Aussie employers had $350 million stolen from them by employees in the last decade: Research
The research found the largest amount stolen by an employee was $27.4 million, with six cases involving at least $10 million being misappropriated.
Australian employers lost $350 million in 102 cases of employee fraud during the past decade, according to new research released by forensic accounting and corporate investigations firm Warfield & Associates.
The study, which covers the period August 2012 to August 2022, found the largest amount stolen by an employee was $27.4 million, with six cases involving at least $10 million being misappropriated.
The sectors hit the hardest were banking and financial services. In fact, of the employees who committed fraud against organisations other than banks, 43 were employed in the finance function.
False invoicing and electronic funds transfer fraud were the most prevalent ways in which frauds were perpetrated.
The study found the longest time frame a fraud was committed was 17 years, with 52 of the frauds analysed taking more than five years to be discovered.
Lifestyle improvement was the leading motivating factor in 44 cases, with gambling addiction the main motivating factor in 39 of the cases and a contributing factor in four more.
To be included in the research, cases needed to involve an employee committing an act of fraud involving at least $1 million dollars and the perpetrator being convicted in an Australian court of law.
The research confirmed the cases of employee fraud “devastated businesses, placed enormous stress on fellow employees, ruined relationships, lost everything and, in almost all cases, ended up in jail”.
Warfield & Associate Principal Brett Warfield says the impact of many of these frauds was significant.
“Some businesses did not survive, small business owners suffered emotional stress and health problems and many employees lost their jobs,” Warfield said.
“The length of time that many of the frauds lasted was very concerning. Fraud can occur at any organisation. However, if the fraud is not being identified relatively quickly, then the organisation should ask why? Where were the failures in governance, audit and the whistleblowing protocols that allowed the fraud to occur?”
According to the study, the stolen funds were spent on “exotic cars, escorts, houses, cosmetic surgery, overseas travel, buying businesses, racehorses, star wars memorabilia, strip clubs, jewellery and even several special interest military vehicles”.
This is the seventh major research study into Australian fraud released by Warfield & Associates since 2008.
The research for this study involved an extensive review of online law judgments, as well as Australian newspaper articles containing court reports that provided details of judgments.
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