I.T. Procurement Fraud: How Tech Insiders Cheat Their Employers

 
 
By Baselinemag  |  Posted 2006-06-07
 
 
 

A number of information-technology managers stand accused of ripping off their employers, allegedly using "shadow companies" and inflated or bogus invoices—in some cases, stealing tens of millions of dollars or more. The scam? It's called procurement fraud, and it's more prevalent than many people realize. Here's how it works.

Story Guide:

Introduction
Procurement fraud is common, experts say, and it's often very hard to detect.

Case #1: Buca
The Minneapolis-based restaurant chain accuses its former CIO of taking kickbacks.

Case #2: Canadian Department of National Defence
Canadian authorities say the Department of National Defence was the target of a complex billing scheme.

Case #3: New York City Office of Chief Medical Examiner
The former management information systems director at New York City's Office of Chief Medical Examiner is charged with setting up shadow companies to bilk the agency after 9/11.

Case #4: The Electric Reliability Council of Texas (ERCOT)
A former CIO and other I.T. staffers allegedly defrauded, through shell companies, an organization that oversees Texas' electricity power grid.

Context:

  • Six Steps To Prevent I.T. Procurement Fraud
  • Calculating The Cost Of A Fraud Detection System
  • A Look At How One Expert Got To The Bottom Of I.T. Procurement Fraud

    QUESTION: What's the best way to crack down on I.T. procurement fraud? Let us know at baseline@ziffdavis.com