In this era of technology, crime has also changed radically. There is a lot of
fraud, mainly targeting commercial banks (Alia, Hussinb, & Abedc, 2019). This is
something these institutions need to look at and invest in secure systems. They also
need to ensure that all information is encrypted and early detection system is in
Thesis Statement: To curb online fraud, organizations need to have secure systems
and monitor all the activities in their websites.
A Brief Overview of the Incident
A group of young criminals operating from Russia hacked into the systems
of Citibank and made illegal money transfers to different bank accounts across the
world (The Federal Bureau of Investigation, 2014). Their target was corporate
accounts since these customers had accounts in different banks across the world.
As such, by targeting the bank’s cash management system, they could have easily
moved the money across several destinations in the world without being easily
detected. It is only after some clients found that money was missing in their
accounts that the bank took action. The hackers had illegally accessed the systems
of the bank. Most the money was transferred outside the United States and the only
destination in the United States where this money was illegally transferred to was
St Francisco. Up to $10 million was illegally transferred. After the bank realized
that money is missing from some of the accounts, it contacted officers from the
Federal Bureau of Investigations (FBI) to assist it. FBI worked with authorities
from Russia and they successfully prevented more money from being lost. Some
accounts were frozen and this prevented the hackers from withdrawing the illegally
The Fraud-Related Clues That Were Missed
The bank did not have tough measures back then to detect and deal with
cyber security. That is why it was hard for it to know when any illegal access and
transfer of cash had happened.
Besides, it took the bank time to realize that money was being illegally
transferred from the accounts of some of its cuprite clients. This is a very good
clue but the bank missed it. It only after the clients realized that money was
missing that the bank started the process of investigating the incident
How the Fraud Was Detected
The fraud was detected after some corporate clients started to complain that
money was missing from their accounts. They had not done any transfer yet there
were indications that their money was being transferred to different destinations
across the globe. That is how the cash management systems was investigated and
accounts which received this illegal money got frozen.
Using Theory and Research from Chapter 8
It is no secret that online fraud is a major concern for banks, and it is also no
secret that it is difficult to prevent. While one completely eliminate the possibility
of fraud, there are some steps that the bank could have taken to make their
customers feel more secure and reduce their risk.
One of the most important things to do when preventing online fraud is to
make sure that the website is secure (Turban, Pollard, & Wood, 2018). This means
using encryption and making sure that any information the system is encrypted as
well. As such, it would have been hard for the hackers to access the system.
The bank needed to have a good fraud detection system in place so that if
someone does try to commit fraud against them, they can catch it before too much
damage has been done (Eneji, Angib, Ibe, & Ekwegh, 2019). That way, such huge
amounts of money could not have been illegally transferred.
Online fraud has become a major concern for many organizations. Due to
the risk this fraud poses, it is good for these organizations to invest in secure
systems. Also, they need to constantly monitor what is happening in these systems
so that they can detect fraud early enough.
In conclusion, technology has dramatically changed the world. However,
this has come with a fair share of challenges. Online fraud is on the rise, which has
made firms and individuals lose a lot of money, for example, the hacking of
Citibank by young Russian hackers cost the bank millions of dollars as well
damaging its reputation. In a bid to deal with this issue, firms need to enhance the
security of their systems. In addition, they need competent IT departments which
can install a secure systems as well as constantly monitor these systems.
Alia, M. A., Hussinb, N., & Abedc, I. A. (2019). E-banking fraud detection: A
short review. International Journal of Innovation, Creativity and
Change, 6(8), 67-87.
Eneji, S. E., Angib, M. U., Ibe, W. E., & Ekwegh, K. C. (2019). A study of
electronic banking fraud,fraud detection and control. International Journal
of Innovative Science and Research Technology, 4(3) , 708-711.
The Federal Bureau of Investigation. (2014, January 31). A byte out of history
$10 million hack, 1994-style. The Federal Bureau of Investigation:
Turban, E., Pollard, C., & Wood, G. (2018). Information technology for
management on-demand strategies for performance, growth and
sustainability. John Wiley & Sons, Inc.
A brief overview of what happened in the organizational example.
The fraud at Theranos, a Silicon Valley biotech startup, involved the creation of a faulty
blood-testing device that produced inaccurate results. The company raised over $700 million
from investors based on false claims about the device’s capabilities. As a result, the company’s
founder, Elizabeth Holmes, and her former partner, Sunny Balwani, were indicted for numerous
counts of wire forgery and a scheme to commit wire fraud (Department of Justice, 2018).
Outline what fraud-related clues were missed.
Several red flags could have alerted investors and regulators to the fraudulent activity,
including the fact that the company was highly secretive about its technology and did not subject
its device to third-party testing or peer review. There were also concerns raised by former
employees about the device’s accuracy, as well as discrepancies in the company’s financial
statements. However, these warning signs were not adequately investigated or addressed by the
company’s board or investors (Huang, 2019).
Explain how the fraud was detected.
The fraud was ultimately uncovered by investigative journalism, which revealed the
discrepancies in the company’s claims and brought attention to the concerns raised by former
employees. Regulators subsequently launched an investigation, and the company’s executives
were charged with fraud (Carreyrou, 2018).
