Identity theft is a serious problem today costing individuals, organizations and governments

Billions of dollars in prevention, control, detection and prosecution. This paper aims to provide an introduction  to the problems that are related to  fraud  and  identity theft crimes  and provides you insight  on how to protect corporate executives of fraudulent acts against them  with a  plan of action including  implementing  measures.   Also if the chairman of a corporation asked the author to create a loss prevention education workshop for the corporate executives, explaining how to implement the procedures and the mechanisms that would be used to evaluate that the lessons being learned in the workshop are working toward loss prevention. A workshop discussion of Government strategies for managing this problem.










Many corporations have stiffened up their defenses, but unfortunately there is always going to be this problem as long as executives have access to this vital information, it is a shame that this information is either sold or traded for personal gain.  This behavior causes not only the customers to be victims to identity fraud but the employees as well are susceptible. The question is, how do you protect corporate executives of fraudulent acts against them? What methods can be used to educate corporate executives and measure their understanding toward loss prevention?  Legislation, public vigilance and awareness programs, IT protection, identity management, law enforcement and justice systems, education and training, reporting procedures, collaboration and alliances, and victim support, are all part of a srategy to manage Identity theft and crimes of such nature.   Which is helpful in the prosecution, recovery and remediation stage in both the civil and criminal arena.   (Lemos 2001, p. 2).



Identity theft is a serious crime that happens to many individuals within corporate companies. Identity theft happens when a group or individual obtains a person or individuals personal information with the intention to commit a crime. Corporate executives can become easy targets for these individuals because of the high usage of personal data and industry and social status (Clearinghouse, 2005-2008).   The ability to protect and educate corporate executives against identity theft has become critical for many companies.  The United States legislation governs identity management: Sarbanes-Oxley Act, Patriot Act (2001), and the Electronic Signatures in Global and National Commerce Act.
Corporate Executive Workshop/ How to Protect Your Business against Fraud

Employee Tips and Reporting

An often overlooked, but excellent way to prevent fraud is to develop an anonymous way for employees to report suspected fraud and work practices that lead to fraud.  Businesses that institute anonymous employee reporting detect fraud earlier and significantly limit financial losses. (Wasserman, 2012)

Internal Audits and Surprise Audits
Work processes, inventories, and accounting should be subject to regularly scheduled and announced internal audits.  In addition, unscheduled — or surprise — internal audits also should be conducted.  Work processes, inventories, and accounting can be altered in advance of regular audits, but knowing a surprise audit may occur removes temptation and increases the chance for fraud detection. (Wasserman, 2012)
External Audits
At a regular interval, external auditors should be employed to review company accounts, contracts, and inventory and work processes, (Wasserman, 2012) says.  Depending on the size of your business and whether it is a publicly-held enterprise, this may be required by law.  Thus, it makes sense to set up external audits early in the history of your business so compliance with applicable laws and regulations can be achieved as your business grows.

Create a system of awareness at the top level of management. ‘Never think that it can’t happen here, make it known that “we’re watching for it”, and if catch the company plans on prosecution both criminally and civilly.’  Civilly due to the fact that people who have profited from ill-gotten gains may not have the cash on hand to return – they may have spent the money on fancy cars or jewelry.  (Wasserman, 2012)

Hiring process and background checks. Background checks should be performed on all new  employees prior to  hiring them,  The business should have the written permission of the candidate to  conduct  a criminal background check, education, immigration status, previous employment  history and  a credit report to be run on all employees that handle cash and inventory. (Inc., 2012)

Employee lunch and breaksStagger the employee lunch breaks and break times, employees tend to bond during these times.   If employees get too friendly with each other sometimes they will work together as a team to defraud the company for their own personal gain.  It is much easier to engage in fraudulent   activities when you have other employees watching your back.  Especially if upper management is involved in the scandal.

