Former Con-Man Frank Abagnale Talks Fraud Prevention at ACFE/IIA Conference

More than 400 certified fraud examiners, internal auditors, and fraud prevention professionals gathered together for the seventh annual Fraud Conference hosted by the Association of Certified Fraud Examiners (ACFE) South Florida Chapter and The Institute of Internal Auditors (IIA) Miami Chapter and Palm Beach County Chapter.

The conference featured several guest speakers, including fraud prevention specialist, Frank Abagnale. As a notable con-man, his knowledge in the field began around 45 years ago. Abagnale may be best known for his book, Catch Me If You Can, which was later adapted into a film directed by Steven Spielberg and starring Leonardo DiCaprio.

At 26 years old, while serving prison time in the U.S., Abagnale was offered the opportunity to finish his sentence working for the federal government. He has now been associated with the FBI for more than four decades. He has worked with financial institutions, corporations and government agencies around the world to help them strengthen their defenses against fraud.

“I always knew I’d get caught,” said Abagnale. “Only a fool would think otherwise.”

At the conference, Abagnale discussed several different types of fraud-related crimes that may affect individuals and businesses, and he suggested some ways to help prevent such frauds.

The rise of white-collar crime

Since 2015, approximately $994 billion have been lost to white-collar crimes, specifically frauds against the U.S. government, Abagnale said. White-collar crime is generally considered as financially motivated nonviolent crime, usually committed by business and government professionals.

Many taxpayers may suffer the consequences of these crimes. These days, Abagnale says, it is “almost impossible to find someone who hasn’t been a victim of identity theft.” Abagnale suggested these tips to help deter identity thieves:

• Be wary of what you post on social media – your name, date of birth, and where you live is all the information a criminal needs to steal your identity.
• Safeguard your children’s personal information. Children are the most common victims of identity theft because malicious use is often not detected for years. A child’s Social Security number can be used by identity thieves to apply for government benefits, open bank and credit card accounts, apply for a loan or utility service, or rent a place to live.
• Consider making purchases on a credit card rather than a debit card so transactions are not paid directly from your bank account. If there is a fraudulent charge, the credit card company can assist you with resolving the issue. However, temporary or permanent loss of your own funds may likely have a greater impact on your life.

Education and ethics

One of the biggest challenges that companies face in preventing fraud is managing internal personnel. The median loss caused by a single case of occupational fraud is $150,000, and about 2,410 occupational fraud cases cause losses of more than $6.3 billion, according to the ACFE’s 2016 Global Fraud Study Report to the Nations on Occupational Fraud and Abuse.  Asset misappropriation, corruption and financial statement fraud are three of the most common schemes.

“Businesses have a moral obligation to keep their employees honest,” said Abagnale.

Employees can also unwittingly put the company’s security at risk, for example, by opening a phishing email or inadvertently downloading a computer virus. Having appropriate internal controls policies and procedures in place, as well as offering IT security training for employees can go a long way toward mitigating a company’s risk.

Abagnale emphasized the importance of bringing back ethics and character in the workplace and school. A culture of accountability is one of the most important fraud deterrents, he said.