Unnecessary Purchases by Corrupt Employees

B

The correct answer to the question is B. Need recognition scheme.

A "need recognition scheme" is a type of corruption scheme in which a dishonest employee convinces their employer to purchase unnecessary goods or services from a supplier. The employee might do this by exaggerating the company's need for the goods or services, or by suggesting that the supplier is the only available option. In some cases, the employee might receive a kickback or other form of payment from the supplier for their role in the scheme.

In this type of scheme, the employee might create a fake purchase order or invoice for the unnecessary goods or services, or they might manipulate the company's procurement process to ensure that the supplier is selected. The victim company ultimately suffers financial losses as a result of the unnecessary purchases, while the corrupt employee and supplier profit from the scheme.

The other answer choices are not correct for this scenario:

• A "presolicitation scheme" involves a fraudster who creates a false sense of urgency or need for goods or services before the victim company has a chance to conduct a formal solicitation process.
• A "false sole-source scheme" involves a fraudster who falsely represents that only one supplier is capable of providing the goods or services needed by the victim company, thereby eliminating competition and allowing the fraudster to charge inflated prices or receive kickbacks.
• A "submission scheme" involves a fraudster who submits false or inflated invoices to the victim company for payment.

It is important for anti-fraud professionals to be aware of the different types of fraud schemes and to implement controls to detect and prevent them.