Are You a Scammer? Cheating on Corporate Expense Reports

Lingerie, Cattle and Psychic Hotlines -- Oh My!

"When you have a downturn in the economy, you tend to see more fraudulent use of company credit cards," said John Verver, a vice president of ACL Services, an audit technology firm in Vancouver, British Columbia, that serves a majority of Fortune 500 companies, the Big Four public accounting firms and hundreds of government agencies.

What's the tip-off to auditors that you're boldly going where no corporate account has gone before? Charges to stores like Victoria's Secret, Home Depot, Best Buy or establishments that have nothing to do with your line of work, such as salons, spas, even stockyards.

"One customer of ours found that a manager who had a ranch in a remote location was buying steer at a cattle auction," Verver said.

Another audit software firm I spoke to, Oversight Systems in Atlanta, was so incredulous at the gall of some of the corporate scams it uncovered last year that it created the First Annual Fraudies Awards.

Among the winners: The employees of a single company who collectively racked up more than $100,000 in iTunes downloads on their corporate credit cards.

Also: The employee who bought $4,000 worth of goodies from Victoria's Secret on his company credit card. Not only did his employer catch him in the act, the wife he was cheating on did too. And finally, the employee who tried to stick her company with $3,400 worth of calls to a psychic hotline. As Patrick Taylor, CEO of Oversight Systems, said, "The real humor in it is that the psychic didn't warn her that she was going to get caught."

Double Dippers, Short Sellers and Resellers

Another common expense account scammer is the double dipper who tries to bill the company twice for the same purchase. "So you've got maybe three employees, and they all go to lunch together or they all they go to a conference together and they all claim the same amount," ACL Services' Verver said.

Either that, or they claim a restaurant bill both with a receipt they turn in as part of their expense report and via the charge on their corporate credit card statement.

Yet another version of the double dip is having your spouse meet you at the gas station when you're filling up the company car and filling up their tank on the company card too, Oversight Systems' Taylor said.

Then there are the short sellers who inflate purchases of company inventory so they can pocket a percentage of the cash outlay themselves. At the company my consultant pal was hired to help, one employee was ordering supplies from a friend's firm, with the agreement that only 75 percent of the inventory would arrive so that the guy ordering the supplies could pocket 25 percent of the payment issued by his company.

But my favorite expense account scam (not because I condone any of this, but because I can't believe the guy had the moxie to dream it up and then go through with it) is the Fraudie winner for best foreign travel scam.

According to Oversight Systems, this employee booked himself an international plane ticket for a business trip using his own credit card, submitted a copy of the ticket for reimbursement from his company, swapped the ticket for an airline credit, sold the airline credit on eBay and stayed home from work the week he was supposed to be traveling.

His downfall? "There were never any expenses from the rest of the trip," Taylor said. No hotels, no rental car, no meals.

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