Student Scholarship Winner Receives Much More Than a Free Registration

MEMBER PROFILE

Kim Fleischmann, CFE, Senior Auditor - Global Internal Audit Services
Walmart

When Kim Fleischmann, a born and bred Oregonian, applied on a whim for a student scholarship to attend the ACFE Global Fraud Conference in 2012, she had no idea that she would leave the event with an auditor position with Walmart. “Without the scholarship and conference, I’m not sure when I would have realized what opportunities were available in the private sector,” said Fleischmann. “Ultimately, I believe I ended up where I’m at because of the connections made through the ACFE and my willingness to integrate my experiences into my new career.”

How did you become passionate about fighting fraud?

My passion for fighting fraud has steadily grown throughout my working career. During college, I processed background screenings for rental applications and discovered I loved digging up dirt that people thought they hid. A couple of years after graduating, I worked for a small international fishing company leading the accounts payable department. This was my first experience working for someone whose ethics I questioned. Throughout the next decade, I worked in various companies, good and bad, and continued to have experiences with individuals who walked the fine line between ethical and unethical behaviors. It was during this time that my frustration and passion grew as I continued to see the damage unethical decisions left behind.

How do you think receiving a scholarship to attend the ACFE Global Fraud Conference impacted your career?

Applying for the student scholarship to the ACFE Global Fraud Conference was something I did on a whim. I was close to completing my masters in Criminal Justice Administration, and I was not sure of my next step. The only thing I was sure of is that I wanted to fight fraud and corruption. While at the conference, I approached the Walmart Internal Audit booth in the Exhibit Hall to see what opportunities they had to offer. Before leaving the conference, I had completed an interview. I received a job offer within the month. Throughout my studies, I assumed I would end up in the public arena and never really considered the corporate world, despite having worked in that world for the previous decade. Without the scholarship and conference, I’m not sure when I would have realized what opportunities were available in the private sector.

What is one of the biggest lessons you have learned since becoming a CFE?

I remember someone once saying that fraud is sexy. In the last couple of years, especially since earning my CFE, I would agree with that statement. On the surface, fraud is sexy and fascinating, but it is after you look past the exciting façade and really look at it that you see the infectious and insidious nature that allows it to proliferate. I have discovered that when the CFE credential comes up in conversation most people are intrigued, but tend only to see the sexy side of fraud. Those that are truly passionate are the ones that look beyond the obvious and see the challenges faced in combating fraud and corruption.

What steps led you to your current position?

After one particularly boring day at work, I did some depressing calculations and realized I still had 30 years left before retiring. That, combined with the fact that I never truly loved any job since graduating, prompted me to reassess how I wanted to spend the rest of my working career. Law enforcement had always fascinated me, so I jumped head first into a criminal justice graduate program. It was there I realized how different I was from my classmates as years spent in business gave me a unique perspective. Throughout my studies, I made a conscious effort to grow and expand that perspective through classes, research and networking so that I stood out among my peers. Ultimately, I believe I ended up where I’m at because of the connections made through the ACFE and my willingness to integrate my experiences into my new career.

What is your current role and what does it entail?

As a Senior Auditor within Internal Audit, I am lucky to be a member of a small functional team specifically focused on anti-corruption and fraud prevention. Working with customers in ethics, compliance and legal, my team helps ensure that policies and controls are in place to discourage or detect unethical or fraudulent activity. Additionally, I have the opportunity to encourage and educate others on the risks of fraud within various areas of the company through work with the local ACFE chapter.

What is a memorable case or project that you have worked on? Feel free to alter details to protect confidential information.

My current project is by far one of the most challenging, and rewarding, that I have worked. Presently, my team is traveling the world to assist in reinforcing existing anti-corruption policies and controls. Throughout the project, I have had the privilege of learning the intricate workings of the world’s largest company.  Beyond that, I have seen firsthand the difficulties cultural and ethical difference present when operating in the global sphere.

What activities or hobbies do you like to do outside of work?

I like trying new things and going to places off the beaten track. While at home, I enjoy reading, cooking and enjoying the beauty of Northwest Arkansas. When on the road, I love trying local delicacies and cultural activities. 

To apply for a scholarship to attend the 25th Annual ACFE Global Fraud Conference, contact Lupe DeLeon, Member Services Manager, at LDeLeon@ACFE.com.

10 Golden Tenets of Fraud Prevention and Deterrence, Part 1

SPECIAL TO THE WEB

Possibly the toughest task for any fraud examiner is preventing and deterring fraud. Some believe that fraud control and prevention is at its best when the process of detection remains a secret. However, it’s very interesting to see how people react when the mode of detection is open, and he or she knows they risk being caught.

RULE NO. 1: NEVER UNDERESTIMATE

A fraudster uses the same techniques we use for fraud prevention to find new ways to penetrate a system or process.

Regardless of your system’s complexity, it’s just a matter of time until a fraudster overcomes its protections. Periodically updating and revising your fraud identification techniques are essential.

We had this interesting training-room incident at a bank, at which we’d taught select members from a team to identify patterns in bank passbooks that could indicate fraud as they reviewed huge volumes of loan cases. We split the team into two groups: Group A (trained with special skills) and Group B (trained with basic skills).

