Food & Beverage
The Food & Beverage Industry is the fastest-moving industry in regards to changes. Consumer tastes, preferences, packaging, manufacturing, storage, and transportation are constantly changing, challenging the industry. It has been years since the news of the horse-meat scandal first broke and rocked the industry. After Ireland’s Food Safety Authority tested a range of frozen and ready meals from supermarkets and found horse DNA in over one-third of the beef samples, and pig in 85% of them. Very quickly, several retailers and manufacturers withdrew their products from shelves. As well as highlighting the complex nature of the supply chain in the food industry, the scandal turned the spotlight on food and beverage industry fraud. But what is food fraud?
Fraudulent products are common to many households – from cheese, honey, herbs to spices. Last year, the Italian press revealed a large-scale criminal network that was selling fraudulent olive oil in Europe. Seven major producers were found to label their Extra Virgin Olive Oil even though the product contained significant amounts of lower quality oils – which did not meet EU labelling rules for extra virgin olive oil.
The latest food fraud scandal involved Parmesan and the use of excess cellulose as an anticaking agent- wood pulp. Grated parmesan companies Kraft Heinz Co. and SuperValu Inc. were accused of food fraud in 2016 and have not been able to end the multi-district litigation still. 30% to 70% of oregano products bought from a range of shops in the UK and Ireland and online retailers were found to be adulterated. The study found that 25% of 78 samples of dried oregano from 50 UK retailers “across the board” tested positive for non-oregano ingredients.
There are several other food products commonly use for fraud such as fruit juices, grains, milk, fish, organic items, and beverages such as alcohol. Just in the UK food fraud is estimated to cost the industry £11 billion per year. Food fraud is an emerging risk given the complexity of global food supply chains. Food fraud is a major food safety issue, and an extreme example of this is fraudulent booze. Fake alcohol can contain chemical substitutes such as cleaning fluids and car screen wash and fuels, methanol and isopropanol – used in antifreeze.
But what can manufacturers do to stop food and beverage industry fraud affecting their supply chain? From Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions, and other professional Investigative Research solutions at CRI Group, we can help you! Learn more about our solutions and contact us today.
Automotive
The automotive industry is the world’s largest economic sector by revenue. And the uncertainty and risk in this global industry are never-ending. It faces uncertain times as the specter of a trade war between countries crucial to the global car market looms. Recent developments in the automotive industry such as the maturation of the sharing economy, the advent of connected cars, artificial intelligence, and automation in manufacturing and driving are fostering an evolution.
However, the automotive industry is possibly one of the very few industries that are thriving during the COVID-19 pandemic. The Guardian “UK car dealer sales rise as Covid drives people from public transport” reported a jump in new and used vehicle sales in July as buyers rushed to secure alternatives to public transport following the easing of the UK’s coronavirus lockdowns.
From Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions, and other professional Investigative Research solutions at CRI® Group we can help you! Learn more about our solutions!
Aviation
The aviation industry is facing a series of challenges that must be addressed in order to sustain profitable growth. Over the course of the next 20 years, the global commercial aircraft fleet is expected to double to approximately 45.000 aircraft, a growth particularly driven by increased air travel due to an expanding middle class in emerging economies. However the supply chain struggles to keep up with demand due to the ramp-up in production, volatility in the geopolitical and economic environment is increasing, and a growing labour shortage is lurking in the background.
The aviation industry was the first industry into suffering from the direct impact of the COVID-19 pandemic. And aviation is still among the worst affected parts of the economy. According to BBC news “Aviation industry buckles up for turbulent times” in May, Europe’s passenger numbers were down 99%. Airlines are making colossal losses.
The world’s major Aerospace & Defense (A&D) companies, has created the top 10 risks for the aviation industry in 2020 and beyond. The experts at CRI® Group are positioned to help any organisation, with risks such as managing and retaining talent with employment background screening, managing the supply chain with due diligence solutions, compliance with a wide range of regulations and restrictions through our ABAC solutions; failure to realise the benefits of M&As and partnerships and lack of Business Intelligence.
Learn more about how our Risk Management, Employee Background Screening, Compliance Solutions, and other professional Investigative Research can help your business.
Insurance
The insurance sector is made up of companies that offer risk management in the form of insurance contracts. As an industry, insurance is regarded as a slow-growing, safe sector for investors. Every type of insurance is vulnerable to insurance fraud. Insurance fraud cases are often committed by opportunists – such as claim fraud, where perpetrators invent or exaggerate a claim; or application fraud, where they deliberately or recklessly provide false information when applying for insurance. There are well-known cases of highly organised criminal gangs with money-making enterprises based on insurance fraud. In UK “Crash for Cash” is a dangerous insurance scam which includes criminals deliberately causing collisions with innocent drivers. It’s a nationwide problem, but check out the worst-affected areas here.
