fraud - Linkenheimer LLP CPAs & Advisors

3 Common Forms of Insurance Fraud (and How Businesses Can Fight Back)

Businesses of all shapes and sizes are well-advised to buy various forms of insurance to manage operational risks. But insurance itself is far from risk-free. You might overpay for a policy that you don’t really need. Or you could invest in cheap coverage that does you little to no good when you need it.

Perhaps the most insidious risk associated with insurance, however, is fraud. Dishonest individuals, whether inside your company or outside of it, can exploit a policy to defraud your company. Let’s explore three of the most typical forms of insurance fraud and some best practices for fighting back.

1. Premium diversion

According to the website of the U.S. Federal Bureau of Investigation, this is the most common form of insurance fraud. It occurs when an employee or insurance agent fails to submit premium payments to the underwriter. Rather, the person steals the funds for either personal use or to cover other business expenses.

By Linkenheimer LLP|2024-01-31T16:47:46+00:00January 31st, 2024|fraud, insurance|0 Comments

That Email or Text from the IRS: It’s a Scam!

“Thousands of people have lost millions of dollars and their personal information to tax scams,” according to the IRS. The scams may come in through email, text messages, telephone calls or regular mail. Criminals regularly target both individuals and businesses and often prey on the elderly.

Important: The IRS will never contact you by email, text or social media channels about a tax bill or refund. Most IRS contacts are first made through regular mail. So if you get a text message saying it’s the IRS and asking for your Social Security number, it’s someone trying to steal your identity and rob you. Remember that the IRS already has your Social Security number.

“Scammers are coming up with new ways all the time to try to steal information from taxpayers,” said IRS Commissioner Danny Werfel. “People should be wary and avoid sharing sensitive personal data over the phone, email or social media to avoid getting caught up […]

By Linkenheimer LLP|2023-07-05T19:17:36+00:00July 5th, 2023|fraud, irs, News|0 Comments

Commission Fraud: When Salespeople Get Paid More Than They’ve Earned

Many employees — from retail workers to sales staffers involved in complex business-to-business transactions — receive part of their compensation from sales-related commissions. To attract and retain top talent, some companies even allow employees to earn unlimited commissions.

Unfortunately, some commission-compensated employees may be tempted to abuse this system by falsifying sales or rates. Fraud methods vary depending on an unethical salesperson’s employer and role. But companies need to be aware of the possibility of commission fraud and take steps to prevent it.

3 forms

Generally, commission fraud takes one of three forms:

Invention of sales. A retail employee enters a fake purchase at the point of sale (POS) to generate a commission. Or an employee involved in selling business services creates a fraudulent sales contract.
Overstatement of sales. Here, a worker alters internal sales reports or invoices or inflates sales captured via the company’s POS.
Inflation of commission rates. An employee changes a company’s commission records to reflect a higher pay rate. Employees who don’t have access to such records might collude with someone who does (such as an accounting staffer) to alter compensation rates.

More sophisticated schemes can involve collusion with customers and other outside […]

By Linkenheimer LLP|2022-01-07T20:21:59+00:00January 7th, 2022|fraud|0 Comments

Protect Your Business with a Cybersecurity Assessment

Years ago, it may have seemed like only government agencies with top-secret intel or wealthy international banks had to worry about hackers. Nowadays, even the smallest small business could see its reputation ruined by a data breach, while larger companies could have their sensitive data taken hostage in a ransomware attack that costs millions to resolve.

A cybersecurity assessment can help ensure that your business is taking the proper steps to protect itself. It can also give you a competitive edge by demonstrating to customers and prospects that you take data privacy seriously.

More tech, more risk

Many, if not most, of today’s companies are taking advantage of technologies that allow them to gather, track and analyze customer and financial data. This includes software for mission-critical activities such as payroll, accounts receivable and payable, supply chain management, HR and benefits, and on-site security.

These systems are often cloud-based, meaning the information is stored online so users can access it remotely at any time of day or night. The convenience and analytical power are breathtaking, but they also create a tempting target for cybercriminals and raise the stakes of exposure exponentially.

In truth, the risk of a breach […]

By Linkenheimer LLP|2021-11-09T18:04:40+00:00November 9th, 2021|business, fraud|0 Comments

Client Alert: Beware of Payment Instructions Over Email

We have been seeing an increase in criminal cyber-fraud schemes affecting both large and small businesses, individuals and banks. With the increase in remote work, online payments and email usage, a common fraud we are seeing more of is criminals are using a Business Email Compromise (BEC) hack as a way of posing as the company sending the invoice to the recipient, then upon payment, the payors account gets drained with little to no trace of the criminal tied to the fraud.

So how does it work and what is a BEC?

Business email compromise (BEC) or “phishing” is a technique used to gain access to your company email so criminals can impersonate a co-worker, manager or other trusted business partner to steal sensitive data and money. With access to your business email accounts, criminals can steal money through fraudulent wire transfer requests, fake invoices, diverting payroll and more. Protecting your email is essential. BEC emails usually contain no malware and are therefore difficult to detect with common email filtering means.

How does a typical BEC scam work?

A common technique is email spoofing. Email spoofing occurs when the email appears to be sent by […]

By Linkenheimer LLP|2021-01-13T19:10:32+00:00January 13th, 2021|fraud|0 Comments