If Joe Francis, owner of the notorious Girls Gone Wild franchise, has taught a single lesson to would-be thieves, it’s this:

Don’t use dumb numbers when you’re claiming bogus deductions.

Although indicted over a year ago for falsifying business expenses on his 2002 and 2003 corporate tax returns, Francis still provides Finance staffers with a great guide for spotting fishy business.

There are three types of numbers that should set off a red flag in your Accounting department:

1. Round numbers
2. Dollar amounts without decimals, and
3. Deductions that consist of the same number repeated.

Not content with pushing his luck once or twice, Francis used all three examples — and was quickly nabbed by IRS.

Among the multiple false insurance expenses he tried to claim, one was for $1,666,666,67 (note the lack of a decimal point), while another was for $333,333.33. The construction cost for one of his offices was pegged at $500,000.00, right on the nose.

You don’t have to be an accountant to realize that these funny-looking numbers are going to attract attention. Encourage your department to use the same kind of logic, especially when combing through expense reimbursements.

Does a meal cost exactly $50.00 or a plane trip add up to $666.66? It’s possible. But these are the kind of numbers that possible system-scammers might come up with. Taking the time to validate business expense receipts not only catches fraud before it finds its way onto the company’s books, but it also shows employees that reimbursement abuse — no matter how small it is — will be spotted.

Tags: Business expense, Fraud detection, Girls Gone Wild, Reimbursements