// Fraud schemes
Corruption
Conflict of interest — purchasing
An employee with an undisclosed financial or personal interest in a vendor uses their position to benefit that vendor: steering awards, approving inflated or unneeded purchases, or avoiding competitive procurement.
S21Conflict of interest — sales
An employee with a hidden interest in a customer sells to it below normal price, grants excessive discounts, credits, or refunds, writes off its balances, or extends unusual credit terms.
S22Bribery — invoice kickbacks (including illegal gratuities)
A vendor pays an employee to approve inflated or fictitious invoices or to steer business to the vendor. In the gratuity variant, a payment or gift is given after an…
S23Bribery — bid rigging and procurement manipulation
An employee manipulates the procurement process for a favored vendor, or vendors coordinate their bids among themselves. Methods include tailoring specifications, leaking competing bids, splitting purchases to avoid bid thresholds,…