Fraudsters: usually male, 36 to 55 years old and long-serving employees

• The typical fraudster is male, between 36 and 55 years in age and has been with a company for more than six years. Only 8% are individual perpetrators.

• Forty-six percent of fraud cases were committed without any use of technology – with cyber-attacks, AI and crypto-currencies playing only a minor role to date.

• The most common offenses were misappropriation of assets, falsified documentation and theft.

• One in five fraud cases involved a loss of more than USD 5 million.

• Internal controls are a key element in efforts to prevent and uncover fraud.

If a typical fraudster profile existed, it would be that of a male between 36 and 55 years of age who has been with a company for more than six years. The perpetrators do not display any suspicious behaviors such as having a grievance against the company or signs that they might be struggling in their personal or professional lives. They are considered friendly and extroverted and are generally perceived as being persons of respect – yet behind this façade often lies a strong sense of superiority.

The study also shows that almost three quarters of fraud cases (71%) are committed by groups of two to five people, while 8% were committed by individuals and 21% by groups of more than five people. These were often employees of multinational companies. In 52% of the fraud cases involving two or more people, women were also involved.

Despite ongoing digitalization, 46 percent of fraud cases were committed without the use of technology, while technology played a minor role in 35 percent of cases. “The use of technology leaves digital traces that are easier and quicker to detect. What’s more, companies are increasingly using technological solutions to optimize their defensive mechanisms,” says Bob Dillen, Head of Forensic at KPMG Switzerland. 

Dillen expects digitalization and AI in particular to play a growing role in cyber-crime, not least through the more frequent use of “deepfakes” to impersonate individuals with authority to approve transactions. 

The main motivation behind white-collar crime is financial gain, followed by opportunism. These acts are only rarely committed in response to a financial emergency or as a way of covering up the perpetrators’ own shortcomings, such as losses. The most common type of fraud was misappropriation of assets (52%), followed by falsified documentation (29%) and theft (24%). In nearly half of the fraud cases (45%), the loss amounted to less than USD 500,000. One in five cases involved a loss of more than USD 5 million.

Internal controls were insufficient in 76 percent of the fraud cases in the study. Fifty-one percent of the affected organizations did not have adequate preventive measures in place when the fraud was committed, while the rest indicated that they used codes of conduct (81%), internal audits (64%) and whistleblowing (60%) as control mechanisms.

Tip-offs received via official internal channels, such as whistleblowing hotlines or informal sources, were the number one detection method. “Combating economic crime requires not only effective systems but also employees who are aware of the risks and willing to take responsibility,” says Dillen.