Procurement Fraud in the IT Sector

TopShelf writes "IT staff usually enjoy unrivaled access to the deepest details of an organization's structure, and all too often, some submit to the urge to use that knowledge for nefarious purposes. Baseline Magazine explores how how Tech Insiders Cheat Their Employers, with examples of executives creating their own vendors to which fat contracts are awarded. Perhaps the most galling case involves a director in the New York City Chief Medical Examiner's office who is accused of scamming FEMA in the wake of the September 11, 2001 terrorist attacks."

Comments

Re:Encourage loyalty

[kfg]

It's too bad that most companies are only in business to line the pockets of the top execs this quarter, and damn the next financial period; we'll figure that out later.

It goes a bit deeper than that I'm afraid.

The modern model for business structure requires hiring and treating people as interchangable parts in a machine. This has nothing to do with short term greed, but is rather aimed at the sustainability of the business itself.

This is one of the reasons that new, small businesses can out perform older, larger businesses. They tend to be more reliant on high performing and essentially irreplacable personel. Say; the founder.

One of the reasons that new, small businesses tend to fail is because. . .they tend to be more reliant on high performing and essentially irreplacable personel.

So both short term greed and long term surviability can lead to an air of people not mattering. The opposite of love is not hate; it is indifference. In the average company they aren't actually out to get you, they simply don't give a fuck about you.

KFG

Re:Oh Crap!

[Zeinfeld]

Maybe I shouldn't have named my fake vendor company Enron...

That reminds me of the recent case where a guy was caught trying to pass a counterfeit billion dollar bill. Most criminals avoid detection by trying to fly under the radar with a scam so low level it is undetected. This guy was caught because the attack was so ridiculously visible - which reminds me I blogged on this and forgot to actually publish the post, must do that.

These frauds are all pretty standard ones that any good auditor should be able to spot. Placing orders with a cutout company is an old ruse. What is suprising is the way that an exec of a public company would put it all on the line for what was actually chickenfeed compared to his salary and $900K stock options. I did that rant on my blog already though

The only part of this that is Internet specific is the attempt to shut down the whistle blowers with court orders in the fourth case. Again it happend in Enrons home base of Texas.

The blogosphere recently uncovered a series of frauds committed by Duke Cunningham and a number of other congressmen. The mainstream media has yet to tell the public anything close to the whole tale which is still being investigated but has already cased the dismissal of Porter-Goss as head of the CIA, the uncovering of a prostitutes and poker game held by lobbyists at the Watergate hotel and a peculiar series of limosine contracts. The bloggers are also currently getting their teeth into what appears to be a bipartisan scam where a legislator buys land up cheap, gets an earmark appropriation passed to build on or close to it that massively increases the value of the land and then sells dear.

In the UK the magazine Private Eye has traditionally been the whistle blower. The US has never had a true equivalent. Private Eye has dramatically reduced the amount of graft in UK public life by bringing to light many schemes that would otherwise have continued for decades.

Perhaps the Internet can be the Private Eye for the US.