The Fraud Examiner

Taking the Law Into Your Own Hands — Legally

 September 2012 

By Peter Goldmann, CFE 

Folks in the fraud-fighting business rightfully complain about the large number of fraudsters who are…

Never prosecuted 

Given a “slap on the wrist” by the criminal justice system 

Allowed to walk around freely until they’re brought to justice 


Take the case of Robert Moffat, a former senior executive at IBM who admitted in 2010 to participating in the largest insider trading scandal in U.S. history. He received a prison sentence of six months for his misdeeds.


And then there are those disturbing statistics reported by the ACFE in its biannual Report to the Nations on Occupational Fraud & Abuse showing that most internal frauds last some 18 months before being detected. 


Which means, of course, that many last much longer. Take the case of Sujata "Sue" Sachdeva, former vice president of finance and secretary of the $50 million-per-year Milwaukee-based headphone manufacturer, Koss Corporation. Sue was able for eleven years to perpetrate an embezzlement that cost her employer nearly $34 million. She received a sentence that matched the age of her fraud: 11 years for a crime the government called “complex.”


Justice eventually caught up with Sachdeva, but it boggles the mind that she was able to perpetrate her fraud for more than a decade before being caught. These and thousands of cases like them are enough to dampen the motivation of any hard-working fraud examiner, prosecutor, auditor or law enforcement official. After all, why should they invest endless hours of grueling work in a case that may never see the perpetrator punished in a way that doesn’t scream “fraud pays?”

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