Who is to blame for falling victim to Corporate Fraud?

“Hey son, accompany to the Western Union, I have to make a deposit to claim some money I won.”

Those words of fraud still echo in my mind, as I remember my mother being the victim of a stereotypical telephone fraud. So convinced was my mother of the man on the phone, she immediately e-transferred $500, believing she had invested in a company that would double her investment, only to be disappointed to know later that it was a pyramid scheme.

The Theory X population, characterized as exhibiting dominant traits of laziness and diminished intelligence have been struggling with fraud. They are the segment of the population that have been targeted to fall victim to fraud easiest. These acts of oppression against the Theory X population have decreased in size, and with the technological advancements of the 21st century, even the Theory X can see that you are never one click away from winning a million dollars! However, with the increased intelligence of the species, the fraudulent also have to evolve in creating innovative techniques to scam people. And They Have.




The Federal Trade Commission issued a warning to all business of a potential scam. The scam was described as a threat to employers, and the average loss reported was of $55,000, but some losses have exceeded that number to an excess of $800,000. This fraudulent scheme is referred to as “masquerading”. A hacker assumes the position of a senior executive and orders an employee to complete a financial transaction. Employees jump at the chance to get a competitive advantage in the work place, and don’t question their boss’s motives. Consequentially, the lowly explanation of the financial transaction being relevant to a “confidential” business investment or payment to a vendor suffices with the Theory X employee. Once the money is wired to this very “confidential” investment account, it is almost impossible to recover. The fraudulent scheme goes virtually undetected, unless the company’s fraud department raises an alarm or company executive’s talk to each other about the “transfer”.

What is worse, is that there are no preemptive measures available that would ensure the prevention of the fraud. Hackers are always scheming, and tend to take many different approaches. Some pose as the CFO, or CEO of the company on the phone, and intimidate employees into making the transfer. Some masquerade as an existing client sending an email to “update” their account information, -a lowly employee would definitely not dispute a client request-.

It is appalling to think that industry professionals, working with companies who can afford to lose $55,000 are falling victim to this fraud. Should CEO’s and COO’s of a company attempt to take preemptive measures to mitigate this fraud? Or should they start employing individuals who are able to see it coming? Does the problem lie with the certain individual, or the employer of the Theory X individual? These are all questions to be mulled over by the company’s senior executives. And they will be pondering the $800,000 loss whilst they suffer from not receiving their yearly bonus cheques.


Writer: Ammar Akbani

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