Fraud and financial crime are often associated with sudden resignations, attempts to evade scrutiny, and financial behaviors inconsistent with legitimate income.
Option A (Correct): Being evasive about past employment suggests potential undisclosed misconduct.
Option D (Correct): Living beyond one's means is a major financial crime red flag, indicating possible fraud or illicit earnings.
Why Other Options Are Incorrect:
Option B (Incorrect): Nationality alone does not indicate fraud risk.
Option C (Incorrect): Having friends in high-risk industries is not necessarily a direct red flag.
Common Red Flags for Employee-Related Financial Crime:
Reluctance to take vacations or change roles (attempting to conceal wrongdoing).
Sudden resignation or disappearance following internal investigations.
Unusual financial activity, including large unexplained deposits.
Best Practices for Fraud Prevention in Corporations:
Regularly monitor employees in high-risk roles (e.g., finance, procurement).
Use whistleblower channels to detect internal misconduct.
Conduct thorough background checks before hiring employees.
Reference:
FATF Guidance on Internal Fraud and Money Laundering
Wolfsberg Group Best Practices for Employee Monitoring
Basel Committee Guidelines on Insider Financial Crime Risks