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Scholarships /Awards Community Outreach Employment ACFE.com What is Fraud? Recognizing the Elements of Fraud By Mark R. Simmons, CIA CFE A government agency official directs the owner of a company doing business under contract to provide equipment and contractor staff that will be used to perform non-contract related work for the agency. When seeking payment, the contractor bills the hours for non-contract work as having been expended on contract related activity. The billing occurs with the knowledge of the agency official, and the agency official instructs lower level staff to approve the bill for payment from agency accounts. Because the contract is part of a federally funded program, the agency in turn files a claim for reimbursement with the federal government, which the federal government, in good faith, pays. Some people might say that the agency official is a creative manager. I'd say that agency official is a crook. FRAUD occurs when all of the following elements exist: - the untrue representation is believed by the victim (the person or organization to whom the representation has been made);