South American Mining Company Develops Stronger Fraud Prevention Procedures After Discovering $18 Million Vendor Fraud

Background and Challenges

A mining company in South America discovered vendor fraud schemes perpetrated by employees, resulting in a significant financial loss for the company. 

Approach

BDO assisted in an internal investigation for the client to determine the existence of any additional schemes, as well as determine if there were any previously unidentified employees or vendors involved. BDO applied a multi-faceted investigative approach which included imaging over 90 computers, performing tailored data analytics, reviewing public records and employee email correspondence, and conducting interviews with key personnel.

Client Impact 

As a result of these investigative efforts, BDO estimated a loss of approximately $18 million to vendor fraud. The company terminated nearly 40 employees and terminated relationships with approximately 60 vendors. BDO also helped the company significantly strengthen its their internal controls, processes, and procedures based on knowledge gained during the engagement.