Internal fraud occurs when an employee makes a false representation, fails to disclose information, or abuses a position of trust either for personal gain or to cause losses to others. Internal fraud can range from compromising customer or payroll data to inflating expenses to petty theft. Often referred to as occupational fraud, these schemes can be planned or unplanned and opportunistic or linked to organized criminal networks. When more than one employee is involved in the scheme, it is referred to as collusion and the average losses to the organization are greater.
