Fraud Risk Audits in Colorado

01The exposure

Why Growing Colorado Organizations Carry Fraud Exposure

Fraud risk rises when an organization grows faster than its controls. Front Range companies that doubled their headcount, nonprofits that took on new grants and contractors expanding into fast-growing Weld and Douglas counties often still run payments the way they did when everyone knew everyone. A bookkeeper who once handled everything may still create vendors, approve invoices and reconcile the bank account. Nobody intends a weakness; it simply accumulates. Our Colorado investigators look for those accumulated gaps before someone exploits them, often starting with Denver headquarters records.

Remote and hybrid work added new paths. Approvals happen by email or chat, signatures are electronic and staff may never meet the vendors they pay. That convenience makes impersonation easier. Organizations with locations across the state, from a Denver headquarters to a Western Slope office or a ski-county operation, may also have different practices at each site. A credible fraud risk audit samples each location rather than assuming the headquarters policy is followed everywhere, and a broader Colorado risk audit can cover physical theft at the same time.

• Rapid growth without updated controls
• One person controlling an entire payment cycle
• Email or chat approvals without verification
• Different practices at different locations

02Common schemes

Vendor, Payroll, Refund and Expense Schemes

The schemes we test for are well known, which is what makes them dangerous: they look like normal business. Fictitious vendors share an address or bank account with an employee. Real vendors submit inflated or duplicate invoices, sometimes with kickbacks to the person approving them. Payroll includes former employees who were never removed, or overtime approved by the person earning it. Refunds and credits go to cards that recur suspiciously often. Expense reports cover personal purchases. Each leaves traces in data, and our employee theft investigations team knows where to look.

Industry shapes the risk. Construction firms face change-order and subcontractor billing schemes, health care providers face billing and coding issues, hospitality businesses face cash and refund manipulation and technology firms face expense and procurement abuse. Defense and aerospace contractors along the Front Range, including those near Aurora and Colorado Springs, have government contract obligations that raise the stakes. Collusion between an employee and an outside party is harder to detect than either alone, and when signs of it appear, our corporate collusion investigators take over. Vendor screening is handled through our business partner background checks.

03Colorado law

How Colorado Statutes Shape a Fraud Finding

Colorado's general theft statute, C.R.S. § 18-4-401, covers knowingly obtaining, retaining or exercising control over another's property without authorization or by deception. Its classes rise with value: theft generally becomes a felony at $2,000, a class 4 felony at $20,000, a class 3 felony at $100,000 and a class 2 felony at $1 million. Thefts within six months may be aggregated, and repeated thefts from the same victim under one scheme can be charged together. That makes a full loss history important, because small monthly diversions may add up to a serious offense.

We do not decide what is a crime; prosecutors and counsel do. What a fraud audit can do is preserve the facts in a form they can use: transaction records, approval trails, interview notes and a clear timeline. Evidence gathered carelessly, or confrontations that tip off a suspect before records are secured, can damage both a criminal referral and a civil recovery. Where assets may need to be traced, our asset investigations team follows the money, and counsel decides on corporate malfeasance mitigation steps such as disclosures.

04Government money

False Claims Exposure for Contractors, Grantees and Providers

Organizations that receive state or local government money face additional exposure. The Colorado False Claims Act, enacted as HB22-1119 and effective August 10, 2022, generally mirrors the federal False Claims Act for claims paid with state or political subdivision funds, with exclusions including Medicaid claims. Those are covered separately by the Colorado Medicaid False Claims Act, C.R.S. § 25.5-4-305, which allows private individuals with knowledge of Medicaid fraud to bring actions. Both laws make billing accuracy and documentation a compliance issue, not just an accounting one.

A fraud audit for a grantee, contractor or health care provider tests how claims and invoices are prepared, who reviews them, whether supporting records exist and how billing concerns raised by staff are handled. Internal complaints matter because the people who notice billing problems are often the ones who later become whistleblowers. Retaliation protections apply, and counsel should be involved in any response. Related review areas appear on our compliance audit page, and our Colorado attorney services explain how privileged reviews are structured.

05Claims fraud

Insurance and Workers' Compensation Fraud Controls

Insurers face both external and internal fraud. Under C.R.S. § 10-1-128, insurers doing business in Colorado must maintain an anti-fraud plan that includes hiring or contracting for fraud investigators and must report suspected fraud to law enforcement and regulators. Section 18-5-211 makes insurance fraud a crime, with several forms treated as class 6 felonies. A fraud audit for an insurer or third-party administrator tests whether red flags trigger referrals, whether investigations follow and whether internal claims staff could manipulate payments themselves. Field work on disputed claims runs through our insurance investigations team.

Employers face workers' compensation fraud from the other direction. C.R.S. § 8-43-402 makes knowingly false statements to obtain benefits a class 6 felony, with forfeiture of compensation. Employers protect themselves mainly through prompt injury reporting, witness statements and preserved video, not suspicion. We review those processes so legitimate claims are handled fairly and questionable ones are documented, and where a specific claim looks false, our insurance claim surveillance service can document activity lawfully.

