A common form of construction fraud is through the substitution, removal or even the exaggeration of the amount of materials being used on a project. An example of substitution would include the promise of a higher grade or brand of materials only to deliver materials of lesser quality. What makes the substitution a fraudulent act is when the project owner is unknowingly invoiced at the higher price and the contractor or supplier who provided the goods pockets the difference.
A good way to keep this from happening is that whenever material is delivered to the jobsite, not only should the project owner request to see the receipts but to contact the supplier directly regarding the quality, brand and quantity of materials shipped. This idea of fraud by substitution quickly comes to a halt, and hopefully before it ever occurs.
Periodic visits to the jobsite by a Certified Fraud Examiner wearing the appropriate safety gear which is visibly marked "Fraud Examiner" is an excellent way to get the message out to subs and suppliers that fraudulent acts such as material or equipment substitution will not be tolerated.
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