WINNIPEG, MANITOBA, Canada – After decades of working undercover for the Royal Canadian Mounted Police, the U.S. Drug Enforcement Administration and U.S. Customs Service, crime and risk expert Chris Mathers knows where companies are vulnerable and what it takes to protect them.

“In a world where popular culture tells us that the ends justify the means, crime is all about perception,” he said in a keynote address at the 2014 RIMS Canada Conference. “Young people are bombarded with it all the time, but we are in business, too. So the question is, how vulnerable is your business?”

Mathers, who joined the forensic division of KPMG and was later named president of corporate intelligence, shared his insight into how companies can best guard against “the business of crime, and crime in business.”

During his 20 years dealing with drug traffickers, money launderers and members of organized crime syndicates, Mathers developed what he calls a “10/80/10” theory – 10% of the population is truly bad, 10% is truly good and would never lie (but you will probably never meet), and the other 80% is everywhere in between. Identifying and managing the risks of that 80% requires far more work than employers are currently doing, he said.

Background checks may be the single biggest thing companies can do better, Mathers said. While most businesses perform background checks when an employee is hired, such investigations are seldom conducted during the course of employment. As an example, he cited a case where a company had a director who was serving jail time on the weekends. Due to Canadian privacy laws, however, the case was never reported, so no one knew he had been convicted and imprisoned while on staff. In addition to possible reputation implications, the company could have been exposed to liability if any incidents had occurred at work.

While searching for criminal records of new hires is an excellent start, periodic checks should be implemented for all employees. High levels of drug use in the workplace in industries like manufacturing can be further compounded by the lack of drug testing in Canada, Mathers said. Further, 90% of corporate theft cases he have involved perpetrators who were gamblers.

He suggested that investigations should examine whether employees: have extreme views, use or are addicted to drugs, exhibit signs of alcoholism, are addicted to gambling or participate in illegal gambling, frequent prostitutes, or have relatives or a spouse associated with a criminal organization.

Associating with criminals can be a significant risk factor, regardless of the nature of the relationship. “Prostitutes are criminals and associate with criminals,” Mathers said. “They are around that activity and more likely to engage in it, which may mean they steal a client’s wallet or steal the sensitive intellectual property he’s carrying.” Similarly, an administrative assistant who is married to a member of the Hell’s Angels can introduce far more than just reputation risk if the spouse gets involved in illegal activities like drug smuggling.

Employees within a company can also rationalize criminal behavior. In the case of a man found to have stolen thousands of dollars through expense account fraud, for example, Mathers said the company faced a wrongful dismissal suit from the thief. He was never told that he could not steal, the man said, claiming the practice was an “unofficial bonus program.” Further, he claimed his boss had been doing it for years. “People see that behavior and come to think it is OK because they become accustomed to seeing it,” Mathers said. Maintaining regular internal investigations and ensuring compliance does not just bust wrong-doers, but prevents others from developing, especially as new technology continually emerges to make theft easier to commit and harder to track.

“There are no new crimes – they’re the same crimes, they’re just using new techniques to get them to you,” he said. Companies need to keep updating their monitoring strategies to match.

 

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eric noel canada towards 2030

Photo: Hilary Tuttle

WINNIPEG, MANITOBA, Canada — In keeping with this year’s RIMS Canada Conference theme, “Crossroads: Changing Landscapes,” Eric Noël, senior vice president of Oxford Analytics in North America and initiator of the Canada Towards 2030 Project, presented research and projections on the top trends that will shape the nation’s future.

“Risk managers cannot afford to freeze in the face of uncertainty or change, and the longer a difficult decision is delayed, the higher its cost, so this is a call for action,” Noël said. “Remember that failing to plan is planning to fail.”

Yet projecting out 16 years introduces many ideas and problems that cannot accurately be planned for today. Instead, the planning he encourages is strategic and much broader in scope, examining broad trends, then drilling down into specific political, economic, and environmental implications. For example, Noël said, “Black swans will be the dictator of geopolitical change.” While such events cannot be planned for specifically, it is critical to consider long-term questions of how to engage in global power systems and what areas of primary strength the nation should focus on.

canada towards 2030In other areas, key trends and questions for strategic risk management planning include:

• The most important population trend in Canada is migrations and the resultant political shift. Because of the tremendous shift west and the allocation of votes, a future prime minister could be elected without a single vote from Quebec, bringing dramatically different priorities into office than a candidate who requires the support of the East.

• Aging will not only impact the workforce and demands on the medical system, but will also signal changes in the country’s median income, sovereign debt ranking, and provincial budgets. A larger number of retirees and elderly citizens will increase retirement benefit spending to 13% of Canada’s GDP, and the provinces must start setting aside billions now to pay for that care.

