FORGED MAKER SCHEME

1
FORGED MAKER SCHEME

• Definition
• A check tampering scheme in which an employee
  misappropriates a check and fraudulently affixes
  the signature of an authorized maker

2
Whose the Maker ?
Joan Smith
Joan Smith is the Maker Maker Posses Signature
authority
3
The Case

• Betty
• Executive Director
• Duties
• Reconcile Bank statements
• Prepared Checks
• Payroll
• Daily Transactions

4
Something is Wrong

• Unauthorized Donations
• Made to a not-for-profit
• Guess where Betty also worked?
• Unauthorized Expenses
• Payroll Fraud

5
Pressure / OpportunityRationalization

• Gambling Addict
• Lack of Controls
• Ill pay it back

6
Red Flags

• Voided Checks
• Missing Checks
• Checks payable to employees
• Questionable Signatures
• Questionable payee or payee address

7
Forged Maker Scheme

• Checklist
• Need a check
• Decide who to make it payable to?
• Forgery
• Converting the check
• How to Conceal

8
Acquiring a Check

• Fraudster gains access to checks
• Job provides access
• Dont have access

9
Make Payable To ?

• To themselves
• Shell company
• To an Accomplice
• Payable to Cash
• Payable to Vendors

10
The Forgery Act

• Free-hand
• Photocopied
• Automatic Check-signing Instruments

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Converting the Check

• Endorsement
• Typically the Name of the payee
• May require fake identification
• Red Flag Employee endorsement on a cancelled
  check

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The Tricky Part

• Concealment
• Problem for fraudster
• Omitting the Check
• Alter the bank statement
• False Vendor
• Overstate legitimate disbursements

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Detection

• Bank Reconciliations
• Accuracy
• Alterations
• Examine Canceled checks
• Handwriting analysis

14
Handwriting Analysis

• Pattern
• Everyone possesses
• Normal variations
• Natural variations
• Exemplar
• Compare
• Does it fall within the individuals Normal or
  Natural range?

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Why we need an Expert?
- Authorized Signature
- Forged Signature
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Questions ?
17
Reference Page

• Fraud Information News Letter Association of
  Certified Fraud Examiners Dec 2001.
  http//www.cfenet.com/media/archivedetails.asp?num
  3-42
• Retter, Ronny CPA. Fraud Schemes Check
  Tampering mmta online April/May 2002
  http//www.mmtanet.com/members/bulletin/april_may0
  2/tax_issues _april_may02.htm
• Spectrum Consultants A full spectrum of
  handwriting consultants Jun 4 2000.
• http//iwhome.com/spectrum/signatur.htm
• Stebbins, Jeremy M. Personal Interview. 21 Feb
  2003
• Vogel, Don, et al. Financial Investigations a
  Financial Approach to Detecting and Resolving
  Crimes. Washington United States Printing
  Office, 1998
• Wells, Joseph T. Occupational Fraud and Abuse.
  Austin Obsidian Publishing Company, 1997