The Latest Frauds I’m Seeing as Forensic Accountant in 2025-2026

Every time I hear of a fraud that occurred to someone I know or a potential client I cringe. There is someone, oftentimes with a high intelligence level/a lot of free time taking advantage of another person who has usually worked hard for the money which the fraudster steals.

As a CPA, CFE, and CFO Expert Witness handling forensic accounting exams in the Bay Area, here are the latest frauds I’m seeing in 2025-2026 – from gym lockers to sophisticated business schemes – and how to protect your business.

Scheme 1: Gym Locker Fraud – Why Business Owners Are Targets

One such case involved a rash of thefts from local gyms. The fraudster would lurk in locker rooms and take the combination code from someone’s locker. Then when the member goes to work out the thief breaks into the locker. They overlook cash, smartphones and other ID cards to take credit cards.

Of course, when they try to charge tens of thousands of dollars the credit card companies flag the purchases. But the aggravation factor is huge as the victim has to contact law enforcement, change their cards and recurring purchases and make sure their passwords and other security information is secure. Not to mention the emotional energy and grief caused.

Business lesson: Business owners and executives at high-end gyms (Equinox, Lifetime) are targeted because thieves know they have high-limit corporate Amex cards. If your company card is stolen from gym:

1. Corporate card still needs to be canceled – recurring SaaS charges (AWS, Google Ads) will fail and disrupt business
2. Personal ID in locker can lead to business identity theft
3. Solution: Never bring business cards or ID to gym. Leave in office safe or use phone wallet only.

Scheme 2: Fake Deposits to Your Bank Account – The $100k Check Overpayment

My client is a small tech company who used Chase Bank. They had a ‘customer’ from overseas place an order for approximately $5,000. Because it was a new customer they required the business to prepay for the purchase. They gave their wire instructions and awaited payment. A few days later, the fraudster mailed a check for approximately $100,000 from a US address to the bank with vague instructions. The bank deposited the check and it of course bounced a few days later. In the meantime the fraudster asked for $95,000 be returned to them.

The whole charade cost the business their banking relationship with Chase, as Chase flagged the account as high risk. The business had to change banks, which created a disruption. Chase initially didn’t want to release the business’s funds, recurring charges had to be changed and there was a period of time in which no debit card was available, so services were disrupted.

Definitely huge headache-causers.

This is classic check overpayment fraud + bank account takeover, and Chase’s response is now standard under Reg CC.

How it works:

1. Fraudster sends $100k check for $5k order
2. Says “Oops, sent too much, wire back $90k difference plus keep $5k for order and $5k for trouble”
3. Check appears to clear after 2 days (Reg CC makes banks make funds available, but not actually cleared)
4. Business wires $95k back – real money
5. 5-7 days later, original $100k check bounces as counterfeit
6. Business is out $95k, plus bank flags account for fraud

Why Chase closed account: Under Bank Secrecy Act, bank must file SAR (Suspicious Activity Report) and if they think account is being used for money laundering or fraud, they de-risk by closing. Small business loses.

Prevention checklist I give clients:

• No refunds via wire for overpayments – only refund to original check after 10 business days verified clearance (call issuing bank, not just wait for your bank)
• Separate incoming checks account from operating account
• Require ACH or wire only for first-time overseas customers – no checks
• If you get overpayment check, it’s 99.9% fraud – shred it

Scheme 3: M&A Revenue Fraud – The $300k Store That Was $72k (My Case)

This is the most expensive fraud I see now – see my full case study at /fraud-purchase-retail-store/.

Seller claimed $300k revenue, $100k profit for Metro Cellular store. POS, landlord reports, and sales tax showed $72k-$150k revenue. We bought for $49k plus inventory, lost $64k rent. Classic P&L fabrication.

2025-2026 version: AI-generated bank statements and P&L. I now require video of POS export and direct call to landlord to verify sales.

Scheme 4: Partner Distribution Fraud – Millions to One Partner

From my forensic accounting exams page: Recent case included millions of dollars of distributions to some partners but not others. Managing partner coded personal Tesla, family vacations as “management fees” and took $1.2M extra.

How to catch: Look for operating agreement requiring pro-rata distributions. Pull K-1s vs actual cash received. Pull Amex statements.

Scheme 5: Employee Embezzlement via Venmo/Zelle – No Description

Many times I receive bank statements with thousands of transactions with no description. Employee writes checks to self via Zelle/Venmo coded as “vendor” or “consulting.”

Detection: Require dual control on Zelle – no Zelle from business account. All payments over $500 require 2 signatures or approval in Bill.com.

What To Do If You’ve Been Defrauded – Steps for California Businesses

1. Preserve evidence – don’t confront employee yet, copy QuickBooks, download bank statements
2. Write 2-page narrative – when, how, how much
3. Report to police if over $10k – get police report number (helps with bank)
4. Call bank immediately – for wire fraud, you have 24-48 hours for recall
5. Hire forensic accountant early – I calculate damages and prepare report for attorney
6. Consider civil vs criminal – civil for treble damages under Penal Code 496(c), criminal referral to DA

If you are a business owner in Fremont/Bay Area who suspects partner or employee fraud, or you received a suspicious $100k check, contact me at hpaccounting.com. I turn data dumps into evidence that recovers money.