During even the best of economic times, fraud is not uncommon in the construction industry. During periods of recession, however, it’s a problem that grows appreciably worse.
For various reasons, contractors historically have had weaker internal controls than in other industries. That’s alarming because even the best of companies are at risk. U.S. businesses lose more than 5% of annual revenues to fraud, according to the Association of Certified Fraud Examiners Inc. That translates to more than $652 billion in fraud losses each year.