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Purchasing & Procurement White Collar Crime

White collar crime is a term referring to any unlawful and/or passive types of behavior committed by both business and government related professionals or white collar workers—hence the name, white collar crime. These crimes often involve various forms of fraud, theft or other violations of trust that occur throughout the employment of these professionals.

White collar crime is alarmingly common within the workplace, because it’s rather easy for people in positions of authority to secretly conduct these unlawful actions; many of these potential cases go undetected. Due to this, white collar crimes like procurement fraud are an increasingly common issue within several companies.

Purchasing & procurement fraud is perhaps the most common form of white collar crime at various businesses and enterprises, since it primarily involves the handling of product manufacturing and/or the purchasing of the aforementioned products. This type of white collar crime can involve fraudulent costs and/or labor, defective pricing and parts, price-fixing, bid-rigging and even product substitution.

Mid-size companies and even small businesses are also susceptible to this hidden white collar crime. As reported through the Massachusetts based Wicked Local news, a store clerk of Fall River, Massachusetts was recently charged by a grand jury on October 11th; the man’s main charges were for procurement fraud and the conspiracy to commit procurement fraud.

The man was another Massachusetts store clerk granting permission to customers to use state Supplemental Nutrition Assistance Program or SNAP benefits for the purpose of illicitly exchanging food stamps for cash. He later reappeared in court on October 26th, answering the charges covering his conspiracy to defraud the state out of thousands of dollars.

The Fall River store clerk was later arraigned, pleading not guilty to his charges and was remitted to the Middlesex County Jail on a bail of $1,000, with the condition that he relinquish his passport.

As implicated by the previous example, purchasing & procurement fraud is now more prevalent, thanks to the current financial times; nowadays, an employee, manager or even higher official may feel a need to secure their assets in an unethical manner.

In fact, around 75% of economic-related crimes, including procurement fraud cases, happened within a company, likely by employees living beyond their means or suffering from financial difficulties. The aforementioned study was conducted by the 2009 Global Economic Crime Survey, a telling look into the factors making up economic crime today.

Procurement fraud is a very real problem that siphons valuable company finances out of the system—and into the pockets of those regularly committing this white collar crime to their benefit.

November 8, 2012
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BY Bellwether

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