Fraud, Economic Crime, and Procurement Integrity
Fraud, Economic Crime, and Procurement Integrity
This domain tests detection and proof of fraud against the government, procurement improprieties, bribery, conflicts of interest, and financial record analysis. Expect questions on elements, indicators, and coordination with auditors and prosecutors.
Core rules
- Fraud requires a false representation or deceptive act, knowledge or intent, materiality, reliance where applicable, and loss or benefit. Common theories include false claims, false statements, wire fraud, theft, bribery, and gratuities.
- Procurement indicators include unusual bid patterns, identical errors in competing bids, split purchases to avoid thresholds, missing receiving reports, phantom vendors, and contractor employees with government purchase cards.
- Preserve the contract file, emails, invoices, receiving documents, badge logs, and financial records. Build a transaction timeline and quantify loss.
- Bribery requires a quid pro quo; a gratuity may be unlawful without a specific quid pro quo. Conflicts of interest can exist even without proof of a bribe.
- Coordinate with contracting, audit, and legal offices; avoid advising on contract remedies as if they were criminal conclusions.
Worked example
A vendor invoices the unit for 40 radios, but the receiving report shows 10 delivered. The agent compares invoices, purchase orders, inventory, and emails, then interviews the receiving official. Reasoning: the discrepancy is an indicator, not proof; the agent must establish knowledge, intent, and the false representation, and preserve records before confronting suspects.
Traps
Treating a contract dispute as fraud without intent evidence; failing to obtain the complete contract file; ignoring internal controls that allowed the loss; and quantifying loss from invoices without verifying delivery.