Final answer:
The fraud scheme where cash from one customer is used to cover missing funds from another customer's account is called lapping. Lapping differs from identity theft, which involves using a person's private information to commit fraud. Lapping is an embezzlement tactic utilized within corporate finances.
Step-by-step explanation:
In a fraud scheme known as lapping, the perpetrator attempts to cover the theft of cash received from customer A by applying cash collected from customer B to A's account, then applying a receipt from C to B's account, and so forth. This fraudulent activity is distinct from other schemes such as identity theft, which involves illegally acquiring and using a consumer's personal identification, credit, or account information without their permission. In contrast, lapping is a method of delaying the accounting process to hide the initial theft and is a form of embezzlement.
Identity theft can have severe consequences for the victim, including drained savings accounts and massive debts incurred by the thief. Lapping, on the other hand, can be an internal issue within a company leading to mismanagement and discrepancies in financial records.