Fraud is continuing to increase this year, in part due to the COVID-19 pandemic, according to a new survey by the Association of Certified Fraud Examiners.
The report found that 79 percent of anti-fraud professionals have seen an increase in the overall level of fraud as of November, compared to 77 percent in August and 68 percent in May. Thirty-eight percent of the respondents said in November the increase has been significant, compared to 34 percent in August and 25 percent in May.
James Pruskowski is the CIO and co-founder of 16Rock, a full-service asset management firm specializing in Municipal Bonds. He leads the firm's flagship 16Rock Municipal Opportunities Fund LP, a long-short hedge fund, as well as the firm's long-only Separately Managed Account (SMA) client business.
Mr. Pruskowski spent nearly three decades at BlackRock starting in 1994 shortly after the firm was founded, when it had only 50 employees and $25 billion in assets under management. He was a Managing Director, Portfolio Manager, and Head of Municipal Bonds, Institutional & Wealth Management. Mr. Pruskowski was a member of the management committee and led a team of 58 investment professionals, driving strategic growth initiatives and innovation. He has a proven track record over multiple investment cycles and award-winning performance.
Before focusing on municipal bonds, Mr. Pruskowski was a multi-sector taxable fixed income portfolio manager. He was instrumental in launching BlackRock's Financial Institutions Group, which has grown into the world's leading insurance asset management business. He provided a wide array of services in balance sheet management, analytics, capital markets, and portfolio construction to banks, insurance companies, and official institutions worldwide. Mr. Pruskowski began his career in Risk & Quantitative Analytics as a risk analyst and programmer, playing a key role in the development of what is now known as BlackRock Solutions.
Mr. Pruskowski is a thought leader and content expert, known for his diverse skills, experience, and energetic, detail-oriented, and structured approach. His hands-on, can-do attitude drives results. As an industry advocate with strong brand awareness, he frequently speaks publicly, engages with the media, and collaborates with clients. He possesses a unique talent for understanding, designing, and clearly explaining markets and complex concepts in an accessible manner.
Paul Wnek is founder, CEO and principal solutions architect at ExpandAP, a 14x certified Salesforce B2B solutions architect, founder and CEO of Coalescence Cloud (Salesforce Consulting Partner) and Salesforce certified AI associate.
Hagit Levy-Shalev is an associate professor in the Stan Ross Department of Accountancy in the Zicklin School of Business at CUNY's Baruch College.
Cyber fraud, payment fraud (such as schemes with debit and credit cards) and identity theft are the three top fraud schemes seeing increases, according to anti-fraud professionals.
The largest increase in observed fraud was in financial statement fraud, with 7 percent more anti-fraud professionals reported seeing financial statement fraud in November, compared to August. That could be because as companies continue to see their profits drop, they feel more pressure to cook the books.
The survey also found 77 percent of anti-fraud professionals report that investigating and preventing fraud is more challenging now, while 71 percent said detecting fraud is more challenging as a result of the pandemic.
ACFE members anticipate the fraud trend will continue, even as vaccines have begun rolling out this week in the U.S. Ninety percent of the survey respondents expect a further increase in the level of fraud over the next 12 months, with 44 percent predicting the change is likely to be significant.
Nearly half (48 percent) of the organizations polled expect to increase their investments in anti-fraud technology, and 38 percent intend to raise the use of fraud-related consultants or other external resources. Budgets for anti-fraud training and professional development are experiencing a similar increase (according to 37 percent of the organizations polled), but nearly one-quarter (24 percent) anticipate a decrease in this area. The budget component most likely to see decreases is travel for anti-fraud staff, which shouldn’t be surprising given the plunging levels of air travel in general over this past year, with 38 percent of the survey respondents expecting a reduction in funds for travel in the year ahead.
