Tag: Employee Fraud

Fraud Update: Online Sales and Marketplaces

Many criminals continue to turn to the internet to unload stolen goods. Some sites require more information than a thief is willing to part with, which then leads them to other sites that have less security. Because of the anonymity some sites offer, it is important to search for the type of goods being offered on the site. User name searches are not always fruitful. Searching for items may back you in, if you will, to the criminal’s information.

Equally important is the rise of employee fraud. We wrote about this earlier this year. In Employee Fraud in the Digital Age, we discussed a case study. We once worked on a scan for an Investigator whose subject was suspected of selling a very unique set of stolen auto parts. The employee had created an eBay account and made the mistake of using a familiar user name. After the user name was revealed in our Deep Web Scan, we turned our attention to the online websites that sell goods to consumers. We were able to piece this information to that of our client’s subject. A huge catalog of stolen auto parts were on display.

Online Sales

According to Web Retailer, “47% of ecommerce sales were made through online marketplaces in 2020, amounting to nearly two trillion dollars. They also list 155 marketplaces that have more than one million visits per month, internationally.

How did this explosion in online selling happen? Over time it evolved, of course, but within the last couple of years, more and more people rely on it due to the Pandemic. Each online platform works differently, making it very difficult to find the scammers. Let’s take a look at a few of the top marketplaces to start.

Facebook Marketplace

Facebook noticed that its users were buying and selling things in groups across the platform. In 2016, it created a dedicated hub where people could post items for sale in order to reach interested buyers. They created what is now known as Facebook Marketplace, and they grew it to 1 Billion users.

The volume alone dictates that it will be a breading ground for fraud and scammers. Facebook is well aware of the issues they have and have publicly stated that they use software as well as outsourced people to review listings flagged by the software and to answer user complaints.

Most recently, you can find fake COVID vaccine cards for sale. However, for the most part you can find just about anything here.

Amazon Online Sales

It is a little more difficult to sell on Amazon. You can either sell your products to Amazon or on Amazon.

As a consumer, it is important to pay attention to who is selling an item. For example I recently purchased a specific style of shoes. I didn’t think much about it and when it was delivered it was an obvious counterfeit. It even had a very strong chemical smell. It was obvious I was a victim of a seller of counterfeit goods.

The Washington Post recently had a great article titled, “How to tell real products from scams when shopping online.” They actually listed out some good OSINT research tips, such as doing a reverse image search on the item you are looking at. It is also smart to research the company name.

eBay Online Sales

When it comes to online sales fraud, you most likely think eBay. eBay has been around since 1995 and it is no stranger to these issues. While there are many other marketplaces, It is still a gigantic places to sell all kinds of used and new products. When conducting research on a person or company allegedly selling stolen goods online, it is still the best place to start.

A couple of OSINT tips when searching eBay:

  1. Search the site for every known user name. You may even want to mix it up a bit by mixing user name letters and numbers. For example, consider the following fictitious user names; @windycity146, @tom.day, @daytom – I would search each of these but then combine to create new ones that the user may be using on eBay. Such as @tom146, @day146, etc..
  2. Search the site by utilizing the “Advanced” button, which will display new options for searches. Toggle to “show results” and then “items near me”. From here you can plug in a zip code up to 10 miles or more. This is an excellent way to search if you do not know the user name of your suspect.

Employee Fraud in the Digital Age

In today’s digital world, employee fraud and theft is up and can cost a company a lot of lost revenue. This is an area in which a Private Investigator can be be very valuable to a loss prevention department.

A recent article in the The Atlanta Journal-Constitution reported two employee fraud investigations.

“Home Depot just caught an employee who stole over 100K in electronic gift cards. “Said accused did, between January and November 2018, use his position as a Home Depot employee to send E-Gift cards to email accounts that he set up himself, or were provided to him from a third party, in the amount of $156,330 U.S. dollars,” the arrest warrant states.”

“A teenager was arrested after he was accused of stealing nearly $1 million from the Kroger store where he worked. According to police, 19-year-old Tre Brown created more than 40 returns for non-existent items in December and January, including lottery tickets that were never sold, spokesman Cpl. Collin Flynn said. Those returns, which ranged in price from $75 to more than $87,000, were then placed on several credit cards, investigators said.”

