The Need for Outside Investigators in Occupational Fraud: A Case Study on Misuse of the Corporate Uber Account
Recent statistics from the Association of Certified Fraud Examiners’ (ACFE) 2024 Report to the Nations highlight that organizations lose an estimated 5% of revenue annually to fraud. While internal controls and monitoring are essential first steps, engaging independent investigators can be crucial when potential fraud is detected. A recent investigation conducted by our firm helps illustrate why.
The Investigation
An organization retained our firm to investigate concerns that a director-level employee had made potentially fraudulent charges to the organization’s corporate Uber account. These concerns were first brought to the organization’s attention by a member of the finance team, who noticed unusually high charges on the corporate Uber account. Our investigation focused on determining whether the employee made non-work-related charges to that account.
Our investigative process included: (1) Detailed analysis of Uber transaction data spanning 12 months; (2) Review of delivery addresses and order patterns; (3) Examination of the organization’s expense policies and procedures; (4) Interviews with key personnel, including the subject employee; and, (5) Analysis of internal controls and approval processes.
The Findings
Our investigation determined that out of 582 orders and almost $40,000 the employee charged to the corporate Uber account over one year, 450 of the orders—totaling over $32,000—were for personal use, rather than legitimate, work-related expenses. We also provided the organization with a detailed analysis of the types of orders the employee placed (i.e., rides, restaurants, groceries, etc.), the delivery locations, and the merchants who appeared most frequently.
The investigation revealed that while the organization had some controls in place, there was no formal approval process for employee Uber charges. This aligns with the findings from the 2024 ACFE Report, which indicates that the lack of internal controls (32%) and the override of existing controls (19%) are the two most common factors that contribute to occupational fraud.
Why Independent Investigators Matter
This case demonstrates three key reasons why organizations benefit from engaging independent investigators:
Expertise and Resources: The ACFE reports that organizations who detect fraud more quickly and utilize trained fraud investigators experience lower median losses from occupational fraud. Our investigators brought specialized experience in analyzing intricate financial records and conducting complex investigations.
Objectivity: As external investigators, we provided an unbiased evaluation of the evidence without internal political considerations or preexisting relationships affecting our analysis.
Comprehensive Documentation: Our investigation produced a detailed report documenting the methodology, evidence, and findings, which is crucial for any potential future actions and policy improvements.
Lessons Learned
The 2024 ACFE Report found that organizations implementing anti-fraud controls experienced 50% lower fraud losses and detected schemes 50% faster than those without controls. Based on our investigation, the organization implemented several new preventive measures, including: (1) Enhanced review processes for corporate card charges; (2) Implementation of transaction limits; (3) More detailed monitoring of expense patterns; and, (4) Improved policies regarding acceptable business expenses.
This case illustrates why organizations should not hesitate to engage independent investigators when fraud concerns arise. The ACFE indicates that the median fraud scheme lasts for 12 months before it is detected, and this case was no different. However, the organization’s prompt engagement of outside investigators helped limit potential losses, as professional investigators bring the expertise, objectivity, and thoroughness needed to fully understand the scope of potential fraud, perform the analysis necessary for detailed findings, and help the organization develop more effective controls for the future.
