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When a former client's secretary was arrested for embezzlement years before his own crimes were uncovered, Bernie Madoff commented to his own secretary, "Well, you know what happens is, it starts out with you taking a little bit, maybe a few hundred, a few thousand. You get comfortable with that, and before you know it, it snowballs into something big." We now know that Madoff's Ponzi scheme started when he engaged in misreporting to cover relatively small financial losses. Over a 15-year period, the scam grew steadily, eventually ballooning to $65 billion, even as regulators and investors failed to notice the warning signs. Many of the biggest business scandals of recent years - including the News of the World phone hacking scandal, billions in rogue trading losses at UBS, and the collapse of Enron - have followed a similar pattern: The ethical behavior of those involved eroded over time. Few of us will ever descend as deeply into crime as Bernard Madoff, yet we all are vulnerable to the same slippery slope. We are likely to begin with small indiscretions such as taking home office supplies, exaggerating mileage statements, or miscategorizing a personal meal in a restaurant as business-related. Nearly three-quarter of the employees who responded to one survey reported that they had observed unethical or illegal behavior by coworkers in the past year.

1. "A lot of people making fraudulent claims on their travel insurance are first time fraudsters, and don't realise how serious it is to make a false claim," says Simon Cook, Head of Special Investigations at claims management and assistance company, CEGA. 2. "Making a false travel insurance claim can result in a criminal record, which would make it very difficult, for instance, to take out any sort of insurance policy in the future - and that includes car and household insurance," says Simon Cook. "In a worst case scenario, it could lead to a prison sentence." 3. Top of the list of fraudulent travel insurance claims? "It's common for someone who has suffered a genuine loss to add a few noughts to the value of that loss - a Sekonda watch might become a Rolex for instance," says Malcolm Tarling of the Association of British Insurers. "Exaggerated losses, false claims for lost baggage and fictitious medical treatment are among the most common fraudulent claims," adds Simon Cook. 4. "If a false travel insurance claim is submitted but withdrawn after having second thoughts, it can still lead to a prosecution for fraud," says Simon Cook. 5. "Insurers will check every detail of a dubious claim; from the authenticity of a doctor's bill handed out on the other side of the world, to the validity of a witness statement in a foreign language," says Simon Cook. "Cognitive interviewing techniques, investigation by overseas agents and medical assessments may all be used to assess the honesty of a suspicious claim." 6. "Fraudulent travel insurance claims put up the cost of everyone's insurance premiums," says Simon Cook. "In other words, innocent travellers foot the bill for fraudulent claims." Read full article