Fraud Prevention Policy

GFIS LLC

Fraud Prevention Policy

Effective Date: 08/31/2025
Applicability: All employees, contractors, and third-party service providers

1. Purpose

To establish controls that prevent, detect, and respond to fraudulent activities affecting GFIS LLC, including:

  • Financial fraud (fake invoices, payment scams, embezzlement).
  • Identity fraud (fake clients, stolen credentials).
  • Cyber fraud (phishing, ransomware, data breaches).
  • Internal fraud (employee misconduct, unauthorized transactions).

2. Fraud Risk Assessment

  • High-risk areas identified:
    • Client onboarding (fake identities, shell companies).
    • Payment processing (fraudulent transfers, chargebacks).
    • Bank account management (unauthorized withdrawals).
    • Tax filings (false information submitted by clients).
  • Mitigation strategies:
    • Multi-factor authentication (MFA) for all financial transactions.
    • Segregation of duties (no single employee controls payments alone).
    • Regular audits of financial records.

3. Fraud Prevention Controls

A. Client & Payment Verification

  • New Clients:
    • Verify identities using government-issued IDs and biometric checks (if high-risk).
    • Cross-check business registration details (e.g., Secretary of State records).
  • Payment Methods:
    • Only accept traceable payments (bank transfers, PayPal, Stripe—no cash or anonymous crypto).
    • Block high-risk countries (OFAC-sanctioned jurisdictions).
    • Use fraud detection tools (e.g., Signifyd, Sift) for transaction monitoring.

B. Employee & Internal Controls

  • Background checks for employees handling finances.
  • Dual approval for transactions over $5,000.
  • Restrict system access (only authorized personnel can modify client records).
  • Whistleblower protection for reporting fraud anonymously.

C. Cybersecurity Measures

  • Email Security:
    • Train staff to recognize phishing scams (fake invoices, CEO fraud).
    • Use DMARC/DKIM to prevent email spoofing.
  • System Protections:
    • Endpoint detection & response (EDR) software.
    • Encrypted storage for sensitive client data.
    • VPNs & firewalls for remote workers.

4. Fraud Detection & Response

  • Red Flags:
    • Clients refusing to provide ID.
    • Sudden large transactions with no business justification.
    • Multiple failed login attempts.
  • Reporting Protocol:
    • Employees must report suspicious activity to the Compliance Officer immediately.
    • If fraud is confirmed:
      • Freeze affected accounts.
      • Notify law enforcement (if theft exceeds $10,000).
      • File Suspicious Activity Reports (SARs) with FinCEN (if U.S. nexus).

5. Training & Awareness

  • Quarterly fraud prevention training covering:
    • Latest scam tactics (e.g., business email compromise, deepfake fraud).
    • Secure payment handling.
  • Simulated phishing tests for employees.

6. Policy Enforcement & Review

  • Disciplinary action for employees involved in fraud.
  • Annual policy review to adapt to new threats.

Implementation Notes

  • Use AI fraud detection (e.g., Feedzai, SEON) for real-time monitoring.
  • Require signed fraud policy acknowledgment from all employees.
  • Maintain an incident response plan for data breaches.

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