Business fraud is nothing new, but it is more prevalent in construction than in many other industries due to the great number of entities involved in most projects, says certified fraud examiner Wayne Kalayjian, a senior manager with Deloitte Financial Advisory Services in Los Angeles.
Fraud accounts for roughly 8% of U.S. GDP, according to the Association of Certified Fraud Examiners (ACFE). "So, if our GDP was about $16 trillion in 2012, then one could argue that fraud accounted for $1.3 trillion of that overall amount," Kalayjian says. "And since construction makes up 5% to 10% of our national GDP, then our industry conservatively absorbs about $65 billion in fraud-related schemes each year."