What happens in Vegas…don’t let it be identity fraud

Casino-related frauds abound and anywhere people walk around with large amounts of cash, street crime is plentiful.

Shortly after this is posted online, I will be on my way to one of the all-time greatest cities on the planet:  Las Vegas. I hope you are planning on joining me at the American Institute of Certified Public Accountants (AICPA) Forensic and Valuation Services Annual Conference November 10-12 at Caesars Palace (CPA Canada is co-sponsoring the event). I will be accompanied by my fellow blogger Edward Nagel, as well as two other leading practitioners from Canada and two practitioners from the States. Our panel has the making of a memorable session and we will present on Monday, November 11 at 9:30 am.  Please do introduce yourself if you are there!

OK, that takes care of the public service announcement, let’s talk about fraud. Vegas is a prime location for financial crime. Casino-related frauds abound and anywhere people walk around with large amounts of cash, street crime is plentiful. Consider this as well: the highly transient nature of the people in and out of Las Vegas makes it a hotbed for identity theft.

Here is a “fictional” tale for you. An identity (ID) thief arrives in Las Vegas and promptly takes a cab to Henderson, NV, an upscale suburb. Once in Henderson, the thief goes to Whole Foods grocery store (notorious for the upscale shopper). After feigning an interest in the organic food, the identity thief makes his way to the check-out line and positions himself in such a way as to see the chequebook of the patron in front of him. As the unsuspecting patron writes a cheque, the ID thief notes the patron’s name, their bank, the account number and the cheque number. Armed with this information, the expert forger creates a new chequebook, picking up the cheques in actual sequence.  Before the day is out, cheques have been written for thousands of dollars in Las Vegas and the thief is on a plane out of town. Too incredible to believe? Frank Abagnale, the subject of the movie Catch Me If You Can, and identity theft expert extraordinaire, described exactly this methodology at a conference I once attended in Las Vegas. He used this particular scheme regularly to fill up on cash as needed.  

How can one prevent being a victim of such a crime? In my years of fraud investigation, I have always found deterrence to be the most effective tool to preventing fraud. The simple act of being aware, observant and prepared may determine if you will become a victim… or not. When businesses implement deterrence methods, they send a message to would-be fraudsters: move on to the next business. Physical security at a business, whether large or small, is a simple deterrent. Controls over access to assets, such as cash, inventory, supplies and the accounting systems themselves is another critical deterrent. Creating an environment of openness and accountability is yet another factor. When employees see that ownership/management is engaged and cares, they tend to also care more and readily discuss situations that cause concern. A business can invest in great physical security and put world-class control systems in place, yet if management is absent or lacking, the unethical employee has free reign to create havoc while their peers sit idly by. 

On an individual basis, simple awareness can deter most crime. I was in Paris several years ago, taking the Metro to the Louvre Museum on a Sunday morning. The train was crowded and some teenage kids surrounded and then backed into me as I leaned against my fellow passengers. One young girl kept backing into me with greater force and completely distracted me. I can fully recall thinking “what is her problem?” Suddenly, the train stopped at the next station and she and a companion jumped off. I immediately checked my pants pocket and sure enough, my cash was gone. I was so distracted by this girl backing into me that I failed to notice her companion relieving me of my cash! Had I been just a bit more aware of the circumstances and surroundings, I might have been able to prevent these pickpockets from successfully stealing my money. Yes, true story: Fraud Expert Victim of Pickpockets on Metro.   My wife reminds me of this incident whenever she thinks I might require a dose of humility…

So, I am off to Vegas, fully conscious of the various threats that exist.  I will carry as little cash as possible, keep my identification close and try not to talk to strangers, and I’ll bring my wife along to remind me, as well! Hope to see you out there!

Looking forward to sharing some great information from the conference with you in my next post.



About the Author

Brad Sargent, CPA, CFF