Criminal measures as a response to corporate fraud

A global research about fraud and economic crimes made by PwC identified that half of the companies in Brazil and worldwide suffered some type of crime or were victims of any type of fraud between 2016 and 2017.

The research results also revealed that anti-fraud measures have gained prominence and is now an essential business matter.

Despite the investments on prevention and mitigation of fraud in corporate environments have grown in the last couple of years, as well as executives being more aware of the risks, using technology as an ally to manage them, few companies are actually working to minimize the impact of such practices on their activities.

Frauds practiced by internal agents in the purchasing area, in the human resources sector, and in the accounting area are a reality for small, medium and large companies in Brazil.

Due to the great difficulties in repressing such practices, especially those related to clandestine embezzlement of payroll values and purchase of supplies, many companies choose to invest on prevention in the technology area, forgetting that fraud is the product of a human action, based on a combination of conditions, motivations and opportunities.

In fact, experience shows that a large portion of corporate fraud associated with misuse of resources, are committed by employees who know the company’s internal control and monitoring processes very well, thus exploiting its vulnerabilities.

Therefore, companies need to develop a more rigid hiring process in their strategic areas, in addition to strengthening risk assessment practices in the organizational culture.

On the other hand, the repression of fraud in the corporate environment cannot be reduced to carrying out internal investigations to ascertain the losses suffered, in order to justify the dismissal of the employee responsible for the criminal practice.

The inability to react adequately to a fraud can pose a serious reputational risk to the organization, both internally and externally.

In addition, the consequences of the criminal practices can be substantial and costly, penalizing managers, and creating insecurity in the work environment.

The Criminal liability of the perpetrator is essential, either to demonstrate the company’s seriousness and severity in combating the fraud practiced, or to minimize the economic losses suffered by the organization.

Our pioneering and differentiated performance in supporting and representing companies that are victims of corporate fraud demonstrates that the initiation of a police investigation, the adoption of patrimonial injunctions to freeze values and to identify and constrict assets acquired through criminal practice, and the monitoring of the investigation, aiming at the criminal liability of the employee responsible for the crime, bring significant results for our customers, from a repressive point of view and also regarding the compensation for damages.

1 Tirando a fraude das sombras – Pesquisa Global sobre Fraudes e Crimes Econômicos 2018 – Pwc