Fraud Investigation Resources
Fraud Schemes and Related Terms
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White-Collar Crime: The phrase “white-collar crime” was coined in 1939 during a speech given by Edwin Sutherland to the American Sociological Society. Sutherland defined the term as “crime committed by a person of respectability and high status in the course of his occupation.” Although there has been some debate as to what qualifies as white-collar crime, the term today generally encompasses a variety of nonviolent crimes usually committed in commercial situations for financial gain. Many white-collar crimes are especially difficult to prosecute because the perpetrators use sophisticated means to conceal their activities through a series of complex transactions. The most common white-collar offenses include: antitrust violations, computer and internet fraud, environmental law violations, insurance telemarketing fraud, bankruptcy fraud, healthcare fraud, environmental law violations, insurance fraud, mail fraud, government fraud, tax evasion, financial fraud, securities fraud, insider trading, bribery, kickbacks, counterfeiting, public corruption, money laundering, embezzlement, economic espionage and trade secret theft. (Source: Cornell University Law School)
Windfall From A Deceased Relative: A lawyer contacts an American citizen to inform him that one of his long-lost relatives has died overseas, often but not always in Nigeria. The relative allegedly was an oil industry worker who died. The deceased relative, according to the lawyer’s message, has left a large amount of savings in a bank account that needs to be repatriated to the next-of-kin in the U.S. Apparently, all closely related family members are also deceased or untraceable; hence the unexpected contact with the long-lost relative. The American citizen victim, to obtain the financial windfall, must first pay a money transfer fee of $200 and the lawyer’s fee of $500 to $1,000. This solicitation comes with a letter or through email in the form of long, detailed messages. Adding credibility, the scammers customize the solicitation, tailoring the surname of the mythical dead person to match that of the targeted American victim.
When the victim insists that he has never heard of such a relative, the scammer makes an interesting argument. He has allegedly tried unsuccessfully for several years to find a real next-of-kin, and is on the verge of giving up. The lawyer lets it slip that he is not concerned if the American he is corresponding with is actually related to the deceased person – he just wants to ship the money and obtain his fee. (U.S. Department of State, “International Financial Scams-Internet Dating, Inheritance, Work Permits, Overpayment, and Money-Laundering”)
Work Permits: The personnel director at a multinational firm in Nigeria is looking for some intrepid, highly skilled people to do some difficult but well-compensated work in Nigeria. Alternatively, the organizer of an entertainment event in Nigeria is looking for entertainers from America to perform at their events. The employee stands to make at least $150,000 for six month’s work plus overtime pay. Even though all expenses are paid, the company will require the new employee to pay up-front certain work permit, visa, and immigration fees from their own funds. Unfortunately, this multi-national corporation or music mogul cannot pay the $1,800 fees for the applicant. The employer can only be sure that the applicant is serious about the offer by having him pay the up-front fees out of pocket. Consistent with the newer forms of the “419” Fraud scam, this scam is customized to fit the specific victim. The scammers know the victims are seeking employment and tailor the scam to match the type of job for which the victim is searching.
The scammer either posts job notices on legitimate classified sites, or has submitted fake company listings on Internet job sites such as Monster or Yahoo. In the case of entertainers, the scammer searches online for performers’ promotional websites. When they find a performer offering services, they craft a solicitation specifically for that entertainer’s specialty. (Source: U.S. Department of State, “International Financial Scams-Internet Dating, Inheritance, Work Permits, Overpayment, and Money-Laundering”)
139. Worker’s Compensation Fraud: Worker’s compensation is an essential employee benefit, entitling those persons who are injured on the job compensation while they recover. Worker’s compensation fraud is any practice that uses the Worker’s Compensation Program in any way that is contrary to either the intended purpose of the program or law. Fraud occurs when someone knowingly and with the intent to defraud, presents or causes to be presented, any written statement that is materially false and misleading to obtain some benefit or advantage, or to cause some benefit that is due to be denied. (Source: Department of Veterans Affairs, Office of Inspector General)