Techies Robbing Companies With Procurement Fraud
from the more-common-than-you-may-think? dept
These days, with the publicity surrounding the Enron trials, the idea of companies setting up elaborate schemes using shell corporations isn't that new. In the Enron case, it appears to have been a corporate effort to do so. However, there are plenty of cases coming to light of employees setting up shell corporations to rob their own employers. Five years ago, we wrote about a "Business Development" VP at Cisco who was caught setting up an elaborate scheme of shell companies and fake venture capital firms to divert plenty of Cisco money into his own bank account. When accused, he first claimed it was simply his effort to "think outside of the box," which is an interesting defense. However, Baseline Magazine has a collection of articles suggesting that this type of activity is actually more common than many believe, and that it's often the IT staff, with their huge budgets, that are able to set up such procurement fraud scams. The article has four examples of techie procurement fraud, including the NY City Medical Examiner's office using procurement fraud in the wake of 9/11 and the Canadian Department of National Defense robbing tax payers blind through shell corporations. However, perhaps the most stunning is the story of the restaurant chain Buca, which was the victim of procurement fraud from two top execs, who were so blatant as to set up one such shell corporation in the same building as Buca's headquarters and then billed Buca for the office space.