The Fraud Examiner
Fleeting Shadows: No-Show Jobs and Fraud Schemes
Prof. Colin May, CFE
Adjunct Professor of Forensic Studies and Criminal Justice
Stevenson University, Forensic Studies Program
Mob movies play them up — a member or associate of an organized crime group needs to report legitimate income, and thus needs to show employment, steady wages and earnings documentation. They don’t know where the office or job site is. They don’t show
up to work at all, except when they need to collect their paycheck (they don’t seem to like direct deposit).
No-show jobs have been featured in recent indictments of organized crime figures, including allegations of procuring union memberships that then enable a person to obtain a no-show job.
In a case from 2014, the prosecutor’s
press release spells out the specifics:
“From about December 2010 to about September 2011,
[the defendant] had a ‘no-show’ job at the [company], that is, a job for which
he was paid wages and benefits but which he did not perform. When [the
defendant] did not complete his required deliveries, he was nevertheless, based
on his fraudulent representations, paid wages by the [the company] and accorded
benefits from employee pension and welfare funds managed by the [union].”
We’ve all seen or read about these cases involving organized crime, but what about other situations or more common scenarios? What exactly is a “no-show” job and how does it impact the work of a fraud examiner?
Where they fall on the Fraud Tree
No-show jobs are a form of asset misappropriation; they constitute a fraudulent disbursement and are under the payroll scheme category in the ACFE Occupational Fraud and Abuse Classification System (also known as the Fraud
Tree). No-show jobs are essentially falsified earnings. The employer — sometimes unaware, but sometimes by choice or through threat — pays the person a salary and benefits without having them perform the requisite duties in the company. This is a
way to funnel funds out of a business as well as decrease the net taxable profit.
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