Let’s be honest: very few people or brokers are going to feel sorry for any bank that gets defrauded. That’s probably the first thing worth acknowledging, because it’s also where the problem starts. Once something gets labelled as “only hurting a bank”, it becomes easy to ignore. Easy to justify and look the other way.
But before you do that, it’s worth asking a simple question. Would you knowingly help fund an Organised Crime Group (OCG)? Would you knowingly support something that contributes to terrorism, violence or exploitation?
I am going to assume that most brokers would say no without hesitation, but the reality is, you don’t get asked that question directly.
You get asked to do something that looks completely different on the surface, and the connection to anything more serious is far enough removed that it doesn’t feel real. And that’s where I think brokers and bankers get…
CLICK HERE to read the FULL Who is the real victim in mortgage fraud? – The Adviser article.
PAYROLL & HR CONTROLS (PREVENTING “GHOST” SCHEMES)
Payroll fraud is often the hardest to detect because it “looks” like a normal business expense.
- Segregation of Duties (SoD): The person who adds new employees to the system must not be the same person who approves the monthly pay run.
- Mandatory Vacation Policy: Require all financial and HR staff to take 5–10 consecutive days of leave annually. Fraud often surfaces when the perpetrator isn’t there to “hide” the trail.
- Ghost Employee Audit: Perform a quarterly “Headcount Reconciliation” where managers must physically verify every name on their payroll list exists.
- Self-Pay Blocking: Ensure the payroll software has a hard-coded block preventing administrators from editing their own salary or bank details.