Global white-collar crime: typical perpetrator is male, middle-aged and has been with the company for a long time

Global KPMG study analyzes typical perpetrator characteristics and internal weaknesses in over 250 cases of white-collar crime: 

• Typical perpetrator is male (81 percent) and between 36 and 55 years old, majority does not act alone
• Main types of fraud: embezzlement, manipulated procurements and forged documents
• Weak controls are the main cause of fraud, whistleblowers remain the most important source of detection

For the global study "The enemy within - profiling the corporate fraudster", KPMG International examined over 660 individual offender profiles based on 256 real cases of white-collar fraud from around the world. The analysis shows that typical white-collar criminals are by no means outsiders, but in many cases valued employees who have been with the company for many years.

Over 80 percent of perpetrators are male, the majority between 36 and 55 years old. Two thirds have been employed by the company for more than six years. Personal problems rarely play a role in their offenses; financial greed or opportunism ("Because I can") are much more common motivators. More than half of the cases involved team misconduct. In most cases, two to five people were involved - often from central functions such as purchasing, finance or management. In four out of ten cases, the network consisted exclusively of employees of the company concerned. The people involved were exposed primarily through email analyses, interviews and financial data. 

The most common form of fraud is the misappropriation of assets - usually through embezzlement or manipulated procurement (52%). 29 percent of cases involve forged documents, slightly fewer (24 percent) involve theft. In one in five cases, financial reporting was manipulated, often through premature or fictitious booking of turnover. The majority of financial losses were less than 200,000 US dollars. However, in cross-border cases in particular (13 percent of the total), the losses amounted to over 5 million US dollars. In addition to the direct financial impact, the companies affected suffer from a loss of trust and reputational damage for years to come.

In 76 percent of cases, weak internal controls made the fraud possible. More than half of the companies affected had no anti-fraud measures in place. And where controls were in place, they often failed: ethical guidelines or internal audits often remained ineffective. Whistleblowers, on the other hand, played the central role in detecting fraud: 45 percent of fraud cases came to light through whistleblowers or informal tips - far ahead of technical testing procedures. Particularly serious: in half of the cases with losses of more than one million US dollars, the perpetrators had unrestricted decision-making powers. The most common facilitating environmental factors were a culture of fear, isolated working and an aggressive working environment.

The results of the study clearly show that companies should not be lulled into a false sense of security by loyalty, length of service or hierarchical position. Prevention must be systematic - across all levels. Clear internal controls with defined responsibilities, a practiced ethics culture with a secure whistleblowing system and the targeted use of data-based analysis methods are crucial. Organizations should regularly review, document and question sensitive functions and external business partners in particular. Technological developments - for example in the area of cyber risks or AI - should also be anticipated at an early stage and integrated into the company's own defense strategy.

Further information on the study can be found on our topic page.

The study provides an in-depth picture of at least 669 fraudsters and the crimes they have committed. It is based on 256 real fraud cases that have been investigated by KPMG country offices on behalf of affected organizations over the last five years and evaluated on the basis of questionnaires, detailed case analyses and direct interviews with the perpetrators.

Clemens Reisbeck
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com