We let Group B process the cases first, and then let Group A review the processed cases. Out of 100 proposals reviewed by Group A, 12 cases matched the patterns that we had taught them. We didn’t tell the two groups, but we then added three perfect, pre-screened, fraud-free cases. We announced to Group B that 15 cases had been turned down for loans. We allowed Group B members to review any of the cases once again.

Within an hour, a shrewd member of Group B walked up with the three cases we added, asking, “Would you please re-process these cases? I think there has been a mistake in the assessment.” We asked him why he felt so. He said, “I’ve been observing these guys [members of Group A] from across the room and felt whatever they were looking for wasn’t here." He quickly explained the pattern that we had taught Group A.

Many of us sitting inside glass walls feel secure about the processes that are our safety valves. However, it's just a matter of time before fraudsters can penetrate processes and know the triggers. Rarely, neither remains a secret. The objective is to continuously explore and never be under the impression that fraudsters won’t uncover your triggers or identification mechanisms.

RULE NO. 2: NEVER REPLACE DILIGENCE WITH AUTOMATION

Nothing can substitute for common sense and diligence. We need technological fraud prevention mechanisms, but we can’t forget that the answers we seek depend on how logically and accurately we design the questions. And if someone tampers with your logic or queries, you could be barking up the wrong tree.

The Indian people work hard to retain their culture. Many across the country have the same first names. Street, city and locality names are also very similar or exactly the same. Therefore, when investigators find a match in a credit bureau verification report of a customer, they verify all details to establish that the customer and person in the report are one and the same. Customer credentialing for granting financing or loans is one of the toughest.

I recall a verification case in which we tried to review three years of income tax return (ITR) forms. However, the preliminary verification report stated that two of the forms didn’t exist. Based on these automated reports, we were about to decline the proposal. However, we wanted to make sure that we weren’t losing a good customer because the other documents apart from the ITR didn’t show any negative patterns. It’s prudent in business not to reject good customers simply because they made mistakes in the process or documentation. In this case, we decided to investigate the matter.

The evolving story was an eyeopener. 

Read the remaining golden tenets on Fraud-Magazine.com.

New Resources to Fight ID Crimes

AUTHOR’S POST

Mandy Moody, CFE       
ACFE Social Media Specialist

My mornings usually consist of hitting the snooze button at least three times at home, getting my daughter ready for school in a zombie-like fashion and hopping in my car just in time to miss traffic. I typically stop for coffee or gas, depending on the day, and then arrive at work ready to take that first sip of joe. However, after attending ID360: The Global Forum on Identity at UT Austin today, I now realize that my pleasant morning scenario is full of at least four ways a criminal could attempt to steal my identity… all before I can enjoy a full cup of coffee. You see in that mundane list of my activities lies my mortgage loan, my car loan, my credit card used at Starbucks and my debit card used at the gas station; all prime targets for someone looking to commit an identity crime.

I learned this and more during the panel discussion, “Identity Crimes and Victims: Who are criminals targeting? How do crimes affect different victims and ages?” Moderator A.T. Smith, deputy director of the U.S. Secret Service, along with representatives from the Department of Justice (DOJ), FBI and Treasury Inspector General for Tax Administration (TIGTA) weighed in on the current state of identity theft and fraud, and its life cycle from investigation to prosecution. Angela Byers, Section Chief of Financial Crimes at the FBI, reminded attendees that while there is definitely a trend of high-tech identity crimes occurring, there is still a large number of low-tech ways (cold calls and theft) criminals are getting our information. Byers mentioned the “snatch and grab” scheme that involved fraudsters stealing women’s purses from their cars or in public places and then using their personal information to commit crimes. (I guess that makes five vulnerabilities for my morning list; I leave my purse in the car every time I get gas or coffee.)

Each panelist was later asked what the most common ID crime is that they are seeing. Smith broke it down by sharing that 37 percent is credit card fraud, 23 percent is bank fraud, 13 percent is check fraud, 8 percent is false identification fraud, 7 percent is computer crime and the remaining 12 percent is full of other miscellaneous crimes.

When the panel was asked what a typical cybercriminal looks like, the answers were all too familiar: anyone. According to Jackson, it could be the guy next door doing your taxes or, as Smith said, the shadowy figure behind a computer in Eastern Europe. But, as Rusch pointed out, much of identify fraud is defined by its victims. An important way to fight it is by looking at what the victims have in common, and then arming them with the tools they need to fight back.

Texas Comptroller Susan Combs also took the stage at the Forum to announce a $5 million investment from the Texas legislature to The Center for Identity to create an online identity theft, fraud and privacy resource center. The website will provide an interactive way for businesses and individuals to become better informed and protect their information more securely through training modules, apps, quizzes, white papers, videos, games and infographics.

“The Texas Legislature has given us the opportunity to grow the Center for Identity into an international center of excellence and an unparalleled resource for Texans and beyond,” said Dr. Suzanne Barber, director for The Center for Identity. “We will equip individuals with the knowledge and tools needed to manage, protect and value their identity in today’s ever-connected world.”