The matters related to different forms of fraud in hospitality industry have been increasingly topical in the last few years, in particular due to permanent decline that dictates restructuring of business operations.

According to the survey “The Fraud in Hospitality Industry”, some 94% of restaurants, hotels, and cafes have been facing corporate fraud and/or corruption. In the last three years the frequency of such cases has increased almost by 50%. Various fraud schemes and commonplace corruption have been growing among the staff and business partners. Indeed, up to 43% of hotels and 73% of restaurants are suffering abuse from their employees, whereas the fraud involving suppliers has affected up to 50% of hotels and 91% of restaurants.

In addition to traditional approaches and instruments that are used to implement fraud management in hospitality industry, Expert Discovery team applies forensic methods such as:

  • development of customized FDA (Forensic Data Analytics) tests;
  • analysis of the affiliation of employees and contractors (including social network analysis);
  • computer forensics including analysis of integration and access rights for various databases (bookkeeping, inventory accounting, cash account, electronic and paper menu, process cards and job order cost cards, etc.).

I. Forensic Diagnostics of Restaurants, Cafes, and Bars

Detection of eventual staff abuse in the kitchen zone as follows:
  • hoarding of foodstuffs for their following sale through (deviation from the standards established in the process cards; artificial reduction of food expiry dates; temporary correction of the data in job order cost cards, including electronic accounting systems; manipulation with food waste rate when butchering carcass meat, fish, etc.);
  • substitution of cheap ingredients for expensive ones (food re-sorting);
  • use of foodstuffs brought by employees themselves.
Detection of eventual staff abuse in the hall zone as follows:
  • calculation of several dining tables by using the same restaurant bill;
  • including excessive (not actually ordered) items in the client’s check;
  • diverse precheck manipulations (for example, a receipt for tax purposes has not been given to a client);
  • discount manipulations;
  • cash-settled orders manipulations.
Detection of eventual staff abuse in the procurement zone as follows:
  • Prejudiced selection of suppliers under terms intentionally discriminating against the owner, in particular through concluding contracts with the suppliers affiliated with responsible employees (purchases of foodstuffs and whole foods not meeting the quality standards (set by the owner and by the law); purchases at an overvalued price; fictitious, double and/or excess purchases).

II. Forensic Diagnostics of Hotel Accommodations

Hotel room sales by distorting (not reflecting) the sales in the automated control system (ACS):
  • room sale price understatement through secret deal with affiliated contractors (intermediate agents);
  • room sale price manipulations in the ACS;
  • sales of rooms intentionally classified as “temporarily out of service”;
  • guest accommodation according to daytime accommodation tariffs.

Crediting to a guest’s account the actually not rendered services or expenses of other guests

Machinations with customer loyalty programs (cards).

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