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The financial impact of internal fraud can be devastating for any business. But beyond the economic losses, companies also face damage to credibility and the uncomfortable realization that process gaps exist.
In Brazil, 63% of companies have identified one or more fraud incidents in the past 12 months, according to the Fraud Diagnosis in Brazil 2024 report by Grant Thornton.
For 90% of respondents, fraud was driven primarily by opportunity.
“The lack or weakness of controls and double-checking mechanisms opens the door for fraud,” explains Alessandro Gratão, Head of Forensic Services at Grant Thornton.
Preventing illicit practices requires a solid strategy for prevention, detection, and response to fraud risks.
The Fraudster Profile
The report highlights that fraudsters often have deep knowledge of internal processes, typically having worked at the company for more than one year, are between 26 and 45 years old, and enjoy high levels of decision-making autonomy.
Another revealing statistic: 87% of identified fraudsters in Brazil are men, a reflection, according to Gratão, of the male-dominated leadership structure still prevalent in many organizations.
Alarmingly, companies recover only 20% of financial losses from fraud cases. In 80% of incidents, the fraudster simply has their employment terminated, with no legal consequences.
“Today in Brazil, only 2 out of 10 fraudsters face legal action. Many continue to circulate in the job market with no accessible record of their misconduct,” warns Gratão.
Prevention: Strengthening Internal Controls
Recommended measures include:
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Establishing a Code of Conduct aligned with corporate values
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Training employees regularly
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Applying disciplinary measures consistently
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Implementing preventive controls and double-check mechanisms
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Creating confidential reporting channels (whistleblowing hotlines)
“Companies with reporting channels detect fraud more quickly than those without,” Gratão notes.
Legal Protection and Risk Mitigation
According to Dante D’Aquino, Head of Corporate Criminal Law at Vernalha Pereira Advogados, fraud schemes are becoming increasingly complex and adaptive, including in digital environments. Even with governance and compliance frameworks in place, loopholes remain—fraudsters may alter invoices, favor suppliers, or exploit overly centralized processes.
“You need to do your homework,” stresses D’Aquino. “Beyond basic double checks, companies should thoroughly review accounting, financial transactions, procurement of new products or suppliers, budgets, and the people involved in these chains. That’s where vulnerabilities lie.”
When fraud is suspected, companies have legal mechanisms to recover losses. The recommended approach is to involve legal counsel early, from evidence gathering to judicial action.
“A lawyer can file a notícia de crime (formal criminal complaint), which is more comprehensive than a police report and allows for precautionary measures during investigations,” explains D’Aquino.
These measures can include:
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Banking and tax secrecy breaches (under court order)
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Asset freezes
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Evidence collection and preservation
Strategic Compliance
By acting decisively, companies protect their legal standing—both in relation to the fraudster and in demonstrating compliance with regulatory frameworks, such as anti-corruption laws, public procurement legislation, and economic crime regulations.
Source: Revista Conmax
