Sophisticated Fraud: When 'Family Members' Become Tools for Exploitation

Fraud in business operations, regardless of scale or industry, is always a pressing issue. It not only causes financial losses but also severely impacts the reputation and trustworthiness of organizations. The following case in Vietnam is a prime example of how some individuals exploit clever schemes for personal gain.

A Clever Scheme: 'Family Members' in the Game

An electronics manufacturing company with foreign investment implemented strict regulations to prevent illegal gifts and commissions. However, within the company itself, a secretary bypassed these rules by using their relatives as accomplices in fraudulent activities.

Specifically, the secretary’s relative conducted business with the company’s outsourcing partner, selling products at prices higher than the market rate. Through this closed-loop relationship, they not only evaded detection by monitoring teams but also profited unjustly from each transaction. This directly increased production costs, affected product pricing, and damaged the company’s reputation with its partners.

Where Did It Go Wrong?

• Lax monitoring systems: Insufficient mechanisms to closely supervise participants in the supply chain.

• Exploitation of family relationships: Individuals with fraudulent motives often use family members as "masks" to conceal their actions.

• Ineffective preventive measures: Prohibiting gifts and commissions is necessary but insufficient to address sophisticated schemes.

  
  

BigVUN’s Solution: Transparent and Effective Procurement Management

Cases like these cause not only financial losses but also long-term damage to a company’s reputation. BigVUN, with expertise in procurement management and cost control, offers comprehensive solutions that enable companies to:

• Build robust monitoring processes: Track every step in the supply chain, from order placement to payment.

• Prevent internal fraud: Establish cross-check systems among departments to ensure no loopholes for exploitation.

• Evaluate and make costs transparent: Utilize cost analysis tools to compare market prices and identify anomalies in transactions.

  
  

Conclusion

Fraud in businesses is not a new story, but the ways it occurs are becoming more complex and sophisticated. Building a transparent and honest working environment not only ensures sustainable growth but also strengthens trust with partners and customers.

Let BigVUN accompany your business on its journey to establishing the most effective and optimized management system. We believe transparency is the key to success!