Procurement fraud schemes

Shards and Bribes

Bribery and kickbacks are the most serious business crimes and give rise to other fraud and abuse, such as bid rigging, fraud, higher costs and lower quality, as parties seek to recover the cost of bribes and exploit the corrupt relationship.

corrupt payments

The bribe need not be in money or cash, and often is not. Any benefit given or received with the intent to corruptly influence the recipient may be a bribe. It can be any “thing of value” to influence an official act. “Things of Value” that have been given and received as fragments include:

Experience giveaways, free travel, and luxury entertainment.

“Loans” repaid or not.

Use of credit cards.

Sexual favors (hiring prostitutes, etc.)

Overpaying for purchases, for example, paying Rs 20,00,000 for a car worth Rs 10,00,000.

Money

Fees and commissions, even if the recipient allegedly provided services to the payer.

Hidden interests in commercial transactions.

Often the payments follow the general sequence outlined above, with the amount and form of the payments becoming more significant and incriminating as the scheme progresses.

corrupting influence

Corrupt influence in the contracting and procurement process is often reflected, among other things, in:

Qualify an unqualified or untested company to bid or be a supplier.

Inadequate or non-competitive contract awards

Paying too much for goods or services

Buying too much of an item or buying inappropriate items

Continued acceptance of low-quality or nonconforming goods or services

As corruption continues, abuses often escalate into fraud, such as bogus invoices, with the parties conspiring to snoop on the proceeds. Ultimately, the excesses of the scheme lead to detection, as mounting evidence of favorable treatment and fraud, and the conspicuous expenses of the conspiracy call attention to their behavior.