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Focus on Counterfeit and Pirated Goods

Recent trade talks with the Chinese government have put the issues of counterfeit and pirated goods back in the news.  Last year, China launched a six month campaign focused on enforcement of intellectual property rights but U.S. officials want to establish benchmarks to better measure progress and enforcement.  It seems that much of this attention is focused on technology products but retail products such as handbags, apparel, and DVD’s are still very much part of the mix.  Here is an article from the Business Standard and an article from Market Watch on the trade talks and the underlying issues.

Meanwhile, back in the U.S., several high profile law enforcement raids show the goods have a steady demand from the buying public here.  This article highlights a raid in Las Vegas that netted $350,000 in countfeit goods while this article reports a Los Angeles raid that seized over $4 million in counterfeit goods.

Economic Crime Goes Up in Recession?

In the October issue of Security Management magazine, there is yet another article, “Corporate Crime in Hard Times,” that tries to tie an increase in business crime to the economic downturn despite decreases in violence and property crime over the same period.  As is the case with most of these types of articles, they rely on whether crime is occurring during the period (e.g. “35 percent of American companies said they had been the victim of at least one significant economic crime from August 2008 through July 2009”) and perceptions of executives (e.g. “..the majority of U.S. executives (53 percent), perceived that the most likely reason for their increased risk of fraud could be attributed to increased pressure during these difficult economic conditions”).

Everytime we go into an economic downturn, I know to expect calls from newspaper reporters and TV producers wanting me to say that there will be more theft from both shoplifters and employees due to increased financial need.  Of course, I refuse because there is no way that we can know whether this occurs since we don’t have measurements to this very issue.  As for theory, there are some research studies that suggest employees are less likely to participate in workplace deviance when it is harder to replace their job such as is the case when unemployment is higher.

Still, the article does make some excellent points about the importance of employee awareness programs and internal hotlines in combating internal fraud.  Also, there are quite a few references to the PriceWaterhouseCooper’s Global Economic Crime Survey.

HR and Surveillance Programs

In reading a recent issue of HR Magazine, I took note of an article on the role of the Human Resource department when it comes to video surveillance programs in the workplace.  This article addresses the employment law ramifications of a video program and the special circumstances of video surveillance in a union environment.  Some states – California, Connecticut, Delaware, and Massachusetts – have requirments to disclose workplace monitoring or risk a potential invasion of privacy action.

The article can be viewed here.  Another resource to check out is the 2007 Electronic Monitoring & Surveillance Survey conducted by the American Management Association.

Criminal Records – CORI Reform in Massachusetts

Masschusetts recently enacted a signficant revision affecting the access, use, and inquiry into an applicant’s criminal history.  A good summary of the act by the law firm Ropes & Gray can be found here and on the official Commonwealth of Massachusetts site which can be found here

Some of the changes include making it unlawful for an employer to ask an applicant about recent felony and misdemeanor convictions as part of the initial written application form.  Additionally, for most felony convictions information will be provided only for the past 10 years and misdemeanor convictions will be reported for five years after final disposition.

There are also new requirements for providing an applicant with a copy of an criminal records information that might be used in an adverse employment decision prior to questioning the applicant concerning it or making an adverse decision on the basis of it.  There are also new requirements to maintain a written CORI policy and to provide applicants with a copy of the policy.

ACFE Fraud Survey – Importance of Training Programs

According to the recent fraud survey conducted by Association of Certified Fraud Examiners (ACFE), the most effective fraud prevention tactics were “non-accounting controls” such as hotlines and training and support programs for both employees and managers.  The human factor also played a significant role in the discover of fraud.  The most common method of catching a fraudster is a tip-off.  In fact, tips expose fraud three times as often as do management reviews, internal audits, and account reconciliations.

For more information, click here.