• Internationally, companies, government institutions and not-for-profit organizations lose 5% of revenue annually due to fraud by their own employees

Bucharest, August 3, 2021 - More than 75% of companies in Romania are being defrauded by their own employees, with periods of crisis amplifying the phenomenon of occupational fraud, according to an analysis by Corporate Intelligence Agency, a risk management company dedicated to business.

"2020 came with movement restrictions and wage cuts. Some employees realized that they needed to resize their expenses relative to the salary left after the cuts. Another part looked for alternative solutions to <> losses and even increase revenues.

Organized crime has turned for funding to companies with big budgets and low fraud detection capabilities, such as retail, insurance, banking, logistics, etc. The share is increasing, especially in a crisis. We have seen this in 2008-2009, but especially in 2020 in the context of the economic crisis caused by the COVID pandemic - 19"says Gabriel Zgunea, CEO Corporate Intelligence Agency.

Internationally, companies, government institutions and not-for-profit associations lose 5% of revenue annually, on average, due to fraud committed by their own employees, managers and even shareholders, according to a report on occupational fraud and abuse by the Association of Certified Fraud Examiners (ACFE).

"We believe that the percentage is higher in Romania, where corporate intelligence services, which can significantly reduce losses and occupational fraud, are being used far below their potential. Also, very few companies in Romania have in place anti-fraud mechanisms or solutions to deal effectively with suspected fraud or violations of internal operating regulations"he adds Gabriel Zgunea, noting that in Romania, compared to other parts of Europe, fraud is seen as an inherent business risk, and managers believe they should accept this.

But financial losses are not the only consequences of internal fraud. Companies suffer massive reputational damage as a result, which can lead to a loss of credibility and market confidence

Moreover, in some cases, internal fraud can lead to criminal investigations against the company and criminal liability.

In conclusion, we recommend companies to pay more attention to anti-fraud mechanisms, especially in the current context, where the pandemic and the crisis generated by it have contributed to the amplification of the fraud phenomenon.

Most common types of fraud

• various conflict of interest schemes - probably one of the most common fraud schemes in Central and Eastern Europe: employees determine or influence the allocation of contracts to companies founded or controlled by them or their relatives (a common pattern in every industry);

• preferential treatment or allocation of contracts given to certain business partners - usually seen in the pharmaceutical, retail and real estate development industries;

• manipulation of insurance policies, in particular through illicit arrangements between anti-fraud employees and customers;

• manipulating bank loans;

• compromising email with help from inside the company;

• Misappropriation or theft of assets (unauthorized use of company cars, laptops, machinery of any kind) also observed very frequently in every industry.

Although lagging behind companies in Western Europe, companies in Romania are becoming increasingly interested in improving their risk management and compliance systems, as they face a growing number of internal frauds or potential internal frauds that risk jeopardizing their reputation and assets.

The companies that generate the most applications are in the retail, investment, banking, manufacturing, pharmaceutical, IT, oil & gas, construction, logistics, insurance, telecom, management, industrial services, telecommunications, management, etc.

Corporate Intelligence Agency has set up specialized departments within the company, with investigators and analysts who are familiar with the fraudsters' operating patterns, and proposes a One-Stop-Shop approach based on 4 strands:

• Complex risk assessments, aimed at identifying any existing vulnerabilities that could lead to compliance breaches and fraud, carried out by qualified management consultants and anti-fraud specialists;

• preventive actions, such as background checks of prospective business partners and key employees, customized compliance policies / improvement of existing compliance policies;

• Complex fraud investigations for existing suspected fraud through innovative tools such as infiltrating companies with specialized staff able to detect employees involved in fraud schemes;

• legal assessments of the potential consequences of fraud and corporate liability.

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About Corporate Intelligence Agency

Corporate Intelligence Agency is a risk management company dedicated exclusively to the business environment, specializing in identifying and mitigating potential risks or threats to the security and integrity of partners.

Corporate Intelligence Agency offers premium solutions in Applied Intelligence, Competitive Intelligence and Risk Management, utilizing the latest technologies, together with the dynamism, creativity, experience and continuous development of our team of experts.

Corporate Intelligence Agency services are addressed to all companies and corporations that understand the importance of using professionals to gain knowledge on topics, markets, or situations of interest, as well as to reduce risks or vulnerabilities in areas that may affect the company's security.