Corra Daily Planet » 2005 » August

Internal Bank Fraud

Sat, August 20th, 2005 - 7:02 pm - By Gordon Basichis

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Marketing Sherpa gave this quote in a recent article regarding selling services to Commercial and Savings institutions:

We’ve all heard about banks who’ve lost critical customer data by shipping unencrypted files via UPS or who have had laptops stuffed with customer data stolen or gone missing. Those are the big stories that make the news. What doesn’t make the news is that 50 – 70% of fraud happens on the inside, according to Jacob Jegher, a senior analyst with IT firm Celent LLC, in an interview with American Banker.

For major banks with tens of thousands (or more) employees, protecting against internal fraud is an almost incomprehensible undertaking. Employees can easily bring in storage devices such as MP3 players and PDAs to steal data or can download Instant Messaging programs, which are difficult for IT to monitor, let alone regulate for compliance reasons.

Inside jobs account for 50 to 70% of bank fraud? It’s a frightening statistic. While it’s important to note that today’s hand held storage devices give employees an easy and anonymous method of stealing data, it doesn’t account for their will to commit fraud. What makes them do it? Is the temptation overpowering? Are they disgruntled employees, upset by draconion corporate policies and uncompetitive compensation & benefits practices? Are they in debt themselves; mortgaged to death and desperate for some cash.

Financial advisors warn that past performance isn’t a guarantee for future actions, but any saavy investor takes note of the past before investing. Likewise, banking institutions need to start taking a better look at their job applicant backgrounds. If their staff is commiting 50 to 70% of the fraud, then the institution will pay the price in reputation and lost revenue.

Banking institutions should be implementing a clear and consistent background check program for all prospective job candidates as well as periodic updates for current employees. Furthermore, banks should institute more comprehensive and up to date background examinations of employees who promote from within to positions of higher authority and fidicuary responsibility.

Protecting against internal fraud means periodically checking the credit reports of current employees. Employers may think their staff members are financially secure because they are earning a paycheck, but in reality, most people live paycheck to paycheck, especially now that mortgages payments account for approximately 50% of household expenses. Now imagine a family emergency, a poor investment, or even a gambling or drug addiction to create the conditions needed for desperation. If you have an employee like this, wouldn’t you like to know if they have a previous criminal record?

When implementing a pre-employment screening policy, it is important to secure a signed authorization from the applicant to periodically review records in the event they are hired. A periodic screening policy shows clients and investors that you are making a commitment to protecting their assets.

To read more about setting up or improving your background check program, please visit Corra Group’s website Corra’s customized background check programs will meet your needs, no matter the size of your firm.

Corra can be reached at (310) 966-1556.

Fred’s Storied Career

Thu, August 18th, 2005 - 7:00 pm - By Gordon Basichis

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A five-time felon has spent his life elaborately lying his way into jobs at churches, nonprofits and UCLA. Now he’s ready to go straight. Maybe.

By Tonya Alanez, Times Staff Writer

Each morning as he backed down the driveway of his Glassell Park home, Federiqkoe DiBritto III couldn’t be sure if that day was going to be his last on the job.

For months — much longer than he had any right to expect — his luck held.

Then on April 21, DiBritto, a fundraiser for the UCLA medical school, was summoned to his supervisor’s office, handcuffed and taken to jail.

DiBritto, who had been hired for the $100,000-a-year UCLA job with what seemed to be excellent credentials, was really Fred Brito, a con man and five-time felon. UCLA detectives arrested Brito after a tip from the Los Angeles Police Department.

Brito, 49, has spent his adult life using aliases and phony credentials to pull off one elaborate deception after another. He has lied his way into jobs as a Catholic priest, a youth counselor for a foster care agency and executive director of the National Kidney Foundation of Southern California, among many others. He once convinced a judge he was a psychiatrist in order to testify in a friend’s criminal trial.

Sometimes his poses have landed him in jail. Other times, he’s been allowed to leave jobs quietly. His latest unmasking put him behind bars for a couple of weeks while authorities decided what to do.

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