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 my discussion of the Association of Certified Fraud Examiners (ACFE) “Occupational Fraud 2024 – A Report to the Nations”. In this blog, I focus on how companies and organizations react after a fraud has been discovered, and what their experiences are in attempting to recover fraud losses:

• Sixty-seven percent (up from 61 percent in 2022) of victim companies or organizations terminated the perpetrator while another 9 percent permitted the perpetrator to resign.
• However, 16 percent (down from 19 percent in 2022) of companies or organizations allowed the perpetrator to remain with the organization either with probation or suspension (11 percent) or no punishment at all (5 percent).
• Fifty-three percent (up from 40 percent in 2022) of all owners or executives were terminated by the victim companies or organizations.
• Fifty-seven percent of victim companies or organizations referred the matter to law enforcement. This percentage has steadily declined from 69 percent of companies or organizations which did so in 2008.
• Twenty-seven percent of victim companies or organizations filed civil suits against the perpetrator. This increased over the 20-to-25 percent average during the past ten years.
• Forty-five percent (up from 44 percent in 2022) of perpetrators referred to law enforcement pled guilty or no contest while another 27 percent of perpetrators were convicted at trial.
• In 14 percent (down from 17 percent in 2022) 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 companies or organizations could not produce sufficient documentation and other evidence for the authorities to be confident that they could obtain a conviction).
• Only 3 percent (down from 10 percent in 2022) of cases referred to law enforcement resulted in the perpetrator being acquitted.
• Thirty-seven percent (up from 27 percent in 2022) of companies/organizations that filed civil suits received a judgment in their favor while another 37 percent of such suits were settled before a verdict was reached.
• Perpetrators obtained a favorable judgment in 20 percent (down from 29 percent in 2022) of civil cases (most likely because the companies or organizations could not produce sufficient documentation and other evidence to convince the trier of fact of the perpetrator’s guilt).
• The overall trend over the last four years is that more perpetrators are fighting either criminal or civil fraud charges in court.
• Victim companies or organizations which decided not to refer cases to law enforcement cited the following reasons for their decision:
  • A belief that internal discipline was sufficient (49 percent of non-referred cases)
  • Fear of bad publicity (34 percent of non-referred cases)
  • The companies or organizations reached a private settlement with the perpetrator (24 percent of non-referred cases)
• The median loss for companies or organizations which chose not to pursue the perpetrators was $63,000 for those which chose to not refer to law enforcement and $95,000 for those who chose to not pursue a civil action.
• The median loss for companies or organizations which chose to refer the perpetrators to law enforcement was $250,000 and was $300,000 for those which chose to pursue a civil action.

The sixth and final blog in this series will focus on how perpetrators of fraud conceal their actions.

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 in Philadelphia who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Valuation Analyst, and a Certified Fraud Examiner in Philadelphia.

If you require the services of a Certified Valuation Analyst in Philadelphia 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 david@davidandersonassociates.com.