"back office" fraud in view of the increase after the tip recession

ORLANDO, Florida  - "back office" fraud is draining corporate treasures of billions of dollars per year, and the risk is growing businesses and employees of struggle following the recession, finance managers, and experts say.

The fraudulent schemes in the ministries of finance company include the creation of false sellers, billings for goods, non-existent checks written to dummy corporations and kickbacks from vendors.

"Most companies are weak in the area of the back office and vendor fraud and is a major threat for them", Michele Edwards, an expert in fraud, said Reuters this week in the margin of a corporate finance professionals Conference.

In General, it takes 18 months to detect fraud, said Edwards.

In an informal survey of managers of the 622 finance during the May 8-12 Conference Orlando, 72% reported having seen an increase in cases of fraud of back-office, Tom Bohn, President of the Institute of financial transactions, said Friday.

The Institute, which brings together several associations across corporate finance professionals in the world, was launched this week in the Conference of Orlando.

Bohn and Edwards, said some of the increase in reported loss could be the result of increased attention of companies and the detection of the, return of fraud on the Office over the past two years.

That focus has come in response to federal regulators U.S. taking a tougher line against companies that were not enough to prevent fraud which caused losses of the shareholder.

SQUEEZE ON PERSONAL FINANCE

But Edwards and Bohn said the recent recession has increased the risk of fraud.

Company cutbacks had led to some employees, becoming solely responsible for what had previously been two separate functions, and there had been a reduction in internal controls and balances and controls Agency.

The tightening of the recession on personal finances and family life of the employees is also a factor, said Edwards.

"They get a rise." They get a game that (retirement plan). Those are just additional pressures that have been in the past two years which may have their caused to do something unfortunate like fraud, many people - where they could not be in a normal environment - "says Edwards.

She said that the end of the recession will not solve the problem.

"You have these expectations of shareholders and CEO, hey, we are from the recession." It's back to business. It is to return to the mode of growth. That pressure is not really go far, "said Edwards.

Companies are beginning to employ safeguards such as software, analysis and fraud prevention specialists tools to detect problems. They begin to discover and to close the potential for fraud and build a corporate culture that discourages it.

"If focus you on the culture, you can reduce the risk from the first day," said Bohn. "The more money you can save to leave the company, the better your profitability will be.".

AIG seeks to recover billions, he lost to fraud (Reuters)

 American International Group Inc. sued two companies managing cash Thursday in the beginning of a fight to recover billions of dollars, the refloated-out insurer said he lost because of fraud.

The insurer, 92% owned by the Government of the United States, joined the ranks of swelling of investors and insurers that take on Wall Street on so-called safe investments related to the mortgage at the heart of the financial crisis of 2008.

Insurance giant sued ICP Asset Management and Moore Capital of the New York State Supreme Court, but indicated that legal proceedings have been the beginning of a campaign that would put the major Wall Street banks in its sights.

AIG, which received $ 182 billion in rescue money, argued that he suffered losses through mortgage-backed securities that created one of the financial companies.

PIC could not be reached immediately for comment. A spokesman for Moore said: "we haven't seen the complaint and therefore cannot comment."

AIG campaign will probably aim to Bank of America Corp., Goldman Sachs Group Inc., and other Wall Street banks, according a person familiar with the strategy of AIG.

Banks selling mortgage bonds AIG with range high credit ratings have fallen since value.

Goldman Sachs and the Bank of America declined to comment on.

Investors, bond insurers and the Federal home loan banks have already sought tens of billions of dollars of banks for misrepresenting the quality of real estate loans that were packaged in bonds called mortgage-backed securities.

While none of the lawsuits went to trial, Bank of America recently concluded an agreement of $ 1.6 billion with the insured Guaranty Ltd., who has insured the mortgage bonds. Some legal, and financial analysts said that many showed the legal claims that pose a real risk to banks.

PART OF THE LARGER REVIEW

AIG reported that prosecution more could be on the road.

"At the annual meeting last year, CEO of AIG Bob Benmosche said that we would review our reports with all counterparties with whom we have business before and during the crisis to see if they we aggrieved by their behavior.". This combination is the first result of this review, the company said.

The prosecution was brought by AIG financial products unit in the context of "overall efforts the insurer to recover potentially billions of dollars of the fraudulent conduct of the defendants and the other parties", said the complaint.

Some stock analysts announce the ultimate cost of claims against various titles of mortgages from banks could reach tens of billions of dollars.

Claims could put an end to their return from America alone almost $ 30 billion, said Chris Gamaitoni, an analyst with Compass Point research & Trading LLC.

However, that could be spread over many years as a large part of the issue has bogged down in the procedure.

The United States Government rescued AIG at 2008 financial panic, pumping billions into society, after she and other giant financial companies suffered huge losses of securities linked to the crash of the housing market United States.

A great advantage of the rescue of AIG and will store possible Government before the 2012 U.S. elections would be a boost for the administration of Obama kick, in the wake of the success to Citigroup Inc. and General Motors Co.

A spokesman for the US Treasury, he was not involved in the decision to prosecute those responsible for the money.

350 MILLION ALLEGED DAMAGES

The trial said obligations breached defendants for AIG related to the creation of obligations backed complex or CDO.

AIG said it has suffered more than 350 million dollars in damages and interests of the alleged misconduct, which included using values inflated on mortgage bonds that were packed in the CDO. Inflating values, PKI created windfall profits for itself and to enlarge its management fees, the prosecution argued.

The complaint is based on the continuation of dry last year against PKI in Manhattan Federal Court, accusing the investment advisory firm of violating federal securities laws on several occasions.

The case of AIG is products financial AIG c peak Asset Management LLC et al, Supreme Court of New York, New York County, no. 651117/2011.