June 14, 2018 (with files from the ACFE ) -Individuals who are engaged in occupational fraud schemes often exhibit certain behavioral traits or warning signs associated with their illegal activity. In the ACFE’s 2018 Report to the Nations, survey respondents were presented with a list of 17 common behavioral red flags and asked to identify the red flags that had been displayed by the perpetrator before the fraud was discovered.
These six behavioral red flags have been the most common in every one of our studies dating back to 2008, with a remarkably consistent distribution:
- Living beyond one’s means
- Financial difficulties
- Unusually close association with a vendor or customer
- Excessive control issues or unwillingness to share duties
- Recent divorce or family problems
- A general “wheeler-dealer” attitude involving shrewd or unscrupulous behavior
