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CIFAS confirms link between staff fraud and organised crime
Research carried out by CIFAS and SOCA has shown that serious organised criminals are infiltrating legitimate organisations deliberately to commit fraud.
Initial research identified that out of 911 employees who had been dismissed for fraud and appeared on the CIFAS Staff Fraud Database about one tenth, 94 people, had the potential to be involved in serious organised crime.
Out of these 94 ‘high risk’ fraudsters:
• 10 were confirmed as involved in serious organised crime.
• A further 31 were considered likely to be involved in serious organised crime.
The figures indicated that 4.5% of those filed on the CIFAS Staff Fraud Database were assessed as being involved in, or likely to be involved in, serious organised crime.
Types of serious organised crime
Of the high-risk individuals, two particular types of criminality were prominent:
Facilitating: those people who used their professional role to enable criminal activity, for example by facilitating fraudulent transfers of funds or by passing personal data to crime gangs.
Money laundering: those employees who enabled criminals to move a high-volume of incoming and outgoing cash. This included the identification of individuals who had laundered money for drug dealers and large scale tobacco smugglers.
Gambling as a driver
The research further highlighted that gambling could instigate involvement in organised fraud, in particular use of gambling websites. There was evidence of significant activity on these websites by fraudsters before they stole from customers or their employers. In all cases the individuals had been dismissed and recorded on the CIFAS Staff Fraud Database.
CIFAS, UK’s Fraud Prevention Service, worked with the Serious Organised Crime Agency (SOCA) to compile the analysis.
CIFAS Chief Executive, Peter Hurst, commented “The level of organised criminality among those filed on the CIFAS Staff Fraud Database is higher even than we had expected. As such, it is an important wake-up call for employers and shows conclusively how dangerous insider fraud can be. Thorough staff vetting procedures have never been more vital and this research demonstrates the power of data sharing for all employers.”
Notes to Editors:
- CIFAS is the UK's Fraud Prevention Service with over 250 Member organisations spread across banking, credit cards, asset finance, retail credit, mail order, insurance, investment management, telecommunications, factoring and share dealing and the public sector. Members share information on identified frauds in the fight to prevent further fraud. CIFAS is unique and was the first data sharing scheme of its type in the world. Other schemes modelled on CIFAS have been set up in Southern Africa and Germany.
- CIFAS launched its Staff Fraud Database in 2006. It currently covers 205 organisations that share information on insider frauds that have been perpetrated against them. Members are drawn from the UK financial services industry, but also from telecommunications, insurance, recruitment and other business sectors. The launch of the Database was carried out in consultation with: the Information Commissioner's Office, the Financial Services Authority; the Confederation of British Industry; the Trades Union Congress and Chartered Institute for Personnel and Development.
- Serious organised crime is defined as crime committed by individuals on a continuing basis, normally working with others, for substantial profit or gain, for which a person aged 21 or over could expect to be imprisoned for 3 or more years on their first conviction.
(7 Nov 2011)