control, and governance
GENERAL COUNSEL GETS CREATIVE
According to information filed by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, the former general counsel created shell companies for the purpose of stealing money through false invoices he created for those companies. The information alleges that he created fraudulent invoices while coordinating the defense of medical malpractice claims against the hospital as well as submitting false invoices for work related to the community and government affairs function of the hospital. The U.S. Attorney’s Office said the former general counsel used the money to live a “lavish lifestyle, purchasing luxury items.”
Internal auditors should remain vigilant for typical red flags, such as employees living beyond their means by purchasing real estate, high-end automobiles, and other big-ticket luxury items. Auditors also need to be aware of fraud risks like inadequate segregation of duties and lack of adequate monitoring controls.
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