David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of fraud investigation, forensic accounting, and marital dissolution services in Philadelphia and the Delaware Valley.

This blog continues the analysis by forensic accounting expert David Anderson of the Association of Certified Fraud Examiners’ (ACFE) “2020 Report to the Nations – 2020 Global Study on Occupational Fraud and Abuse.”  This week, Anderson – from David Anderson & Associates, a Certified Fraud Examiner in Philadelphia – focuses on how companies and organizations react after a fraud has been discovered, and what their experiences are in attempting to recover fraud losses:

• Sixty-six percent of victim companies/organizations terminated the perpetrator while another 10 percent permitted the perpetrator to resign.
• However, 14 percent of companies/organizations allowed the perpetrator to remain with the organization either with probation/suspension (nine percent) or no punishment at all (five percent).
• Only 45 percent of all owners/executives were terminated by the victim company/organization.
• Fifty-nine percent of victim companies/organizations referred the matter to law enforcement. This percentage has steadily declined from 69 percent of companies/organizations which did so in 2008.
• Twenty-eight percent of victim companies/organizations filed civil suit against the perpetrator. This increased over the 20-to-25 percent average during the past ten years.
• Fifty-six percent of perpetrators referred to law enforcement pled guilty or no contest while another 23 percent of perpetrators were convicted at trial.
• In 12 percent of cases referred to law enforcement, the authorities declined to prosecute (most likely due to either the size of the loss not being large enough or because the company/organization could not produce sufficient documentation and other evidence for the authorities to be confident that they could obtain a conviction).
• Only two percent of cases referred to law enforcement resulted in the perpetrator being acquitted.
• Forty-one percent of companies/organizations that filed civil suits received a judgment in their favor while another 36 percent of such suits were settled before a verdict was reached.
• Perpetrators obtained a favorable judgment in 21 percent of civil cases (most likely because the company/organization could not produce sufficient documentation and other evidence to convince the trier of fact of the perpetrator’s guilt).
• Victim companies/organizations which decided not to refer cases to law enforcement cited the following reasons for their decision:
  • A belief that internal discipline was sufficient (46 percent of non-referred cases)
  • Fear of bad publicity (32 percent of non-referred cases)
  • The company/organization reached a private settlement with the perpetrator (27 percent of non-referred cases)
  • The belief that pursuing a conviction would be too costly (17 percent of non-referred cases)
  • The lack of sufficient evidence to persuade law enforcement to pursue the matter (10 percent of non-referred cases)
• Fifty-four percent of victim companies/organizations recovered nothing from either the perpetrator or other sources (such as insurance).
• Thirty percent of victim companies/organizations made a partial recovery and another 16 percent made a full recovery.

The next and final blog article in this series will examine how non-profits were affected by fraud over the past two years.

Do you need the services of a Certified Fraud Examiner? If so, you should speak with one from an experienced firm that provides forensic accounting services in Philadelphia and the Delaware Valley. You can do this by contacting the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at david@davidandersonassociates.com.

About David Anderson & Associates

David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley.  The experienced professionals at David Anderson & Associates provide forensic accounting, business valuation, fraud investigation, fraud deterrence, litigation support, economic damage analysis, business consulting and outsourced CFO services.  Company principal David Anderson is a forensic accounting expert who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Fraud Examiner, and a Certified Valuation Analyst.