Fraud Investigations Pinpoint Characteristics of Fraudsters

The perpetrators of fraud come in all shapes and sizes, demographically speaking.  But fraud investigations throughout the years have been able to pinpoint the more typical characteristics of a fraudster, and some of the results are surprising.

“Understanding the traits of the average fraudsters isn’t going to allow you to look at your employees and pick out who is and who isn’t going to steal from your organization,” said David Anderson, principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of fraud investigation and fraud deterrence programs in the Delaware Valley.  “But understanding who these people are is another important component of a comprehensive fraud deterrence program.”

The Association of Certified Fraud Examiners (ACFE) collected extensive data about the people who commit fraud during the association’s biennial international survey to study the costs, schemes, perpetrators and victims of fraud.  Below are highlights of the latest findings as outlined in the ACFE’s 2014 Report to the Nations.

Although most people believe fraudsters are career criminals, Anderson said, surprisingly more than 86 percent of fraud perpetrators never had been charged or convicted of a fraud; another seven percent had been charged but not convicted.  Almost 82 percent of fraudsters never had been punished or terminated by a previous employer for fraud-related conduct, and an additional nine percent had been terminated but never punished.

Another surprise involved the tenure of the employee committing the fraud, Anderson said.  More than 45 percent of fraud perpetrators had been with their company between one and five years – neither a very short time nor a very long time.  Less than six percent had tenure of under a year, while 25% had tenure of more than 10 years.

Not surprisingly, Anderson said, was the finding that the higher the position the employee held, the greater the loss.  Frauds carried out by a regular employees caused a median loss of $75,000, while those carried out by a managers caused a median loss of $130,000 and those carried out by owners/executives caused a median loss of $500,000.

Fraud investigations have found 52 percent of all fraud perpetrators were between the ages of 31 and 45 and that men were twice as likely to be the perpetrator as women.  Also, the older or the more educated the perpetrator, the higher the loss tended to be, usually because these people were higher up in the organization.

“It definitely helps to understand the portrait of a typical fraudster,” said Anderson, a Certified Fraud Examiner and an ACFE member.   “But remember, in reality, frauds are committed by all kinds of employees — men and women; young and old; low-level and high-level; well-educated and less-educated; long-time and short-time, and those with and those without a history of committing fraud.  You need to be sure you have adequate anti-fraud controls in place to protect your organization from perpetrators of any type.”

Anderson believes the most effective protection for every organization comes from a comprehensive fraud deterrence program created by an experienced firm that provides forensic accounting services in Philadelphia and the Delaware Valley.

Anderson will continue to share findings from ACFE’s 2014 Report to the Nations.  The Association of Certified Fraud Examiners is the world largest anti-fraud organization, dedicated to fighting fraud through its more than 70,000 members in more than 150 countries worldwide.

If you require the services of a Certified Fraud Examiner or any other forensic accounting services in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at

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, litigation support, economic damage analysis, business consulting and outsourced CFO services.  Company principal David Anderson 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.