What is an example of an overstated expense scheme?

An overstated expense scheme occurs when an individual inflates the amount of an expense to receive a larger reimbursement or reflect higher expenses than actually incurred. In this case, altering a receipt to increase reimbursement amounts directly exemplifies this type of fraud because the employee is intentionally modifying the receipt to show a greater expense than what was truly spent. This misrepresentation leads to the individual receiving more money than they are entitled to, which is the essence of overstated expenses.

While claiming personal purchases as business expenses and submitting legitimate expenses without documentation can involve deception, they may not specifically pertain to the act of overstating an already incurred expense. Using a credit card for personal expenses does not fit the definition of an expense scheme since it does not involve the manipulation of reported expenses for reimbursement purposes. In contrast, altering a receipt most clearly demonstrates the intent to deceive by inflating the amount reported, making it the prime example of an overstated expense scheme.