Satyam Used Computers To Create 7,500 Fake Invoices - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
IT Leadership // IT Strategy

Satyam Used Computers To Create 7,500 Fake Invoices

Company officials employed an elaborate network of applications to facilitate accounting fraud.

To carry out the massive accounting fraud at Indian outsourcer Satyam, the perpetrators used the tool with which they were most familiar -- information technology.

Former chairman Ramalinga Raju, along with his alleged accomplices, created a complex system of business applications in order to generate thousands of fake invoices that were used to falsely inflate the company's revenue by more than $900 million, investigators said Monday.

"The investigation revealed that in order to perpetrate this fraud, the accused have surreptitiously got a subroutine incorporated into the source code of the [Invoice Management System]," India's Central Bureau of Investigation said in a statement.

The system was set up so that the perpetrators could log in as a so-called "Super User" to create fake documents that would not be detected by Satyam's legitimate business applications, according to the CBI. They also allegedly used a modified version of Microsoft Excel linked to the IMS to bypass Satyam's accounting controls.

All told, Raju and his cohorts -- including, allegedly, two employees of Satyam auditor PricewaterhouseCoopers India -- used the setup to create 7,561 phony invoices purportedly worth $946 million.

CBI investigators engaged forensic computer analysts to help uncover the scheme. "As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified," the CBI said.

Raju was arrested and jailed earlier this year for his role in the scandal. Telecom outsourcer Tech Mahindra has agreed to acquire Satyam for $422 million in an effort to give the company a fresh start.

Last week, Raju's attorneys claimed that he's suffering from cardiac problems that render him unfit to take lie detector tests that authorities hope will help them uncover more details of the fraud.

Raju's legal reps made the claim in responding to the CBI's request that Raju make himself available for polygraph testing, according to India's Business Standard newspaper.


New tools can corral admin-level access; plan ahead to avoid costly downtime. Download the report here (registration required).

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
Commentary
Get Your Enterprise Ready for 5G
Mary E. Shacklett, Mary E. Shacklett,  1/14/2020
Commentary
Modern App Dev: An Enterprise Guide
Cathleen Gagne, Managing Editor, InformationWeek,  1/5/2020
Slideshows
9 Ways to Improve IT and Operational Efficiencies in 2020
Cynthia Harvey, Freelance Journalist, InformationWeek,  1/2/2020
White Papers
Register for InformationWeek Newsletters
Video
Current Issue
The Cloud Gets Ready for the 20's
This IT Trend Report explores how cloud computing is being shaped for the next phase in its maturation. It will help enterprise IT decision makers and business leaders understand some of the key trends reflected emerging cloud concepts and technologies, and in enterprise cloud usage patterns. Get it today!
Slideshows
Flash Poll