Spotting Deception in the Mighty and the Meek

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James D. Ratley, CFE

ACFE President and CEO

In March, a Houston federal jury found Texas financier R. Allen Stanford guilty of masterminding a $7.1 billion Ponzi scheme. He was convicted of 13 of 14 charges, including fraud, obstructing investigators and conspiracy to commit money laundering.

According to The New York Times, prosecutors argued that Stanford had lied for more than two decades, promoting safe investments for money that he actually channeled into a luxurious lifestyle, a secret Swiss bank account and business deals that consistently lost money.

When the verdict was read, his mother and other family members wept, while his investors in the courtroom cried with relief. He now faces a possible life sentence.

I've known many fraudsters like Stanford — smiling pseudo-entrepreneurs who will slap you on your back with one hand and pick your pocket with the other. Master deceivers.

During your fraud examinations, you try to detect deception in the words, gestures, postures and expressions of elusive subjects. You fastidiously dissect the financial evidence, but you also try to discern what's really going on in that person seated in front of you.

Pamela Meyer, CFE, our cover-story newsmaker, and the author of the book, "Liespotting," says, "Fraud examiners go beyond spotting lies every day. Their jobs depend on getting to the truth."

Meyer, who will be a keynoter at the 23rd Annual ACFE Fraud Conference & Exhibition, says that we can get caught up in personalities, power and he-said/she-said volleys. "At the end of the day, what will matter is the set of facts that the fraud examiner uncovers, so it's important to stay slightly psychologically distant from your subjects," she says. "The most-important fact may be hiding in the least-exciting place associated with the least-charismatic person one is investigating. It takes a certain mental discipline to stay focused on those facts and not get taken in by larger-than-life personalities."

Read the full Letter From the President, as well as other insightful articles and columns, in the May/June issue of Fraud Magazine.