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The spectre of fraud and corruption can hang over any business, irrespective of industry or jurisdiction. Though companies have made great strides to address the risks, COVID-19 has changed the paradigm. The mass migration to remote working in response to the pandemic means more employees are operating with reduced oversight. Now more than ever, companies must implement strategies to prevent fraud to the extent possible. Regular training to help employees recognise fraud should be carried out, as they form the vanguard when it comes to raising red flags. Anonymous reporting systems also encourage staff to come forward with information. If fraud is detected, a thorough investigation should follow, and it may be necessary to notify and cooperate with authorities.

UNITED STATES

Kobre & Kim LLP

“The Biden administration is expected to take a more aggressive stance against financial and corporate fraud, consistent with the Obama administration’s approach. While prosecutions of corporate executives increased under Trump, many view enforcement against corporations and banks themselves to have eased – something that is expected to be reversed under Attorney General Merrick Garland. Relatedly, this more assertive approach to fraud and corruption is expected to include a focus on pandemic-related fraud.”

BRAZIL

BDO

“The perception is that, due to the end of Operation Car Wash, there has been a notable decrease in the level of fraud, bribery and corruption in Brazil. The investigations related to Operation Car Wash, as well as other federal police-related operations, are ongoing and new phases are constantly arising. Moreover, the Organization for Economic Co-operation and Development (OECD) has created a permanent monitoring group focused on corruption in Brazil. Also, due to the pandemic and the rising public need to make healthcare purchases, there have been numerous investigations related to fraud and overpriced costs for respirators and pandemic-related materials.”

UNITED KINGDOM

Corporate Research and Investigations Limited

“The COVID-19 pandemic has created increased opportunities for fraud worldwide. The UK is not immune, unfortunately, and such a disruptive event as the pandemic increases the likelihood that normal safeguards and risk management controls can be bypassed and subverted. There has been an increase in reported fraud and corruption cases over the past year. A survey of fraud experts by the Association of Certified Fraud Examiners (ACFE) in August 2020 showed that 77 percent were seeing an increase in fraud. Perhaps not surprisingly, cyber fraud is the fastest-growing problem area, but there has also been an uptick in unemployment fraud”

IRELAND

Grant Thornton

“The terms ‘economic crime’, ‘fraud’, ‘corporate crime’ and ‘white-collar crime’ are used interchangeably. Generally, these terms fall into the same category – illegal activities – and can include asset misappropriation, bribery and corruption, corporate and personal fraud, and money laundering. Findings from a 2019 economic crime survey published by Chartered Accountants Ireland highlight that the level of reported economic crime and fraud in Ireland has increased. Among the reasons for this is the legal requirement to report suspicions of fraud.”

PORTUGAL

Morais Leitão, Galvão Teles, Soares da Silva & Associados

“In recent years, there has been steady growth, both in the number of cases and in their media exposure, of corruption-related investigations and related criminal infractions, mainly involving the political and public sector and the sports sector in Portugal. The number of corruption investigations related to international trade or in the private sector has been negligible. However, the aftermath of economic crises, such as COVID-19, can lead the authorities to pursue mega-investigations which lack credible evidence and push forward cases that simply do not hold up in court, which leads, wrongly, to the notion that in Portugal the punishment for corruption is still too soft, which is far from the case.”

RUSSIAN FEDERATION

BDO

“We have not seen notable rise in the level of corporate fraud, bribery and corruption uncovered in Russia. The related risks remain rather high compared to many other countries.”

INDIA

BDO

“In India, corporate frauds have a long and chequered history. In addition to the traditional procurement and third-party frauds which remain a key concern, there has been over a 100 percent increase in cyber crimes in the current COVID-19 scenario. A paramount shift and disruption to the way business is conducted has led to a plethora of vulnerabilities for fraudsters to exploit.”

CHINA & HONG KONG

Alvarez & Marsal Disputes and Investigations Limited

“We are seeing previously concealed fraud, bribery and corruption issues rising to the surface as companies continue to recover from the effects of the pandemic and we expect this trend to continue as we enter the financial reporting season. Authorities in mainland China and Hong Kong have both taken a firm stance on the fight against corruption in recent times, in the process revealing many bribery and corruption cases. We foresee this stance being maintained, especially recognising the increased risks brought about by the pandemic, with cases being revealed over the next few years, which is the typical length of time it takes for these fraudulent issues to come to light.”

SAUDI ARABIA

BDO

“Saudi Arabia has instituted numerous measures over the last decade to combat fraud and corruption, as a signatory to the United Nations Convention against Corruption (UNCAC) and the G-20 anti-corruption action plans. This has included the creation of the National Anti-Corruption Commission, which has jurisdiction over the public sector and all companies owned 25 percent or more by the state. The Commission is an independent body which reports directly to the King. Further, the country has also seen improvements in its ranking in the Transparency International Corruption Perceptions Index over the last several years.”

UNITED ARAB EMIRATES

Corporate Research and Investigations Limited

“The United Arab Emirates (UAE) remains the least corrupt country in the Middle East and North Africa region. It was perhaps fitting that the United Nations (UN) held its anti-corruption conference in the UAE just over a year ago. At the conference, delegates drafted anti-corruption resolutions and discussed asset recovery, international cooperation, and other topics in preparation for an upcoming special session of the UN General Assembly against corruption.”

SOUTH AFRICA

KPMG Services (Pty) Limited, South Africa

“The impact of COVID-19 has certainly played a role in the fraud and corruption trends we have seen over the past year. The drive was, and still is, on providing healthcare and gearing the country to battle the pandemic, with greater emphasis placed on the procurement of personal protective equipment (PPE) and related services by government and private companies. The government spent billions of rand in the past year on PPE procurement. Naturally, opportunistic companies and individuals wanted a piece of the pie. Currently, there are many investigations underway by the South African law enforcement agencies in relation to PPE procurement fraud.”

CONTRIBUTORS

Alvarez & Marsal Disputes and Investigations Limited

BDO

Corporate Research and Investigations Limited

Grant Thornton

Kobre & Kim LLP

KPMG Services (Pty) Limited, South Africa

Morais Leitão, Galvão Teles, Soares da Silva & Associados