Which of the following is NOT the type of billing scheme?

According to the ACFE Fraud Tree, the three primary categories of billing schemes are shell company schemes, non-accomplice vendor schemes, and personal purchases schemes. "Invoicing via accomplice companies" is not classified as a distinct type of billing scheme. Instead, it is a variation of a non-accomplice vendor scheme where the vendor knowingly colludes with the employee to defraud the company. The fundamental scheme remains a fraudulent vendor payment, but the vendor's status changes from non-accomplice to accomplice. Therefore, it describes a characteristic of a scheme rather than being a separate classification.

A. Invoicing via shell companies: This is incorrect because creating a fictitious "shell" company to submit false invoices is a primary and well-defined category of billing scheme.
B. Invoicing via non-accomplice companies: This is incorrect because using invoices from legitimate but unknowing vendors to generate fraudulent payments is a recognized type of billing scheme.
D. Personal purchases with company funds: This is incorrect because making personal purchases and charging them to the company through the accounts payable system is a specific category of billing scheme.

1. Association of Certified Fraud Examiners (ACFE). (2023). Fraud Examiners Manual, International Edition. Section 2, "Financial Transactions and Fraud Schemes," Subsection "Billing Schemes." The manual explicitly categorizes billing schemes into (1) Shell Company Schemes, (2) Non-Accomplice Vendor Schemes, and (3) Personal Purchases Schemes. It discusses accomplice vendors within the context of vendor schemes, not as a separate category.

2. Singleton, T. W., & Singleton, A. J. (2010). Fraud Auditing and Forensic Accounting (4th ed.). John Wiley & Sons. Chapter 6, "Fraudulent Disbursements," pp. 133-142. This text, often used in university fraud examination courses, aligns with the ACFE's classification, detailing shell companies, pass-throughs, non-accomplice vendors, and personal purchases as the main billing schemes.

3. Wells, J. T. (2011). Corporate Fraud Handbook: Prevention and Detection (3rd ed.). John Wiley & Sons. DOI: https://doi.org/10.1002/9781118269139. In Chapter 4, "Billing Schemes," Wells outlines the three principal types of billing schemes consistent with the ACFE Fraud Tree, confirming that options A, B, and D are established categories.