Six Common Fraud

Six Common Fraud Schemes & How to Identify Them

Everybody in this world is busy minting money. Some do it legally while those who want to make it quick do not hesitate to do so illegally even. Due to such people, many financial schemes come to the fore that promise one of multiplying the invested money in a short period, and people fall prey to these schemes very easily like the Ashfaq Siddique headed Leverage and Empty Trip scheme. One of the members of this scheme invested her life earnings into the scheme and got nothing even after three years.

Types of Frauds

1. Shell Company Schemes:

This type aims at extracting money from a company’s pocket for a service or product it never received. The money lands up in the pocket of the company’s employee who created it. One of such schemes was the City Time Scheme that involved three people responsible for creating New York’s automated Payroll System. Before being deposited in the US in an account he controlled, one of the co-defendants paid kickbacks in India.

2. Asset Misappropriation:

A number of schemes where an employee steals the assets of the company are categorized as Asset Misappropriation. These can include

a.     Check Forgery

b.     Check Kiting

c.      Check Tampering

d.     Inventory Theft

e.     Cash Theft

These are just a few to mention. The list could go on endlessly.

3. Vendor Fraud:

Vendor Fraud Schemes are carried out by an employee of the company alone or in collaboration with some vendor.

 4. Accounting Fraud:

This kind of fraud occurs when an employee uses the company’s account to commit a theft or steals from the company’s account.

5. Payroll Fraud:

Theft committed using the payroll of a business is termed as Payroll Fraud.

6. Travel Fraud:

Travel fraud occurs when you book a cab or a flight, and when the appointment is to be materialized you just don’t find any signs of the cab, or in case of flights you don’t find your name anywhere in the list. Some will also offer you to invest their money in the travel business and in one year that would be double or triple. The Leverage Empty Trip Scheme also comes under the same category. Ashfaq Siddiqui led Empty Trip looted a lot from the residents of the United Kingdom with people investing £1500 to £25,000 even. However, this money never returned to them and went into the coffers of Ashfaq Siddiqui and his fellow beings.

Identifying and Preventing Frauds

As there are different types of fraudulent schemes, so are the ways to avoid the results of such schemes. However, before prevention comes to the identification of these frauds. Fraud identification is a four step-process involving primary classification, secondary classification, inherent scheme, and fraud setup. Detecting fraud can be different according to its type, but usually involves a two-step process i.e. fraud data analytics and fraud audit procedures.

Prevention of Frauds is a must. People who earn their money by working day and night sometimes commit acts like investing their money in fraudulent schemes – sometimes out of need and sometimes out of greed. It is this aspect of need that people like Ashfaq Siddiqui feed on. Following is a list of suggestions that one can follow to bypass the cunning of such people:

1. Do not use Bank Transfer to make the payments:

Banks are of the least help if you do so. The fraudster might close his account, or simply the account might be in another country altogether. If any scheme insists on getting the payment by a Bank Transfer alone, better leave it.

2. Pay by Credit Card:

Credit Card Transactions are the best means of payment as the players like Visa, Mastercard, and American Express specify protection for their customers. Many countries follow acts like the Fair Credit Billing Act which allows for the recovery of a customer’s money if paid through a credit card.

3. Accreditation Logos:

In case you find out logos on the company’s website, google them. Most of the time, a valid company will list out its registration number, and official website address on its website. Compare the web address you have with the one specified on the website. Also, check for the name of the company. This is many times spelled by changing just a single letter in the name such as instead of JW Marriott it may be spelled, JW Marriott. I bet even you did not notice the difference.

4. Last but the best:

Google the company name with a SCAM beside it and you will know whether you have been taken for a ride or not.


People want to be rich. To do so they adopt unfair means like Ashfaq Siddiqui. Not only did Ashfaq Siddiqui loot people of the money but also broke the trust they had in his venture when they invested the money. These scams and Alleged frauds can only be overcome if we pledge to stay secure by being alert all the time. A little mistake on our part and these people will seize the opportunity to deprive you of your money. Be alert, be safe.

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