• A notable example of how failing to verify credentials can lead to fraud occurred in South Australia in 2019. Veronica Theriault secured a Chief Information Officer role with a $270,000 annual salary by falsifying her CV, providing fraudulent references, and even using a supermodel’s photo on LinkedIn. During her brief tenure, she misappropriated $54,000, including securing an unqualified contract for her brother.

• This case underscores the necessity of not just conducting background checks but also scrutinizing the results for inconsistencies or warning signs.

ACFE’s 2024 report revealed that 84% of fraudsters had no documented fraud-related criminal history. This does not mean they are beyond scrutiny. Common background check oversights include:

• Failing to verify professional qualifications or employment history.

• Ignoring references or accepting them at face value without cross-verification.

• Dismissing minor red flags, such as gaps in employment or discrepancies in credentials.

Shockingly, in 16% of fraud cases where a background check was conducted, warning signs were ignored, resulting in fraudsters being hired anyway.

Organizations must adopt a tailored approach to background checks, focusing on high-risk roles such as senior executives, finance, IT system administrators, and procurement. A robust screening process should include:

1. Verification of Professional Credentials: Independently confirm degrees, certifications, and employment history.

2. Criminal Background Checks: Ensure the candidate has no history of fraudulent or criminal behavior.

3. Public Records Review: Search for litigation, bankruptcy filings, or media mentions that could indicate prior misconduct.

4. Reference Checks: Speak to former colleagues or supervisors to gain authentic insights into the candidate’s character and work ethic.

Implementing background checks is just one part of the equation; acting on the results is equally crucial. Organizations must:

• Establish clear protocols to investigate and act on red flags.

• Foster a culture of diligence and accountability during hiring.

• Continuously review and update background screening policies to adapt to evolving risks.

Fraud prevention begins with vigilance in the hiring process. By leveraging comprehensive background checks and acting decisively on the findings, organizations can minimize fraud risks and protect their assets, reputation, and stakeholders. As the adage goes, an ounce of prevention is worth a pound of cure—a lesson every organization should embrace to safeguard its future.