Bosses gamble with fraud losses
Courier Mail, January 13, 2008

IT may just be $50 missing from the cash box. It may be a stolen wallet. It may be false expenses claims for entertaining clients or for taxi rides home after a late night at the office.

But they are all indications that something is amiss, and that a staff member may have a gambling problem that is getting out of hand.

Often it is in the workplace where the money is found to fuel the addiction.

According to the latest KPMG fraud survey, gambling addiction and greed are the most common drivers of fraud in Australian and New Zealand workplaces.

Renea Hughes, from NSW, late last year admitted to the Independent Commission against Corruption that, among other actions, she embezzled $366,000 from RailCorp in false invoices paid to a contractor and friend, that she faked $100,000 in salary claims and fraudulently used a rental car for two years, costing the company $30,000.

She admitted that every cent of the stolen $366,000 went into the pokies at pubs.

The mother-of-two admitted she would lose up to $40,000 a month in binges that went until dawn.

“Fraud in the workplace costs Australian businesses more than $77.5 million each year and often this is due to offenders seeking money for gambling,” First Advantage Managing Director - Asia Pacific South Peter Stackpole says. “This highlights the importance of not only checking a candidate's criminal record but their employment history”.

If someone has had four jobs in 12 months, it is worth asking why.

“Missing petty cash or falsifying invoices may have played a role in why the individual left each job, but may not have been reported to police.”

Gambling can become an addiction as pernicious as a drug addiction, with all the attendant and consuming emotions of anticipation, excitement, euphoria and despair.

While the pokies loom large in people's minds as the main form of gambling addition, horse and dog racing, scratchies, even the little old ladies' game of bingo also play a significant part.

Even though it has been said that people have a greater chance of being hit by lightning than winning big with gambling, the addiction can over-rule reality.

“To minimize the risk of hiring fraudulent employees, employers should thoroughly check as many components of the candidate's history as possible,” Mr. Stackpole says.

“The more points of reference an employer gains about a potential employee, the more informed the hiring decision.”

Mr. Stackpole says many firms invest time and money in managing fraud rather than in on-going fraud prevention through screening new and existing employees.