06Impersonation

Spoofed Emails, Changed Bank Details and Crypto Losses

Business email compromise is one of the most costly frauds organizations face. A message that appears to come from a vendor or executive asks accounts payable to update bank details or rush a wire. The defenses are procedural: verifying any change in payment instructions by calling a number already on file, requiring two people to approve new or changed vendor accounts and treating urgency as a warning sign. We test those procedures by reviewing recent vendor changes and walking staff through how they would handle a request. When a loss has already occurred, our scam investigation team acts quickly.

Cryptocurrency adds a newer path. Colorado's SB25-079, effective January 1, 2026, set daily limits at crypto kiosks of $2,000 for new customers and $10,500 for existing customers, with refund rights for a new customer's first transaction sent abroad if fraud is reported within 60 days. Employees and older relatives of staff are frequent targets of impersonation schemes that end at a kiosk. Our crypto scam investigations document those losses, and elder-targeted fraud is handled by our elder scam team, which works with resources such as AARP ElderWatch Colorado.

07Next steps and cost

Acting on Findings Without Creating New Risk

Findings are graded by likelihood and potential loss, with the evidence and a practical fix for each. Common fixes include separating vendor setup from payment approval, requiring callbacks on bank changes, reviewing payroll against active employee lists and rotating reconciliation duties. If the audit uncovers what looks like an actual loss, we stop and tell leadership or counsel before anything else happens. Confronting a suspect, freezing accounts or contacting police are decisions for counsel, and the work shifts to a scoped investigation through our corporate malfeasance practice.

Fraud reviews start at $1,200, and testing beyond the base scope is billed at $100 an hour. A vendor due diligence report is $300, and a basic background check is $102. Scope and total are confirmed in writing before work starts. Colorado no longer licenses private investigators at the state level, so vetting is up to you; Delator Group is a licensed Tennessee firm and holds itself to Tennessee's standard in Colorado. Every rate is published on our Colorado service pricing page.

Services

Fraud risk audit services in Colorado

• Process and access mappingPurchasing, payables, payroll, refunds and reconciliations mapped to show where a single person controls an entire money cycle without independent review.Learn more
• Vendor master file reviewVendor records tested for shared addresses, bank accounts or phone numbers with employees, plus duplicates, dormant accounts and unverified changes.Learn more
• Payroll testingPayroll compared with active employee lists, time records and approvals to identify ghost employees, self-approved overtime and unusual pay changes.Learn more
• Refund and credit analysisRefunds, voids and credits reviewed for recurring cards, unusual timing and patterns concentrated in particular employees, shifts or store locations.Learn more
• Payment change controlsRecent bank-detail changes and wire requests traced to confirm callbacks and dual approvals actually happen before money moves to a new account.Learn more
• Government billing reviewClaim and invoice preparation for state, local and Medicaid funds tested for supporting records, review steps and handling of staff concerns.Learn more
• Claims fraud controlsInsurer referral processes and employer injury reporting tested so suspected fraud is documented promptly and legitimate claims are handled fairly.Learn more
• Key employee screeningBackground checks for staff with financial authority, run with consent through lawful sources, when the audit identifies roles that warrant closer screening.Learn more
• Graded written reportFindings graded by likelihood and potential loss, with evidence and fixes, addressed to leadership, the board or counsel as the engagement directs.Learn more

How it works

How a Colorado fraud risk review runs

1. 01

   Scope and concerns

   We discuss your organization, systems, funding sources and concerns, agree on processes and locations to test and confirm the price and schedule in writing before starting.

2. 02

   Mapping and data

   We map each money process and who can act at each step, then obtain transaction, vendor and payroll data for the period selected for testing and analysis.

3. 03

   Testing and interviews

   Samples of real transactions are traced from start to finish, and staff are interviewed privately about how approvals, changes and exceptions actually happen in practice.

4. 04

   Graded report

   You receive findings graded by likelihood and potential loss, with evidence and fixes. If an actual loss appears, we tell leadership or counsel first, before anything else.

Compare

Common Colorado fraud scenarios and how they are graded (summarized; counsel should confirm application)

Statewide coverage

Fraud risk audits across Colorado

Denver metro organizations are reviewed by investigators assigned to Denver, Aurora and Broomfield, with Boulder County technology firms and research nonprofits handled through Boulder. Southern Front Range defense contractors and health care providers run through Colorado Springs, and northern Colorado organizations through Fort Collins. Western Slope businesses are reviewed through Grand Junction, with travel quoted in writing first. Most transaction testing happens remotely, so multi-location organizations receive one combined review, with site visits only where controls depend on local practice.

• Denver
• Aurora
• Broomfield
• Boulder
• Colorado Springs
• Grand Junction
• All of Colorado

FAQ

Frequently asked questions

Every service

Investigations available in Colorado

Every service below is available in Colorado and across Colorado, run by the same Delator Group leadership that manages our Tennessee casework. Choose a service to read how it works in Colorado.

Service areas

Private investigators across Colorado