Insurance fraud cases cover a wide range of schemes and crimes, intended to enrich the fraudsters at the expense of insurance providers and other innocent victims. With the enormous liability presented by insurance fraud, every organisation should address the risk in their due diligence and fraud prevention programs. The experts at CRI® Group are positioned to help any organisation, including captive insurance companies, domestic, alien, Lloyds of London, mutual and stock companies implement this as part of a risk management plan.
When fraud is detected, CRI® Group’s investigations cover the full range of insurance fraud cases, from healthcare fraud to disability and even fake death claims. CRI® Group’s experts are thoroughly trained, for example, to look for the tell-tale signs of fraud through carefully reviewing claims, medical and hospital records, conducting interviews, examining statements and documents and performing on-site inspections. Our agents leave no stone unturned when investigating suspected insurance fraud. Insurance firms’ ability to integrate technology, talent, and business-model innovation into how they do business may be the key to their success in the future.
Learn more about how insurance fraud investigation services can help your business.
Property
The property industry involves real estate (including land and buildings/structures) and other tangible properties, and can also include mineral rights and other resources. Unfortunately, for as long as there has been a market for buying and selling land, property, and resources, there have been schemes that aim to defraud.
According to the law society there are eight types of property fraud on the rise: Identity theft and impersonation; Buyers; Sellers; Lenders; Conveyancers; Companies; Title fraud and registration fraud; and Mortgage fraud.
Some of the schemes even have colourful names: “chunking,” “builder bailout,” “phantom sale” – yet all are illegal and harmful to unwitting victims, which can include individuals and families, banks, holding companies, investors groups, and others.
Property industry fraud can be very convincing because perpetrators will often produce fake or forged documents, and will sometimes work in collaboration with other fraudsters. For example, a crooked investor might provide kickbacks to an appraiser in return for inflating the value of a property, or he/she may sell a property to a “straw buyer” at an inflated price, with the straw buyer intentionally going into default (and splitting the proceeds of the loan with the fraudulent investor). There are many more scams, and all of them look for vulnerabilities among buyers and sellers alike.
CRI Group’s team of experts, including Certified Fraud Examiners (CFEs), works with property groups and companies dealing in real estate to uncover red flags of fraud. Our agents will help assess a transaction before it takes place, and can implement asset recovery solutions in the case where fraud has already occurred. This extra level of protection is crucial for any organisation conducting real estate transactions.
From Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions and other professional Investigative Research solutions at CRI Group we can help you! Learn more about our solutions and contact us today.
IT & Telecommunications
IT (Internet technology) and telecommunications industry providers are the engines that help power commerce on a global scale. This massive industry includes companies that provide the infrastructure for communication across multiple countries and continents, including phone and internet providers. Given their role and the technology on which they (and all of us) depend, these services must always be on guard for vulnerabilities to fraud.
The threat level is high and the types of fraud span a wide spectrum, including digital identity theft, data security breaches, cyber fraud, fraud using voice services, stolen and counterfeit technology (including smartphones, tablets, smartwatches, and other devices), and – perhaps the most major concern – consumer fraud. A recent survey by the Communications Fraud Control Association found that over USD $12 billion is being lost to consumer-based fraud attacks such as subscription and account takeover. (CFCA, 2017)
Examples of companies in the IT and telecommunications industry include wireless operators, internet providers, satellite companies, and cable companies. They are typically regulated by government bodies, though such regulation varies over industry and location. At CRI® Group, our corporate security and technology experts provide a top-down assessment of security processes and are experienced in finding weaknesses and vulnerabilities affecting telecommunications operations. It’s crucial to be proactive when preventing fraud in this area – a single security breach can affect millions of users worldwide.
Learn more about our solutions for your business.
Finance & Professional services
Fraud is of the utmost concern for finance and professional services organisations. These include banks and financial institutions, real estate lenders, business credit and finance companies, commercial investment corporations, asset-based lenders, debt financing firms, acquisition capital firms, and others. Having safeguarding processes in place is required both from a legal and compliance standpoint and from the position of being a trusted, secure financial institution.
The financial sector includes new Anti-Money Laundering (AML) rules and legislation, and these regulations are strict and increasingly enforced. As such, remaining in compliance through implementing proper prevention controls is a must. Failing to do so can mean a loss of business, trust, and reputation: banking giant Citibank was recently fined $70 million in the U.S. for failing to address shortcomings in its anti-money laundering policies. (Reuters, 2018)
Professional services organisations also face the risk of accounting fraud – with embezzlement being one of the biggest threats. The FCA currently (18/05/2021) has 50 investigations on foot involving unauthorised activity involving 183 suspects. Many of these cases have an overseas jurisdictional challenge. And FCA are using their powers to seek restitutionary outcomes as well as to bring criminal prosecutions where we can. For example, recently FCA succeeded in obtaining compensation orders in the sum of £3.6 million against 4 individuals and a company in favour of 259 investors where the court found there was unauthorised activity and breaches of section 21. And recently also brought a money laundering charge against a defendant whom we allege was involved in laundering almost £1 million from investment scams directed by overseas agents against UK consumers. We have several other cases arising from our work on suspected scams close to charging decisions.
