Business has never been better in the world of fraud, flim-flam and chicanery. The Internet and mobile technology are helping see to that.
For white-collar cheats, that might be cause for a celebration of their sector’s technical enterprise and ingenuity; for honesty and integrity in business and elsewhere, it should be cause for alarm because there are more than fundamental business issues at stake here.
The Association of Certified Fraud Examiners’ (ACFE) 2016 global fraud study chronicles the inventiveness of white-collar criminals and the steady encroachment of corruption into business sectors around the world.
Among its findings: the losses caused by the 2,400 cases of white-collar crime in 114 countries covered in the report totalled more than US$6.3 billion; average loss per case clocked in at around US$2.7 million; median loss for Canadian companies was US$154,000 compared with US$120,000 for their U.S. counterparts.
The report noted that two-thirds of the cases reported to ACFE targeted privately held or publicly owned companies. Hardest hit sectors included banking and financial services, government and public administration and manufacturing.
Corruption, which includes bribes and other economic extortion, was atop the fraud scheme list in most regions, especially southern Asia and the Middle East.
It has yet to reach No. 1 in Canada.
However, it is No. 2 with a bullet, and, as pointed out in the Financial Action Task Force’s September anti-money laundering and anti-terrorist report, Canada, with its “open and stable economy and accessible financial system … [is] vulnerable to significant foreign ML [money-laundering] threats.”
But fraud is about more than money. If allowed to flourish, the same culture of corruption that is so corrosive to business integrity and public trust inevitably infects all sectors and social mores to the point that kickbacks, payola and schmiergeld become the price of doing business.
The cost of that to Canada and honest Canadians is measured in far more than dollars and cents.