Question

Common cash fraud techniques: Kiting: deliberate floating of fund between two or more bank accounts to cover the stolen from another account. The employee transfer money from one bank account to another account right before year-end. Lapping: using

Answer 1

Answer: Fraud is the use of misrepresentation or deception to receive money or an item of value. Kiting and Lapping are common techniques used to defraud a second party of cash.

Explanation:

Kiting: a method of defrauding banks involving drawing a check against an account which does not have any, or adequate amount. For instance, paying a check from Account A into account B and then drawing against the account from an account C in another bank, when there is actually no/insufficient money in account A, which should be paying the initial check.

Lapping: a method of defrauding an employer by modifying sales records to hide a theft. It typically involves the use of subsequent cash payments to cover the missing cash and this can be continuous unless there is a segregation of duties between employees in charge of cash collection and recording.