Tendering Fraud Schemes

Bribes and kickbacks

Bribes and kickbacks are the most serious of business crimes and lead to other frauds and abuses, including bid rigging, fraud, higher costs and lower quality as the parties seek to recover the cost of the bribes and exploit the corrupt relationship.

Corrupt Payments

The bribe need not to be in money or cash, and often is not. Any benefit given or received with the intent to corruptly influence the recipient can be a bribe. It may be any “thing of value” to influence an official act. “Things of value” that have been given and received as bribes includes:

Experience gifts, free travel and lavish entertainment.
“Loans” whether or not repaid.
Use of credit cards.
Sexual favors (hiring of prostitutes, etc.)
Overpaying for purchases e.g., paying Rs. 20,00,000 for a car worth Rs. 10,00,000.
Cash
Fees and commissions, even if recipient allegedly provided services to the payer.
Hidden interests in business transactions.

Often the payments follow the general sequence outlines above, with the amount and form of payments becoming more significant and incriminating as the scheme progresses.

Corrupt influence

Corrupt influence in the contract and procurement process often is reflected as, among other things:


Qualifying an unqualified or untested company to bid or be a vendor.
Improper or non-competitive contract awards
Paying too much for good or services
Buying too much of an item, or buying inappropriate items
Continued acceptance of low quality or non-compliant goods or services

As the corruption continues, the abuses often turn into fraud such as fictitious invoices, with the parties conspiring to spy the profits. Eventually the excesses of the scheme lead to detection, as the mounting evidence of favorable treatment and fraud, and the conspicuous expenditures of the conspiration call attention to their behavior.