Over the past decade, fewer and fewer fraud cases were referred to law enforcement. In the 2018 ACFE Report to the Nations, a study of 2,690 cases of occupational fraud investigated by Certified Fraud Examiners (CFEs) between January 2016 and October 2017, 58% of cases were referred to law enforcement. The number has slowly been declining since 2008 when the rate was 69% of cases being referred to law enforcement. Interestingly, the rate of fraud cases that resulted in a civil suit has remained relatively steady over the same period, hovering around 23%.
When looking at why organizations do not refer fraud to law enforcement, the top reasons cited were a fear of bad publicity (38%), internal discipline considered sufficient (33%) and concern it would be too costly (24%). "While our data doesn't point to a specific explanation for this trend, we think it is worth highlighting because of the negative consequences it can have when fraudsters are not prosecuted," said John Warren, J.D., CFE, vice president and general counsel of the Association of Certified Fraud Examiners (ACFE) and one of the report's co-authors. "This enables them in many cases to move on to other employers and repeat their crimes."
Other findings include that the typical employee fraud case causes a loss of $130,000 and lasts 16 months. Losses caused by male fraudsters were 75% larger than losses caused by female fraudsters, and internal control weaknesses facilitated nearly half of the frauds.