A teller at a savings and loan drive-through accepted a cash payment from customer #1 for an auto loan. The teller appeared to process the payment, but told the customer the printer was jammed and she can't print a receipt. The customer accepted the excuse and drove away. The teller pocketed the cash and wrote down customer #1's loan number and payment amount for future reconciling. A couple of

days before customer #1's monthly statement was printed, the teller recorded a cash payment from customer #2 as if it were made by customer #1. The teller pocketed the difference between the two payments. The teller continued to steal and misapply customer payments for the next two years without detection.

Identify the type of fraud scheme described. Describe five controls you would implement to address the fraud risk, and label each control as preventive or detective.

What will be an ideal response?

Answer: The fraud appears to be misappropriation of assets that is being concealed with a lapping scheme. Controls would include:
1. rotation of duties (primarily detective)
2. mandatory vacations (primarily detective)
3. surveillance with cameras (primarily detective)
4. staggered statement printing schedules, unknown to tellers (detective)
5. sequentially prenumbered, duplicate receipts (detective)
6. segregation of duties between cash handling and recording (preventive)
7. encourage customers to utilize on-line banking for loan payments and to frequently check balances (detective)