Fraud case

timer Asked: Nov 2nd, 2015

Question description

Kristynn Graham, a woman from Smithville, Alabama, was a shopping addict and had run up considerable debt on excessive purchases of jewelry and clothes. She would also go to the grocery store and slap down plastic, take her kids to miniature golf, and go bowling with her husband. Christmases were a "little bigger," with gifts like $100 remote-control cars for her sons. Now, she was finding the best way to not tell her husband about the addiction. She made $11 an hour at Durban, and her husband earned a little bit more as a machinist at an aircraft company. Family finances were a constant balancing act. Kristynn turned to her employer, Durban Consulting. She raised money to pay down her obligations by repeatedly padding the company's expense accounts. She took reimbursements for trips and conferences she did not attend. In her 3 years of work, she had collected a total of $240,000 from her employer. It got to the point where she didn't feel like she was doing anything wrong.

When Durban found out, Graham admitted the fraud and pled guilty to one count of fraud and said that she was planning to pay it back.

1.  What type of fraud did Kristynn Graham commit? 

2. What is the other name fro this type of fraud?

3.  List and discuss any four factors or weaknesses that could have resulted in this type of fraud. 

4.  What could be done to avoid or reduce this kind of fraud in a company? What specific segregation of duties could have been in place to prevent Kristynn from committing this fraud?

5. It is said that this kind of fraud does not result in as much loss as fraud committed by management or top executives. Why do you think this is so?

6. Name the three components of fraud triangle and describe how each one existed in the scenario

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