Benefits Pro, an employee benefit firm, recently published an article on the warning signs.

Employee Fraud Red Flags:

• An employee living beyond their means
• An unwillingness to share duties
• Being under pressure on the job
• Family problems or divorce
• Defensiveness
• Past legal problems
• Refusal to take vacations

According to Certified Fraud Examiners, a typical company can lose up to 5% annually to employee fraud. In fact, the Association of Certified Fraud Examiners conducted a study in 2018 titled, “Report to the Nations: 2018 Global Study on Occupational Fraud and Abuse.” The study included 2,690 known cases. Many do not get reported due to the stigma and bad public relations to the company itself.

The study goes on to reveal some other commonalities.

  1. The overall amount of loss by men is 75 percent larger than those caused by women.
  2. The most common way employee frauds are discovered is via tips.
  3. Internal control weakness is responsible for nearly half of frauds.
  4. Employees committing fraud who have been with their companies longer stole twice as much.
  5. Small businesses lost almost twice as much to fraud per scheme as larger ones.

Deep Web Research

If the investigator is looking for stolen merchandise, then the web is one of the best places to begin. Conducting a deep web search on a person of interest can provide a starting point. Details may emerge that will provide various emails, phone numbers and user names. Connecting the person with online social media groups, market places, Craigs List, and more may provide you an exact place where the stolen merchandise is being sold.

Auto Parts for Sale

We once worked on a scan for an Investigator whose subject was suspected of selling a very unique set of stolen auto parts. The employee had created an eBay account and made the mistake of using a familiar user name. After the user name was revealed in our Deep Web Scan, we turned our attention to the online websites that sell goods to consumers. We were able to piece this information to that of our client’s subject. A huge catalog of stolen auto parts were on display!

The internet has certainly helped employee fraud. With more avenues to sell stolen merchandise, it can be just the right kind of lure an employee needs to do the unthinkable.

Outdated POS systems, computer programs and data storage entry gaps can be additional areas of concern for many retailers. Being proactive is always your best approach to take away the temptation. Smaller businesses may not have the money for a loss prevention department. That is where a Private Investigator can be a valuable asset to your business, specifically one who deals in computer forensics.

Employee Ethics & Fraud During COVID-19

Back in April we wrote about fraud predictions during the COVID 19 pandemic. Back then most of what was out there was PPE (Personal Protective Equipment) fraud. We saw a lot of fakes and it even began to show up in COVID testing. Much of this was controlled by the FDA who provided consumers with updated information on their website on a regular basis.

Once the government released stimulus checks, the scams began. Scammers were contacting people through email, telling them that their check, as part of the stimulus package responding to COVID-19, is already waiting for them and that all they need to do is to provide personal information. This included bank account numbers and Social Security Numbers, which are the key pieces of information needed to perpetrate identity theft.

 Bruce Dorris, J.D, CFE, CPA, President and CEO of the Association of Certified Fraud Examiners, explains that in the current conditions, we can expect to see a number of long-lasting implications. One important one being an explosion of fraud in the coming years — and organizations need to brace themselves.

Corporate Employee Misconduct

Some of our corporate associates have expressed concern with what lies ahead as they navigate the uncertain waters of the Pandemic. One company in particular needed to shut down an entire plant because an employee tested positive for COVID. The employee presented the company with a falsified COVID 19 medical claim. He went as far to provide an excuse letter from a medical facility appearing to corroborate the test results. In concern for its employees and customers, the company closed its facility for cleaning and paid its employees during the shutdown. This caused a loss in excess of $100,000 to the corporation and the unnecessary quarantine of several of the defendant’s coworkers. He is now released on $15,000.00 bail awaiting trial.

FBI Recommendations

The FBI has recommended that companies be particularly alert during the pandemic about possible fraudulent work excuse letters, as they are finding more people attempting to exploit the situation for personal or financial gain.  Submission of a medical claim proven to be false could lead to criminal penalties, including fines or imprisonment by U.S. federal and other authorities.

What This Will Mean for the Private Investigator

Investigation around employee misconduct is an area that could prove to be quite lucrative for investigators. ABC News in Phoenix, AZ did a story on how local investigators are getting calls from corporations to check up on employees who should be working from home. This is not an isolated incident.

I believe we will see more and more fraud cases such as this over the next year if not longer.