Generative artificial intelligence is now the fraud perpetrator

Fraud examiners have historically relied on reviewing documents to identify fabricated invoices, altered records and falsified financial statements. But now fraudsters are using generative artificial intelligence to autonomously produce near-perfect fraudulent artifacts. GAI is now the fraud perpetrator. Here are ways to detect and deter it.

Infamous fraudster Barry Minkow, the former CEO of ZZZZ Best, once described his chief financial officer (CFO) as a “genius with the copy machine.” During a 1990s jailhouse interview with the Association of Certified Fraud Examiners (ACFE), Minkow recounted the many methods they used to deceive auditors and successfully commit a multimillion-dollar financial statement fraud scheme. Estimates were that the CFO used the office copier to create more than $40 million in fictitious invoices. (The interview was recorded as part of the ACFE's Cooking the Books self-study course published in 1991.)

If Minkow and his CFO were still in the fraud business, they’d likely ditch the copy machine and begin using generative artificial intelligence (GAI) to create fake, totally original documents that are significantly more difficult to detect and that can be created at a much faster rate.

Criminals adopting technology