Forensics Journal - Stevenson University 2014 | Page 44

FORENSICS JOURNAL

Demolishing Construction Fraud
Kristi O’Connor

From the beginning of time, a common goal in every business has
been to maximize profits. In ancient Rome, builders were working to
find ways to make an extra profit using marble as their primary material source (Hurley and Harvey). The top layer of marble was easier
to excavate, while the deeper layers took much more time and effort
to extract (Hurley and Harvey). Builders found they could save time
and ultimately money by using only the top layers of marble in their
projects. Unfortunately, the top layer of marble was riddled with
holes and air pockets which made it less sturdy than the deeper layers
(Hurley and Harvey). These flaws were typical for the top layer of
marble and could be covered up with “mud putty or wax that would
make the marble look solid, but not strengthen it” (Hurley and Harvey). When structures began collapsing, the government investigated,
resulting in a law requiring all builders to list the materials they were
using and sign a statement verifying the quality of the marble (Hurley
and Harvey). If a building collapsed and the builder was found to
have used the cheaper marble, the punishment was death (Hurley
and Harvey). Although the methods of building and punishments
for crimes have changed since the first century, construction fraud
continues to exist today. This article will discuss common methods
used to commit construction fraud as well as techniques to detect and
prevent fraud from occurring.

Overbilling frequently accompanies materials fraud because it allows
the fraudster to cash in on the difference between what they spent
on the project and what the customer reimburses them. Baker Tilly
defines these actions as “abusive billing practices” because they violate
terms of the contract and harm the customer in some way (“Construction Fraud: Stories”). This could include charging the customer
for first-rate materials, when cheaper goods would have fulfilled the
terms of the