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Country treasurer involved in $100m fraud in a “sophisticated criminal scheme” at ABB

Swiss engineering company ABB Ltd has announced that they have uncovered a ‘sophisticated criminal scheme’ in a South Korean subsidiary that led to about $100 million being stolen from the company. “The treasurer of the South Korean subsidiary is suspected of forging documentation and colluding with third parties to steal from the company,” ABB said in a statement.

Reputation impact even more damaging

The Wall Street Journal reports, “In a letter to employees, Chief Executive Ulrich Spiesshofer wrote: “The financial impact of this criminal behavior is one aspect; even more damaging could be the effect this crime will have on the reputation of our ABB.”

Apparently, the suspect, who wasn’t named by the company, went missing on Feb. 7, ABB said. A company spokesman said ABB uncovered the theft on Feb. 9 which is limited to South Korea. It is working with the relevant authorities.

Other fraud uncovered

Separately, ABB have unearthed alleged improper payments following an internal investigation into its past dealings with oil-services provider Unaoil Group which is also subject of other investigations. 

Lessons for corporate treasury departments 

The key lessons from this case is that fraud can happen anywhere, even in corporate treasury departments. Fraud best practices need to apply to all departments. Remember that according to KPMG survey the profile of a typical fraudster is that they were:

  • 36 to 55 years old
  • male 
  • an employee of the company
  • may hold an executive or director level position (over a third did)
  • colluded with others
  • motivated by personal gain
  • see themselves as well respected.

This is confirmed by the Association of Certified Fraud Examiners who describe the Profile of a Fraudster as: 42% employee, 36% manager and 19% owner/executive, see

CTMfile take: Are you sure your corporate treasury department is safe and secure? What are the reasons why you feel secure? Insecure? Does anyone always work late? Is this a wake-up call for corporate treasury departments world-wide?

This item appears in the following sections:
Fraud Prevention
Anti-Money Laundering Fraud Prevention
ID Systems & Services in Fraud Prevention
Minimizing Fraud Procedures
Minimizing Payment Fraud

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By Paul Stheeman on 26th Feb 2017:

I realize that ABB is a very large corporate, but I am still amazed that it was possible to construct a fraud scheme that can lead to a loss of $100m. Where were the controls?

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