ACC 556 WEEK 4 Crooked, Scenario 4
ACC 556 WEEK 4 Crooked, Scenario 4
Crooked, Scenario 4
LEARNING TEAM ASSIGNMENT
After the second day of intense training with Joseph, Sterling and Glenda Berkeley, you were sitting in your office preparing the final exam for this fine group, which would be administered the next day. The finishing touches of the final were just being completed when you noticed a suspicious package outside your door. Thinking it might contain a CrookEd bomb, you called security, who easily assessed there was no bomb. Relieved, you opened the package.
In the package you found a lengthy letter, perhaps a confession, from a current CrookEd employee who wanted to remain anonymous. The letter contained all kinds of allegations. As you read through the letter, you had an idea. You decided to take a number of the allegations and put them in a table for the final exam you would be administering the next day. These kinds of frauds could be found in the text for the class you were teaching: Fraud Examination, 5th Edition Chapters 14 and 15and from Executive Roadmap to Fraud Prevention and Internal Control: Creating a Culture of Compliance, 2nd Edition, Chapter 7 and 9.
You decided on a match the fraud scenario with the fraud category approach. The table you created is provided below, and interestingly corresponds to this week’s assignment.
Match the fraud scenarios provided in the table below with the fraud type(s) listed with the table. Do this as a team.
Submit the below table within a Word document. Grading: 5 pts.
- Bribery—undisclosed payment before or to influence the act (kickbacks, under-the-table payments).
- Illegal gratuities—unlisclosed payment after to reward an act (trips, gifts, perks).
- Larceny—stealing after the money is recorded; on the books.
- Skimming—stealing before the money is recorded; off the books (taking cash off the top, unrecorded sales)
- Fraudulent Disbursement—unauthorized payment, on the books (paying for personal items).
- Check tampering—altering a checks, forgery, false endorsement
- Foreign Corrupt Practices Act (FCPA)—bribery of a foreign official
- Conflict of interest—undisclosed personal economic interest.
- Economic Extortion—demand for money; taking thru coercion/fear (shake-down, freeze-out)
- Shell company—company exists only on paper.
|Fraud Scenario||Fraud Type(only one per scenario)|
|1.||A VP of Construction at CrookEd created six bogus construction companies and submitted bids through them for the pipeline, all significantly higher than CrookEd’s bid|
|2.||An intern with CrookEd was sent to an office supply store to pick up some binders. He phoned his wife on the way and asked her if she needed anything. She said binders. So, the intern got 10 instead of five binders and took five home. He submitted his receipt for the 10 binders. No one bothered to check how many binders were placed in the supply room|
|3.||A CrookEd Office Manager paid the phone bill for all employee mobile phones and figured out one day that she could add her boyfriend to the plan without anyone noticing. The boyfriend did not work for CrookEd.|
|4.||Mack offered a state official an all-expense paid moose hunting trip to Saskatchewan simply because Mack’s and the official’s sons played on the same junior hockey team. Mack used company funds for this figuring the official may be able to help CrookEd in the future|
|5.||When Mack went on the moose hunting trip with the North Dakota official, he met a Royal Canadian Mounted Police (RCMP) during the hunt. The RCMP was in charge of finding a company to build a new ranger station. Mack paid the RCMP $25,000 Canadian dollars from CrookEd funds to let CrookEd build the ranger station|
|6.||Stagger Lee had a college friend, Turk Woodhead, who owned a lumber company who was the sole supplier of lumber to all of CrookEd’s jobs. Stagger had a 30% interest in Turk’s company. He never told anyone at CrookEd about his investment in the other company|
|7.||CrookEd had a small lumber yard and hardware store that sold lumber and other construction supplies to local, but usually connected, construction companies. CrookEd charged exorbitant fees for its products to these companies. The other companies did not complain too much because they knew if they did not buy their material from CrookEd they would be “locked out” of being sub-contractors with CrookEd on any job|
|8.||The Office Manager collected all the sales from the lumber yard/hardware store and insisted on “cash only.” Periodically, she would keep a few hundred dollars of these sales and throw office parties with these proceeds. She made the cash deposits and reconciled the bank statements and was thus able to keep these parties “off the books” or could “fudge” the amount to make everything balance|