At CRI Group™, our forensic accountants are trained to follow the money not only in the finance & professional services industry but across all sectors. And when it comes to AML services, CRI Group™ is uniquely positioned to help organisations stay ahead of the curve with anti-money laundering measures and the processes required to remain fully in compliance with applicable laws and regulations. This provides financial institutions, their business partners, and their clients the confidence of knowing that the organisation, and its reputation, are protected from the negative consequences of money laundering. From Risk Management, Employee Background Screening, Business Intelligence, Due Diligence, Compliance Solutions, and other professional Investigative Research solutions at CRI Group™ we can help you! Learn more about our solutions and contact us today.
Pharmaceutical & Healthcare
Fraud involving pharmaceutical companies and healthcare providers constitutes a major source of economic waste affecting countries around the world. In spite of increased awareness of the problem and the application of sophisticated anti-fraud mechanisms, individual actors and agencies continue to defraud public and private health systems.
With rapidly aging populations and the increased costs of providing long-term care, placing substantial pressure upon already overburdened health and social care sectors, healthcare spending will continue to increase worldwide. Unfortunately, this will also bring increased fraud schemes, as fraud perpetrators follow the money – and healthcare presents a target-rich environment. Quantitative data indicate that healthcare fraud has already risen starkly.
Globally and in the U.S. in particular, pharmaceutical fraud account for a large number out of all crimes in health care, which result into severe costs to the society. The Academy of Managed Care Pharmacists in “Fraud, waste, and abuse in prescription drug benefits – 2019” (posted May 20) estimate that pharmacy fraud is 1% of costs, therefore estimating that pharmacy fraud costs at $3.5 billion, given that pharmacy costs are $358 billion (Statista: Prescription drug expenditure in the United States from 1960 to 2020, 2021). he World Health Organisation (WHO) estimates that, where losses have been measured and the types of health expenditure have been covered, the average annual cost of fraud totals 7.29 per cent of healthcare budgets (Gee and Button, 2014).
CRI Group’s fraud investigators (including forensic accountants and Certified Fraud Examiners) look for red flags and vulnerabilities that may indicate healthcare fraud. CRI Group’s experts have uncovered schemes including billing for services not rendered, up-coding of services, up-coding of items, duplicate claims, unbundling, excessive services, unnecessary services, kickbacks, and more.
In addition, pharmaceutical companies face the threat of counterfeit medications, which can lead to major financial loss, not to mention dangerous consequences for patients. This is why the strictest measures and prevention strategies are needed for any pharmaceutical or healthcare organisation. Learn more about our solutions for your business.
Oil, Gas & Energy
The oil, gas & energy industry is a massive portion of the world’s economy, dealing mainly in petroleum – including upstream (exploration, development, and production of crude oil or natural gas) and downstream (oil tankers, refiners, retailers, and consumers) pipeline. As a raw material, petroleum is used for a number of chemical products, including pharmaceuticals, fertilisers, pesticides, solvents, and plastics.
However declining demand, investor pressure, excess supply, and competition from renewable energy will put intense financial pressure on executives to prove that the industry is still viable as an investment. While the industry has promoted a narrative of plastic demand growth and carbon capture innovation to justify the industry’s expansion, these narratives have set expectations that appear increasingly unrealistic and misleading.
With so much at stake in terms of money and resources, it should be no surprise that the oil and gas industry is rife with fraud risks. Much of this criminal activity concerns investment scams. Whether limited partnerships, complex lease agreements, and general partnerships, fraudsters will seek to find vulnerable targets. Oil and gas investment schemes often use telemarketing boiler rooms and email promotions to find investors to dupe. They are con artists who use high-pressure sales techniques to squeeze hard-earned dollars from unwary investors. If companies do not prepare quickly, executives will increasingly face pressure to cover for struggling performance or risky choices, creating conditions ripe for financial fraud.
CRI Group’s commercial investigation agents know the red flags of oil, gas & energy industry fraud schemes. Our team will conduct thorough due diligence for every investment opportunity so that investors will understand the true nature of the investment and go into a transaction with a full set of facts. Large, reputational oil and gas organisations are also at risk – from contractors, prospectors, and any fraudster looking to take advantage of vulnerabilities.
Let our team of Certified Fraud Examiners (CFEs) conduct a full fraud risk assessment and implement necessary safeguards to help prevent fraud. Learn more about our solutions for your business.
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