• The first group of less financially-prepared, due to changes in saving practices, will soon be retiring. This will prompt deleveraging and scaling down, whether that means selling their vacation homes or cutting back on lifestyle spending. Further, for those with the financial means, there will be an increase in the number of people with the ability to snowbird. This will have a significant impact on Canada, at the city level, when thousands of residents depart for several months every year.

• Canada’s booming oil industry may be a double-edged sword due to finite resources. The addiction to fuel is becoming an addiction to fiscal incomes for parts of the country as oil royalties surge.

• Political risk is underrated in emerging markets, and emerging markets are quickly becoming divergent markets. By 2030, 15 countries will grow to have a GDP of at least $1 trillion, including many with vastly different cultures and values than current primary markets. BRIC-centric thinking will no longer suffice and current global powers will have to adapt to cooperate with these new players, or they may opt to ally more closely with similar nations instead.

The Canada Towards 2030 Project is an apolitical, independent and non-prescriptive initiative dedicated to creating and sharing long-term research about Canada’s future. According to the group, “Uncertainties should not frighten or paralyze us; they should help us anticipate and prepare. Avoiding or minimizing a risk—as well as finding and maximizing a new opportunity—requires imagination and leadership.”

To that end, Noël and his team aim to use research and non-prescriptive thought leadership on some of the biggest topics shaping the future of the country, including labor, agriculture, governance, oil production and consumption and water supply. “The mission of the C2030 project is to offer a high quality forward-thinking experience to people interested in exploring the future of Canada, increasing their awareness of long-term trends, helping them improve their ability to anticipate change and facilitate the creation of or adaptation to the future they want,” the website explains.

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Failure to register and label a pesticide with the U.S. Environmental Protection Agency (EPA) has netted a penalty of $1.85 million for DuPont, the EPA announced today.

DuPont did not submit reports about the potential adverse effects of an herbicide product called Imprelis, introduced in 2010, the EPA said in a statement. The agency alleges that from October 2010 through June 2011, DuPont distributed or sold Imprelis on 320 occasions with labeling that did not include adequate directions for use, warnings or caution statements to protect non-target plants.

The product was available in 4.5 fl. oz., 1 gallon and 2.5 gallon size containers, and was primarily sold to pest control professionals servicing the lawn, golf, turf and weed control sectors from New Jersey to Wisconsin, the EPA said. Customers who applied the product found that it led to damage and death of some types of coniferous trees, including Norway spruce and white pine.

In June 2011, the EPA started to get complaints from state pesticide agencies regarding evergreen damage related to use of Imprelis. According to the EPA, DuPont reported it received more than 7,000 claims of death or damage to trees. Cases of tree damage and death were widespread in the Midwest, especially Indiana, Illinois, Michigan, Minnesota, Ohio and Wisconsin. Indiana investigated more than 400 cases of tree damage related to Imprelis in 2011, the EPA said.

The agency added that media reports put claims as high as 30,000 by homeowners, landscapers, golf courses and entities with crop damage from the use of the herbicide.

DuPont stopped selling the product in August 2011 and in 2013, the Wilmington, Delaware-based company reached a settlement with representative plaintiffs in a class action lawsuit in federal court in Pennsylvania.

Reuters reported that under the settlement agreement, DuPont will pay property owners to remove and replace damaged trees and other losses. Businesses that applied the herbicide to the property of others will also be compensated for customer site visits and other expenses.

The settlement provides up to $7 million in attorney’s fees and also costs for plaintiffs’ lawyers, Reuters said.

According to the EPA:

Pesticide registrants such as DuPont who violate FIFRA are subject to maximum civil penalty of $7,500 for each offense per FIFRA section 14(a)(1), as amended. In determining an appropriate civil penalty amount, FIFRA section 14(a)(4) requires that EPA consider the appropriateness of such penalty to the size of the violator’s business, the effect of the penalty on the violator’s ability to continue in business, and the gravity of the violation.

 

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From robbing their own store, to faked deaths, to slip-and-fall claims, to more gruesome crimes, scammers have gone to great lengths to collect insurance. In the U.S. this amounts to about $40 billion per year, according to the Federal Bureau of Investigation—at a cost of $400 to $700 per year, per family, in increased premiums.

According to the U.S. Department of Financial Services, there were 377 arrests made for fraud in 2011; 356 in 2012 and the number dropped to 215 arrests in 2013.

Check out some of the more devious and intricate schemes here:

Graphic by Eamonn Freeman http://www.easylifecover.ie/

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