Preventing and Detecting Check Tempering Frauds
Question
Which are check tempering frauds in which an employee prepares a fraudulent check and submits it usually along with legitimate checks to an authorized maker who signs it without a proper review?
Answers
Explanations
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A. B. C. D.D
The correct answer is C. Payable check scheme.
Payable check scheme is a type of check tampering fraud in which an employee prepares a fraudulent check and submits it, usually along with legitimate checks, to an authorized maker who signs it without proper review. This type of fraud is also known as forged maker scheme or forged drawer scheme.
In this scheme, the employee alters the payee on the check, the amount, or both, to divert funds to themselves or to another person. The employee may also create a fictitious vendor or supplier and submit checks payable to them.
The fraudulent check is then submitted to the authorized maker, who signs it without realizing that it is fraudulent. This may happen because the authorized maker trusts the employee, does not review the supporting documentation properly, or is simply too busy to review all checks carefully.
The other options listed in the question are not correct answers:
Endorse check scheme refers to a type of check tampering in which an employee alters the endorsement on a check, usually by adding their own name, and then deposits or cashes the check.
Legitimate check scheme is not a recognized type of fraud.
Concealed check scheme refers to a type of fraud in which an employee conceals the existence of a check, either by destroying it or by intercepting it before it reaches the intended recipient.
