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

This blog is the fifth in a series of six posts.

This blog continues my discussion of the Association of Certified Fraud Examiners (ACFE) “Occupational Fraud 2026 – A Report to the Nations”.   This week I focus on how companies/organizations react after a fraud has been discovered and what their experiences are in attempting to recover fraud losses:

• Sixty-eight percent (up from 67 percent in 2024) of victim companies/organizations terminated the perpetrator while another 8 percent permitted the perpetrator to resign.
• However, 19 percent (up from 16 percent in 2024) companies/organizations allowed the perpetrator to remain with the organization either with probation/suspension (9 percent), written or verbal warning (6 percent) or no punishment at all (4 percent).
• Fifty-two percent (down from 53 percent in 2024) of all owners/executives were terminated by the victim company/organization.
• Fifty-four 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-five percent of victim companies/organizations filed civil suit against the perpetrator. This is consistent with the 20-25 percent average during the past ten years.
• Forty-eight percent (up from 45 percent in 2024) of perpetrators referred to law enforcement pled guilty or no contest while another 24 percent of perpetrators were convicted at trial.
• In 14 percent (the same as in 2024) 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 2 percent (down from 3 percent in 2024) of cases referred to law enforcement resulted in the perpetrator being acquitted.
• Forty-three percent (up from 37 percent in 2024) of companies/organizations that filed civil suits received a judgment in their favor while another 39 percent of such suits were settled before a verdict was reached.
• Perpetrators obtained a favorable judgment in 13 percent (down from 20 percent in 2024) 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).
• The overall trend over the last six years is that more perpetrators are fighting either the criminal or civil fraud charges in court.
• 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 (21 percent of non-referred cases)
  • Fear of bad publicity (35 percent of non-referred cases)
  • The company/organization reached a private settlement with the perpetrator (20 percent of non-referred cases)
• One additional key reason that companies may not refer to law enforcement or take legal action is that only 44 percent of companies recovered some (29 percent) or all (15 percent) of the fraud loss from the perpetrator.

My final blog in this series will focus on how perpetrators concealed their frauds

If you have any questions about potential fraud in your business, you should speak with a Certified Fraud Examiner from an experienced firm that provides forensic accounting services in Philadelphia and the Delaware Valley. The Philadelphia forensic accounting firm of David Anderson & Associates can be reached 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.