The best way Australians stealing from their businesses were caught has been revealed in a new report into workplace fraud – and it’s when they’re not at work.
A new report by forensic accountants Warfield & Associates into 102 cases of multimillion-dollar fraud by Australian employers of staff found $350 million was stolen between 2012 and 2022.
But it is believed that when amounts under $1 million are counted, the true number will easily be that much each year.
The best way Australians stealing from their businesses were caught has been revealed in a new workplace fraud report – when they’re not at work
Employees who committed fraud to improve their lifestyles had lavish spending patterns beyond their unsuspecting colleagues’ wildest dreams
The two main reasons people stole were to improve their own lifestyle or to gamble, said the report, which was based on Australian court records where criminal convictions resulted.
Those who committed fraud to improve their lifestyles paid for a dizzying array of luxury goods and travel.
They bought jewelery and designer clothes and paid for cosmetic surgery, lavish holidays, houses, sports cars and in one case two ‘special military’ vehicles.
Many also bought drugs, paid for escorts and wasted at strip clubs.
They bought jewelry and designer clothes and paid for cosmetic surgery, lavish vacations, houses, sports cars
An Australian fraudster who stole from their employer spent $400,000 on jewellery
Corporate investigator Brett Warfield told Daily Mail Australia that the most common way criminals are caught is when they go on holiday or leave a business.
‘Overwhelmingly, when they leave the organization for a holiday or leave for good, someone comes in and does their job.
‘That’s why some people don’t take holidays, because if they’re away from their jobs, someone else gets their emails and phone calls and they see things like unusual purchase orders.’
One man who spent $65,000 on vacations preferred to stay closer to home, dropping $134,073 on strip clubs and $41,875 on ‘luxury goods’
An Australian man spent $300,000 on 26 designer watches after defrauding his employer
The payroll assistant who bought a Pie Face store
A woman who was a salaried employee of a packaging company used the $4.142 million she stole on 220 occasions from her employer to buy a Pie Face franchise.
She also invested in properties, payments to relatives and entertaining friends and relatives at social and sporting events.
Her sentence was six years and four months in prison with a non-parole period of four years.
Sir. Warfield said over 30 years of investigating workplace fraud had shown him that the criminals in an organization are not always the people you would expect.
‘What we hear over and over again is ‘we would never have suspected them’, so it’s really the quiet ones you need to look at.’
To gather the data, Warfield & Associates reviewed lawsuits between 2012 and 2022 and found 102 cases totaling $349,996,063.
Of the 102 cases, 52 took more than five years to detect.
Most had lavish spending patterns beyond the wildest dreams of their unsuspecting colleagues.
One spent $400,000 on jewelry and $220,000 on designer clothes, while another dropped $280,000 on two Porsches and gave one to his girlfriend before spending $300,000 on 26 designer watches.
Another bought an Aston Martin car and, bizarrely, a dollhouse worth $10,000.
A woman drew attention to herself when she bought three ‘military vehicles’ for her husband.
The two main reasons people stole were to improve their own lifestyle or to gamble, said the report, which was based on Australian court records where criminal convictions resulted
A woman drew attention to herself when she bought three ‘military vehicles’ for her husband
Construction company manager’s $21 million fraud
In one of the biggest cases, a finance manager at a construction company stole $20.7 million by using 300 fake invoices over 12 years.
He spent his stolen millions on expensive thoroughbred horses, at least six properties and on his lover.
He was sentenced to 15 years in prison, with a non-parole period of five years.
A man bought expensive properties in his own name and his wife’s name and bought shares in 111 horses for a total of $7 million.
Travel was predictably popular with fraudsters, with one person taking $367,000 worth of holidays over eight years and another spending $250,000 on travel and accommodation.
In another case, a woman bought a car, holidays to Fiji and Queensland, jewellery, and funded her then-boyfriend’s failed career as a rap musician before paying for undisclosed legal fees for him.
One man who spent $65,000 on vacations preferred to stay closer to home, dropping $134,073 on strip clubs and $41,875 on ‘luxury goods’.
One bought a cafe worth $600,000, while another ran a drag racing business.
In most cases, the fraudsters carried out their crimes on their own, although in 10 cases they had help from inside their companies, with things like false invoicing.
“Ten cases involved collaboration between the perpetrator and either another employee or external party such as a supplier or contractor,” the report said.
An Australian fraudster spent $280,000 on two Porsches and gave one to his girlfriend
A man bought expensive properties in his own name and his wife’s name and bought shares in 111 horses for a total of 7 million.
The most popular type of employer targeted was construction firms, which had 11 cases, just ahead of banks, with 10.
A total of 15 companies in the financial sector were targeted.
On average, each case averaged $3.431 million, but the largest was $27.4 million.
Of the 102 cases, only 11 had previous criminal records for similar offences, and 57 percent of the perpetrators were men.
False invoicing and wire fraud were the most common ways in which fraud was committed.
The report also showed how difficult it is to get away with fraud because of the many ways to get caught.
While they were often caught after leaving work or on vacation, more employees were caught over dodgy bills for hotels and bar tabs.
In one case, a subcontractor approached a Chief Operating Officer at a function and asked for more contract work.
The request revealed a discrepancy between the work they performed and the work records they said they were paid for.
Travel was predictably popular with Australian scammers, with one person taking $367,000 worth of holidays over eight years
In another case, a new CFO decided to dig into the staff’s past expenses.
Warfield said small and medium-sized businesses tend to be the most vulnerable to internal fraud, but not always.
“Some very large organizations have suffered millions of dollars in losses over many years and really should manage the risks much better.”