instructions it dawned on me that we used our credit and debit cards in many different contexts beyond store purchases, gas purchases, red box terminals and ATM machines.

At the airport I had to use a credit card to retrieve my boarding passes – the airlines call it “self-service” checkin.  Nothing self-service about it, we had to get in line both ways due to system issues.  I wondered what system was behind the self-service terminals that hundreds of thousands of travelers insert their credit card into every traveling day, and more importantly, what safeguards were in place to protect my card information from skimming or theft.

The safe in our room had two options – enter a private code or swipe a credit card on the reader.  The same card used to close the safe would be required to be swiped to re-open the safe.  I wondered what systems were behind the safe tracking my credit card information, and more importantly, who had access to my card information when I swiped.  I chose to enter a four digit code, as I had no way of knowing if dishonest employees could access all the cards swiped on the room’s safe.  And then I wondered how many safes were in this one hotel – hundreds.  In all the rooms in all the hotels in the US alone – thousands…

An individual attending one of my sessions in Miami asked me what I suggested for a replacement to using debit and credit cards due the high incidence of skimming.  She asked if we should switch back to cash only.  I responded that if we did that, the number of personal robberies would certainly increase.

The solution if to be prudent where you use your credit card, monitor your card’s activity, loose your debit card (and switch to a credit card), and remain vigilant.

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13
May/1011

Skimming… not the redbox terminals. What’s next?

In preparing for a presentation I am making at University of Connecticut next week, I was searching the Internet tonight for images of credit and debit card skimming.

I came across a frightening image.  It was a picture of a redbox movie rental station, focused in on the credit card swipe area.

Much to my surprise I learned the folks stealing our credit card and debit card information have been installing their card skimming devices onto redbox stations.

If you are a redbox user like myself, you need to start watching for signs to ensure that a skimming device has not been added to the redbox station you use.

Here is the URL to the redbox image to help show you what to look for:

http://4.bp.blogspot.com/_Y5Wj_eMCNq4/SFx15mMbAoI/AAAAAAAAAYU/OegMqgrtUCI/s1600/redbox.jpg

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