The Summer Lunch

Jim Smith and Bob Jones are new summer interns working for a major insurance company. During their lunch break each day, they eat at a local sandwich shop. One day, Bobs girlfriend joins you for lunch. When the bill arrives, Bob pays and tells Jim he will submit the bill for expense reimbursement as a business expense. Bob treats his girlfriend to lunch in this manner several times during the next month. You always ask for separate checks and pay for your lunch separately.

Corporate policy states that casual lunches are not considered a business expense. Bob says this is not a casual lunch. He says that you and he always talk business and that he is recruiting his girlfriend for an intern position next year.

Is fraud being committed by Bob?

What would you do?