Cash and receivables and accounting. Cash and receivables handling policy needs to be addressed in writing with a clearly stated corporate goal.  This policy will train the executives to look for inconsistencies, i.e., counterfeit money, fraudulent checks and credit transactions that are unauthorized.    If a shortage in the cash drawer occurs, the executive is aware of the legal ramifications that lie ahead, the executive will be prosecuted to the full extent of the law, as stated in the policy as well as an audit both internally and externally which may ultimately lead to their departure from the company.  (Inc. 2012)

Inventory handling and tracking. A written inventory policy covers sales stock and company equipment. Pilferage is often an ‘entry level’ criminal enterprise.  Constant reviews of the company assists should be performed, as well as checking that orders have been filled before paying the invoice.  Basically the more over sight the better this way the employees know that management is aware and involved in the day- to- day operations. (Inc., 2012)

Disposing of Confidential  Information   the appropriate steps need to be taken to ensure confidentiality  i.e., account numbers, employee social security numbers, corporate pass code  info etc…  After the information is used, documents need to be shredded and disposed of. This needs to be detailed in the policies handbook, and acknowledgment of confidentiality agreements and non-compete agreements for key employees.   (DOJ, 2012)

Customer returns.  Should be restricted to the store where the merchandise was purchased with no receipt.  Two forms of ID and no cash is returned without proof of payment. This return policy should clearly state the company policy and be posted at the customer service desk. Returns are a big area where fraud among the employees may occur.  (Inc., 2012)

Employee / patron injuries: Install surveillance in all areas of the business where a customer could potentially slip and fall.  Post signs warning customers of steps or uneven landscapes within and around the businesses property.  This will reduce the fraudulent accident and injury claims being brought against the company by both employees and patrons.  Implement a strict policy for reporting all injury incidents and keep a log for future tracking via incident reports.    Hire a surveillance team to watch the cameras while any person is on the premises (employee or patron) this will protect the business as well as admissible evidence of the reported injury. (DOJ, 2012)

Internet, e-mail, laptops, cell phones, and storage devices. Define the policies that pertain to email and internet access for business purposes ONLY.  No personal cell phones, lap tops, or electronic devices are permitted in the workplace PERIOD.  Leave all of the aforementioned in your car or assigned locker/ storage area.   The internet access should be restricted to correspondence that only pertains to the area of their assignment.  For example, to look up customer account information or to check stock of a product in their warehouse or one of their other stores.  Establishing guidelines that address the use of business laptops, cell phones and storage   devices will reduce the ability of confidential corporate and customer data from being lost or stolen.

Creating Checks and Balances. Internal Controls the best theft deterrents, this is a process that the company should operate at meeting their   predetermined goals.   Making reference to financial accounting and keeping in compliance with federal laws and rags.  Internal controls are vital to detect and prevent fraud.   Some companies have internal audit departments if the company is small however they are not able to afford this type of service.   They simply have accountants and upper management to keep track of their accounts.  (FBI, 2012)

Separate the departments into three departments;   1). Creating/Collecting Data,    2). Maintaining the Data   3).  Use of the data.  For example, the person responsible for collecting the information should not be the person to enter it into the database.   Require separate confirmation and storage of inventory records away from the location of the inventory and rotate the responsibility for taking inventory. Each employee will be assigned to a different task one will access the company’s internet website, while (DOJ, 2012)

Assign multiple employees to a different task, one will access the company‘s internet website, while another will check the emails and another follows up with the customer requests.


Implementing a fraud prevention plan requires planning, commitment, and also requires the management to provide training with the right tools and support to its employees.  Businesses have a better chance if they are active participant to the daily operations.  Further businesses need to design deterrents,   establish internal controls, encourage employees to have a cheerful pleasant conscientious attitude, says Bachman; the survival of the business is dependent upon its employees being honest.








Elizabeth Wasserman, (2012) Inc.’s technology website, Retrieved October 1, 2012


Birzer, Roberson, (2012), Introduction to private security, Theory meets practice. Retrieved October 5, 2012, AIU Online library.
The FBI’s List of Common Fraud Schemes:, (2012)
Understanding and Detecting Fraud by the Department of Justice, (2012) http://www.usdoj.gov/usao/eousa/ole/video_info/ubf_part1.pdf
Lemos, R., (June 2001), “International cybercrime treaty finalized” CNET News.com,): 1-3. (Retrieved October 5, 2012 http://www.news.com/2100-1001-268894.html).

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