Industry Specific Fraud – Lessons from the Real World

Why This Matters

• Fraud doesn’t look the same everywhere.
• Industry context shapes what goes wrong, who’s involved, and how it’s hidden.
• Understanding industry-specific red flags makes your fraud controls smarter, sharper, and more relevant.

Use Cases by Sector

Real Estate & Construction

• Fraud Pattern: Falsified vendor invoices, kickbacks for approvals, ghost workers on site
• Red Flag: Repetitive payments to same vendors, inflated material costs
• Control Tip: Perform geolocation checks on vendor addresses, split duty between request and approval

Healthcare

• Fraud Pattern: Overcharging insurance, ghost billing, upcoding, and unqualified prescriptions
• Red Flag: Surge in claims near quarter/year-end, repeat codes for same patients
• Control Tip: Automate audit sampling of claims, monitor claim-to-treatment ratios

Retail & Distribution

Fraud Pattern: Cash theft, loyalty scheme abuse, false returns

• Red Flag: Frequent refunds to same card/customer, no video proof of returned item
• Control Tip: POS fraud analytics, anonymous staff reporting on collusion

Financial Institutions

• Fraud Pattern: Insider trading, false approvals, account manipulation
• Red Flag: Transactions just below reporting thresholds, overrides by same officer
• Control Tip: Segregation of duties, daily KRI dashboards, conduct risk profiling

Manufacturing

• Fraud Pattern: Raw material diversion, production overstatement, invoice rounding
• Red Flag: Shrinkage not matching defect rates, spike in supplier returns
• Control Tip: Physical audit + analytics blend, match PO/invoice/GRN triad regularly

Key Takeaways

1. Know your sector’s pressure points
2. Customize controls to actual operating risks
3. Use internal audit to simulate fraud scenarios
4. Train staff in real-world examples
5. Refresh fraud risk register annually

Crowe’s Cross-Sector Forensic Experience

We bring deep regional expertise across:

Jointly owned property & OA audits

Government grants and subsidy reviews

Retail loyalty fraud mapping

ERP audit trail and override analysis

Health insurance and pharmacy fraud reviews

Closing the Series: What’s Next?

• This concludes our Fraud Risk Management Series
• But we’re just getting started... Stay tuned for upcoming flyers
• Let’s build trust, transparency, and resilience together.