Quantifying the cost of fraud is a slippery subject. By nature, fraudsters don't like to leave records of their activity. At today’s Financial Executives International (FEI) conference in Boston, I had the chance to see one of the world’s most effective converted crooks explain some of tricks of fraud trade.

Frank Abagnale, whose life was portrayed in the hit film Catch Me If You Can and now fights fraud for the FBI, explained that less than 10 percent of corporate embezzlements are reported. He estimated that the cost of such fraud pilfers more than $660 billion in revenue from companies every year, costing every man, woman and child $500 per year. Most companies just chalk this up to the cost of doing business, he said, and only 2 percent of embezzlers do jail time.

Why so slippery? Despite statistical models that try to capture potential fraud and increased awareness, new technology makes it just as easy (if not easier) for fraudsters to find weaknesses in the system than to prevent fraud. A growing problem that the FBI monitors constantly is an underground market for "packets" of personal information — bought and sold online — that crooks use to create "synthetic" identities.

Many embezzlers, Abagnale says, end up copping pleas in court and not even serving time — leaving honest employees of the companies they robbed driving away scot free in new sports cars. The best revenge, he advises, is to file a 1099 tax form against thieving ex-employee. "The IRS will take your car, your home, and garnish your wages," Abagnale says. "That threat is far greater than jail time." Apparently red tape can be more fearsome than white-collar prisons.

Abagnale also suggests that companies and individuals use micro-cut paper-shredders that chop up financial statements and voided checks into confetti, buy uni-ball 207 gel pens that cannot be altered, and staff departments that handle money or vital personal information with more people, making it harder to collude.