4.0 Categories of fraudsters

Spink et al. (2013) further categorises the different types of criminals in relation to food fraud and the level of risk associated with each type of criminal. Five types of criminal are outlined in Table 3 from the occasional criminals that are opportunist and commit crime infrequently to ideologically motivated individuals who carried out product tampering with the intention to cause public / organisation harm.  The magnitude of risk (in terms of likelihood and severity) is considered in Table 2 and will be unique to the situation that arises. Typical countermeasures have been described for different types of criminal that need to be considered within an effective food control program.

Table 3. Types of criminals and their attributes, risk and typical countermeasures (Manning and Soon, 2016; Spink et al., 2013)

Types of Criminals

Definition

Magnitude of risk (Likelihood/Severity)

Occasional

Infrequent, opportunistic individual

  • Low risk potentially mitigated by implementing appropriate countermeasures
  • Controls will be different depending on whether perpetrators are inside or outside the business and whether there is internal pressure to substitute to meet supply chain requirements e.g. order size. Measures such as stock control, mass balance exercises, internal audits, CCTV cameras may identify but risk level increases especially if adulteration cannot be identified readily by laboratory or visual analysis.Traditional technical risk assessment to implement supply chain and onsite security e.g. enclosed containers, secure vehicles and containers, tamper evident seals etc.
  • Stock control measures and mass balance exercises to ensure that resources utilized equate to product sold legitimately on invoices, dispatch notes etc

Occupational

Crime occurs at the place of employment, either as an individual acting alone or in collaboration with the modus operandi of the organization

  • Magnitude of risk increases especially if individual can operate unnoticed in an organization or operates in collaboration with the organization

  • Potentially a degree of mitigation by implementing appropriate countermeasures unless the activity is deliberately ignored or encouraged by management
  • Crime occurs at the place of employment, either lone individuals or through collaboration with the modus operandi of the organization. Perpetrators understand the controls and countermeasures in place and are able to work around them falsifying documentation if necessary

Professional

Criminal activity fully finances their lifestyle

  • Magnitude of risk increases and will depend on the nature of the product, organization, supply chain and/or the population targeted
  • Existing measures and controls in place can be vulnerable to professional criminals and their networks

Recreational

Undertakes crime for entertainment or amusement

  • Low risk potentially mitigated by implementing appropriate countermeasures
  • Traditional technical risk assessment to implement supply chain and onsite security e.g. enclosed containers, secure vehicles and containers, tamper evident seals etc

Ideological (related to food tampering with the intention to cause public harm and terror)

Domestic or international terrorist who commits the criminal act to make an ideological statement or to economically harm an entity, or to create panic and fear in the target population

  • Magnitude will depend on the nature of the product, organization, supply chain and/or the population targeted
  • Currently the use of risk assessment by organizations to identify appropriate controls e.g. security, tamper evidence, supplier assurance

Table 4. The following matrix illustrates the types of food fraud and their associated criminoloical typology.

Types of food fraud

Type of criminal (Increasing in sophistication)

Ideological

Recreational

Occasional

Occupational

Professional

Adulteration

X

X

X

Counterfeit

X

X

Diversion

X

X

X

Over-run

X

X

X

Simulation

X

X

Tampering

X

X

X

X

Theft

X

X

X

X

Misleading indications (words/pictures) or packaging size

X

Now let’s explore the following occupation and motivational based typological model for categorising food fraudsters. We’ll use meat trade as an example.

Fraudsters operating within the meat trade could be divided into internal (industry insiders such as farmers, meat processor, butchers) or external (industry outsiders such as organised crime groups) groups.

Category 1 - Industry Insiders

Description of modus operandi and vivendi

Rogue and Criminal Farmers

Generally, farmers are conservative and do not have a criminal mentality. They may possess a ‘Farmers mentality’ or pragmatic ‘hard-headed’ approach to business and to making money. They abhor waste and actively pursue money making opportunities, or to break even financially. This is a mix of ideological, professional and occupational nouse (Spink and Moyer 2011c).

A small number of farmers can be classified as rogue farmers (Smith 2004; Smith and McElwee 2013) and will knowingly conspire to pass otherwise wasted food products into the extended food supply chain.
They may actively conspire with others to steal animals for profit or fraudulently report animals stolen. Alternatively, they may launder stolen animals into their flock or through their farm shop; fraudulently label food as being from another source. They may deal direct to rogue butchers and restaurateurs or to trusted members customers. Rogue farmers take advantage of opportunity, whereas the criminal farmer repeatedly engages in such acts.

They are difficult to interdict because they operate from the privacy of their own farms and normally do not come to the attention of the authorities. The farmer possesses specialist insider knowledge of farming and of the food industry.

Rogue Entrepreneurs and Small Businessmen

This smaller, more discrete category, consists of entrepreneurs and small-businessmen actively engaged in the food trade or associated occupation.  It may consist of rural shopkeepers and traders who deal directly with farmers and restaurateurs.

They may own a store apparently unconnected to farming or the food industry but may sell food fraudulently. They may be hauliers or plant-hire specialists who earn additional income by transporting stolen animals or hiring plant to the criminals.

Rogue Butchers and Meat Traders

These bear the least risk of all food criminals because unless caught in the act of exchanging / purchasing they can launder the stolen / fraudulent meat directly into their businesses.

Specialist Workers

Potentially ex-farm workers or labourers with knowledge of farming practices and insider knowledge of how to deal with animals and farm-machinery.

Category 2 - Industry Outsiders

Description of modus operandi and vivendi

Criminal Mafias and Cartels

These have little or no direct association with the business or trade being investigated. They will be organizers and financiers.

They may be ’sleeping partners’ in the business or may have infiltrated it via threats or blackmail.

The category contains businessmen with no criminal records who have to be treated sensitively by the authorities making it an extremely difficult category to investigate.

Organized Crime Groups

Consists of organized criminals who are not traditional ‘organized crime groups’ but who seek the lucrative profits. They may not initially possess the necessary knowledge of farming or the food trade and tend to be more opportune and easier to investigate because they are known to the police.

Disorganized Criminals

This opportunist group are easier to interdict because they are predatory and have no contacts with the trade. 

Criminal Labor

Consists of convicted criminals who hire their services as criminal labor to rogue farmers and organized crime groups.

This complexity of why food fraud happens is further shown in final Table, and by using a slight modification of the questioning (5 Whys see Motarjemi and Wallace, 2014) technique of root causes analysis of food fraud with regard to both internal employees and external agents and the risk of intentional food adulteration is considered. The root cause analysis demonstrates that a proactive approach to improving work and supply chain related practices and that focus on intentional adulteration i.e. countermeasures and the utilization of FCRA tools to determine vulnerability is essential in order to mitigate risk.

Table 5. Root cause analysis of intentional food adulteration (Adapted from Motarjemi and Wallace, 2014).

Food Fraud

1

Why was the fraud committed?

Motivated for monetary gain. Deliberately modifying the food to achieve more $

2

Why did the fraudster want monetary gain?

Motivation to access money especially if perpetrator can identify a vulnerability

3

Why did the fraudster target this organization?

Ability to perpetrate the crime without discovery, magnitude of financial gain compared to risk.

4

Why did illicit business related practices arise? What is it about the organization’s profile that draws attention?

In order to answer the above specific questions, the respective organization can investigate reasons e.g. vulnerability to fraud, networks in which the business operates etc.

5

How should the company react?

Investigate the incident and identify vulnerabilities through the use of an appropriate analysis tool

6

How proactive should the company be to reduce future risk of threats

Adopt proactive approach to improve work related practices and conditions and utilization of appropriate analysis tool.