What should the organization have done to prevent the fraud from occurring
According to Turban, Pollard, and Wood’s (2018) textbook “Information Technology for
Management,” there are several actions that an organization could have taken to prevent fraud,
based on the theory and research presented in Chapter 8. These include strengthening internal
controls, establishing an ethical culture, conducting regular risk assessments, using technology to
prevent and detect fraud, and ensuring transparency and accountability to stakeholders.
To prevent fraud, the organization should have implemented strong internal controls,
including proper record-keeping, separation of duties, and oversight of key personnel (Turban et
al., 2018). This would have made it more challenging to manipulate financial data and create
false reports. Additionally, establishing an ethical culture with clear codes of conduct and
policies could have encouraged employees to act in the company’s and its stakeholders’ best
interests, as well as report any suspected fraudulent activity (Turban et al., 2018).
Regular risk assessments would have helped the organization identify potential areas of
fraud and implement appropriate controls to mitigate those risks (Turban et al., 2018). In
addition, utilizing technology, such as data analytics and monitoring tools, could have prevented
and detected fraud by alerting the organization to suspicious transactions or activities (Turban et
al., 2018). Finally, ensuring transparency and accountability to stakeholders through timely and
accurate information could have prevented false claims and misrepresentations and facilitated
prompt detection of any fraudulent activity (Turban et al., 2018).
Overall, combining these preventive measures could have helped the organization detect
and prevent fraud earlier, avoiding significant financial and reputational damage.
Carreyrou, J. (2018). Bad blood: Secrets and lies in a Silicon Valley startup. Knopf.
Department of Justice. (2018). Former Theranos executives charged with massive
Huang, E. (2019). The Theranos deception: An unbelievable story of ambition and deception.
Turban, E., Pollard, C., & Wood, G. (2018). Information technology for management: Ondemand strategies for performance, growth and sustainability (11th ed.). Wiley
Wells, J. T. (2020). Principles of fraud examination (5th ed.). Wiley.
Fraud Involving Technology
A former employee of Tesla, an electric vehicle manufacturer based in California, was
charged with technology-related fraud in 2019. According to reports, the former worker had
fraudulently obtained sensitive data from Tesla’s computer systems and sent it to outside parties
using “advanced technology.”
The former employee breached Tesla’s computer systems using “advanced technologies,”
but Tesla did not sufficiently monitor its computer systems for illegal access. It is also possible
that Tesla did not adequately safeguard its private data, making it simpler for the ex-employee to
access it. Effective data security was insufficient to prevent the leakage of essential information
to the outside. However, Tesla’s internal security team discovered the fraud activity later (Chung
& Busby, 2022). They deployed the use of artificial intelligence (AI), which greatly played an
essential role in detecting fraud. It helped simplify different organizational operations. After
investigating, they determined that the former employee was both the source of the breach and
the recipient of the private information.
A thorough fraud prevention program should be in place at companies to stop fraud,
according to the theory and research covered in Chapter 8 of the textbook. This program should
include ongoing employee training on fraud prevention, proper safeguarding of personal
information, and routine monitoring of computer systems for illegal access (Turban et al., 2018).
Additionally, continuous examination of the organization’s systems to check on any possible
fraud activity is essential and can reduce the chances of loss of important data. Organizations
should also implement a system of internal controls, such as internal audits and evaluations of
their vulnerability to fraud. Employers should develop a whistleblower policy to motivate staff to
disclose any questionable behavior. Implementing AI technology can play a great role in
fragging and stopping any form of transaction once fraud is detected (Ahmadzadegan et al.,
2020). They will also help detect fraud possibilities, thus notifying the detectives to take possible
action to prevent it.
Ahmadzadegan, M. H., Izadyar, M., Deilami, H. A., Banu A, S., & Ghorbani, H.
(2020). Detailed study on the features of mobile Applications. 2020 International
Conference on Electronics and Sustainable Communication Systems (ICESC),
Chung, W., & Busby, Z. (2022, March). STRATEGIC DATA ANNOTATION TO
FACILITATE AI-ENABLED NEWS ASSESSMENT: THE CASE FOR APPLE AND
TESLA. In 9th Annual Conference March 24-25, 2022 Hosted by Eastern
Kentucky University Richmond, Kentucky (Vol. 2, p. 20).
Turban, E., Pollard, C., & Wood, G. (2018). Information technology for management: Ondemand strategies for performance, growth and sustainability. John Wiley & Sons
Purchase answer to see full
Why Choose Us
- 100% non-plagiarized Papers
- 24/7 /365 Service Available
- Affordable Prices
- Any Paper, Urgency, and Subject
- Will complete your papers in 6 hours
- On-time Delivery
- Money-back and Privacy guarantees
- Unlimited Amendments upon request
- Satisfaction guarantee
How it Works
- Click on the “Place Your Order” tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.
- Fill in your paper’s requirements in the "PAPER DETAILS" section.
- Fill in your paper’s academic level, deadline, and the required number of pages from the drop-down menus.
- Click “CREATE ACCOUNT & SIGN IN” to enter your registration details and get an account with us for record-keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.
- From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.