Cross-Firing Scam

A cross-firing scam fraudulently secures credit using a web of accounts and shell companies to make transactions that give a false impression of a company’s health. It is similar fraud to check kiting.

A cross-firing scam tricks creditors into believing a company is solvent went it is not. It exploits the difficulty in obtaining clear information on a large number of transactions in a web of shell companies. These may be further obscured by using different lending institutions and exchanging funds between foreign companies. For example, one department might charge a shell company for work rendered, while the shell company simultaneously charges the department for a different contract. This sort of fraud can be difficult for auditors to spot.