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The rising cost of living has led countless industrious individuals to take jobs or start companies on the side in order to make ends meet. This is the way that many successful companies have gotten their start. It is also one of the hallmarks of our great free enterprise system-that inspiration, perspiration, and application can lead to great success.

On the other hand, greed can also be a motivator for moonlighting. And when greed overcomes morality, it might be tempting for an aspiring entrepreneur to misuse the physical or intellectual assets of the primary employer, especially if the person is able to guide the award of contracts within the primary place of employment. Insufficient control and oversight in the awarding of contracts can be an invitation for fraud.

In one case investigated by ResultQuest, an executive of an oilfield services corporation steered a contract to a single-jet aviation charter operation he owned to ferry top engineers to overseas work sites. Doing so would supposedly save the company valuable time and money. This might have been the case in the beginning; however, within a couple of years, the charter service had grown to three aircraft flying entire crews to distant work locations, most of which were served by commercial airlines, as well as charging outrageous ancillary fees for such things as flight crew, room and board, aircraft storage, and inflated landing charges. This might have gone on had it not been for a keen auditor who raised questions.

When insiders benefit from contracts, whether legitimate or not, it gives the appearance of favoritism and fails to maintain the arms-length relationship that is essential to ensuring that contractors are operating in the company’s best interest. Furthermore, it can negatively affect the morale of others in the organization who see it happening.

If you have questions about your company’s contracts or if you want to know if there are any signs of hidden insider involvement, contact the specialists of ResultQuest at 713-781-9040.