Hard Times can lead to acts of desperation. During the Great Depression rural areas saw increased petty property crimes – illegal fishing and crop picking, as well as a violent crime wave by notorious and newly-minted public enemies.
The current recession has produced its own wave of burglaries, robberies, and scam artists. Neighborhood Watches have intensified in Las Vegas and Miami as residents contend with a sudden up-tick in break-ins, car-thefts and other “crime of opportunity.” Copper, (which has been steadily rising in value), is increasingly being pilfered, everywhere from foreclosed homes, to Bangor Hydro Electric Co. in Maine, to Pennsylvania’s mines.
Perhaps more fitting with these times is the increase in financial and online fraud. According to NPR, the poor economy is also leading to increases in “data breaching”: identity theft, credit card fraud, and insurance schemes. Reports of online crimes are up one-third from last year to 350,000 complaints.
But not all of the fraudsters are professional criminals, or big-time Ponzi scheme masterminds. In fact, many often come from the ranks of disgruntled employees. Risk managers are most worried about embezzlement plots and organized data theft by insiders: “administrative staff, back-office employees, traders and tellers.”
According to the Association of Certified Fraud Examiners the number of embezzlement crimes are likely to continue increasing. Times are rough and layoffs are leaving holes in companies’ internal fraud controls.
It’s not just Wall Street that should worry. Employee embezzlement happens in other sectors too. Last week, the ex-Chief Financial Officer of Michigan Public Health Institute, was charged with embezzling $120,000 from the non-profit.