Question

As a Special Agent, I investigated a case where an employee was conspiring with a vendor and stole several thousands of dollars. The vendor set up several businesses and obtained EINs for those businesses. The employee then set up the companies in the system and the vendor provided the company with fictitious invoices for services that were not provided.

An obvious red flag was the vendor had the same address and phone number for the different entities in the system.

What are some other possible red flags related to vendor fraud?

Answer 1

Other Possible Red Flags related to this vendor fraud are:

• Having same owner for all such vendor companies
• The Vendor Tax identification number be same for all different entities
• Bank account number of the vendor be same for all different entities(may be limited no. of bank account numbers)
• The employee processing the fake invoices for all this different entities be the same(so, only one system& user id access be used by the employee)

There can be other Possible Red Flags based on the systems & procedures maintained by the company.