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The Coercer

The Coercer influences, manipulates or bribes another person to act in a desired way to dishonestly gain personal benefits.

This might involve negative incentives such as threats or intimidation, or positive incentives such as favour or monetary kickbacks.

Examples:

  • A criminal organisation threatens public officials to win government contracts.
  • An individual intimidates another person to make them hand over personal or banking information to commit fraud.

Case studies

A man has been charged with allegedly assisting members of the public to fraudulently obtain Australian Government Disaster Recovery Payments that were intended to support victims of the NSW bushfires. Services Australia received a tip-off that the man was allegedly calling the hotline to claim payments on behalf of other people even though they were not adversely affected by the NSW bushfires. He would then receive payments or benefits in return. The man also allegedly threatened potential witnesses to the fraud.

A well-organised child care fraud syndicate allegedly defrauded the Commonwealth Government’s Family Day Care Program of $4 million over a 10 month period. The Australian Federal Police stated that “They had accountants, they had facilitators, and then they had a number of carers underneath which were allegedly caring for kids that were never cared for”. Initially 17 people were arrested but more have been arrested as the case unfolds. A number of parents were also arrested for allegedly handing their children's details over to a sham Family Day Care provider so it could use the information.

Countermeasures

Counter the Coercer using measures that support probity, information security, oversight and deterrence:

Limit and control functionality within systems with user permissions. Assign permissions to users based on specific business needs such as making high-risk functions limited to specialised users.

Separate duties by spreading tasks and associated privileges for a business process among multiple staff. This is very important in areas such as payroll, finance, procurement, contract management and human resources. Strong separation of duties controls are enforced by systems. It is also known as segregation of duties.

Conduct internal or external audits or reviews to evaluate the process, purpose and outcome of activities. Clients, public officials or contractors can take advantage of weaknesses in government programs and systems to commit fraud, act corruptly, and avoid exposure.

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