News and analysis on the global fight against fraud
A few months ago, my good friend — we’ll call her Betsy — wanted to sell her old computer to help pay for a new one. She’d sold plenty of items online before, so she listed it in a few different popular spots like Craigslist and Facebook Marketplace and waited for the offers to roll in.
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Rick Belik, CFE
Detective, Omaha Police Department
For Rick Belik, CFE, Omaha Police Department Detective and part-time Task Force Officer for the FBI's White Collar Crime Task Force, fraud is often very personal. Belik, who was awarded the ACFE Outstanding Achievement in Community Service Award in 2015, has dealt with numerous cases of elder fraud. In addition to tackling cases that come across his desk, he is proactive about fraud education in his community. He has held numerous talks and seminars for senior citizens and caregivers to discuss common scams that target the elderly and how they can protect themselves from fraud.
How did you become passionate about fighting fraud?
I became passionate about fighting fraud by talking to the victims. These are true victims and fraud crimes affect much more than just a financial loss. There is a true, real or perceived, loss of security, safety and trust in the world around them, especially with senior victims.
What steps led you to your current position?
I started out in a cruiser like every other cop and then I joined our Mounted Patrol and did that for six years. When my 1,200-pound partner (horse) retired, I moved into investigations. Always being a bit of a "numbers nerd," the “Fraud Squad” was a perfect fit for me — I expressed an interest in the unit two years before I was assigned to it and I have been in that position for seven years. This year I have also become a part-time Task Force Officer (TFO) for the FBI's White Collar Crime Task Force.
The part-time TFO job was the idea of the local FBI supervisor, who is also an ACFE member. We got to know each other through Heartland Chapter events. We discussed cases that we’d both worked and discovered that we were definitely chewing some of the same dirt. There are jurisdictional issues that come up with being a cop in a municipality. Having a federal deputation can certainly broaden my approach. It has also helped find cases that might have otherwise "fallen through the cracks" in the system where both sides, federal and local, might think that the other is working on a particular case.
What is a memorable case or project that you have worked on; one that made you feel especially proud?
I work all of the financial exploitation cases involving vulnerable adults in Omaha. When paid caregivers steal from the people whom they are charged with helping, it really gets my dander up. I've worked several of these cases and, along with the partnership of Adult Protective Services (APS) and the County Attorney's Office, we have been able to bring suspects to justice, stop the financial bleeding and get the victims proper care and protection. This has been very satisfying.
I had one case where an elderly widow, living alone, was targeted by a man who knocked on her door and claimed to be a friend of her late husband's. This guy got into her head over a period of time, telling her that she was in danger from gang members and that she had to "pay them off" for protection through him. Over a short period of time, several thousands of dollars were depleted from her account. Bank employees became suspicious and alerted both APS and Law Enforcement. We were able to put a case together and get this guy convicted for robbery/extortion for the threats that he made to the victim. I drove her to the courthouse for the sentencing because she wanted to show the suspect that, in the end, he didn't get the best of her. It was an exhausting trip for her because she didn't move around too well, but it was important for her. I was humbled by her strength and proud to help her through it.
How do you think CFEs can help their communities better understand fraud risks and prevention?
In 2015, I was honored to receive the ACFE Outstanding Achievement in Community Service Award at the 26th Annual ACFE Global Fraud Conference in Baltimore. I've given dozens of talks about fraud to thousands of seniors and caregivers, informing them of what fraud and scam trends are out there. I’ve advised them of what warning signs they can look for, and what steps they can take, to make themselves and their loved ones less of a target. The ACFE has a broad range of fraud fighters with a vast range of knowledge. Getting that knowledge and experience out to the community does real and measurable good.
What activities or hobbies do you like to do outside of work?
My wife and I love to travel. If we can go somewhere different and experience something new, we're in!
Read more about Detective Belik in his full profile on ACFE.com.
Kenneth Springer, CFE, Founder and President
Corporate Resolutions Inc.
Author Kenneth Springer, CFE, is the founder and president of Corporate Resolutions Inc., a specialized firm that gathers intelligence and offers a variety of investigative services that helps its clients make informed business decisions. When conducting an investigation, “use your investigative skills to follow the evidence,” Springer said. “Interviewing is not a simple yes or no conversation; there are skills required to make sure the person feels comfortable in order to elicit the most honest and complete information.”
How did you become passionate about fighting fraud?
While in college, I spoke with a family friend who was in the FBI. I became very interested and pursued it.
What steps led you from the FBI to starting your own company?
Although I enjoyed the FBI and the people I worked with, I had an opportunity to leave and get involved in managing a small investigations firm that conducted background checks and investigations for private firms. Four years later, I was running the company and decided I wanted to start my own business. I put together a business plan, got a Small Business Administration (SBA) loan and started Corporate Resolutions Inc. in August 1991.
What is one of the biggest lessons you have learned since becoming a CFE?
When investigating a fraud, you cannot necessarily rely on all of the facts as initially presented by the client since they may have their own agenda. You need to be open-minded and not have a preconceived notion as to how the fraud may have happened and by whom. Use your investigative skills to follow the evidence.
I know this because a long time ago a client led me to believe that a certain employee had committed the fraud we were investigating. It turned out that the client was actually responsible. The client was eventually arrested by the FBI.
What is a memorable case or project that you have worked on — one that made you feel especially proud?
In one instance, investors backed a company that sold hardware (desktops) and during a surprise audit, found $5 million dollars missing. After two months of having forensic accountants try to figure out the fraud, we were brought in to conduct interviews and gathering facts. We quickly learned that while the auditors were there, the CFO abruptly resigned and left town (in our business we call that a clue).
We immediately began fact gathering on the previous CFO and learned he had formed a similar-sounding entity within the company, yet the CEO was unaware of it or why it was formed. He also changed company procedure so that he was the one who opened all of the company mail.
To perpetrate his scheme, he would buy 100 computers, pay for them and then return 50. When the computer company sent a refund check, he was able to take the check and deposit it into the account he had fraudulently formed — which was located at the same branch where the company did their banking. Thus, it did not raise any red flags within the company. The FBI is still looking for him.
While putting together the fidelity bond claim for the insurance company, we did a background check on the previous CFO. He was not a CPA as he had claimed and the three references he provided did not check out.
What activities or hobbies do you like to do outside of work?
Spending time with family and golfing.
Read Kenneth's full member profile in the Career Center on ACFE.com.
Scott Moritz, CFE
Managing Director, Global Lead, Protiviti Forensic
Protiviti
As a child of the 60s and 70s, Scott Moritz, CFE, global leader at Protiviti , was enthralled by TV shows like “Mannix” and “Kojak.” These popular shows portrayed ‘white hat’ detectives breaking open their cases. Being prone to wearing the ‘white hat,’ Moritz considers himself fortunate that his passion is also his career. While advocating anti-fraud efforts, Moritz has learned that it is important to “recognize that things are not always black-and-white” – balance is key. Moritz quotes American psychologist, Abraham Maslow, “If all you have is a hammer, then everything will look like a nail.” To this Moritz replies, “In order to avoid becoming a hammer, you need to keep an open mind, follow the facts and accept that not every allegation is true or can be proven. Our job is to investigate the allegations, determine whether they have merit and report the results.”
How did you become passionate about fighting fraud or what sparked your interest to enter into the anti-fraud field?
From the time I was very young, I was fascinated with the notion of becoming a detective and getting my ‘gold shield.’ Wearing the white hat has always been my instinct, and I am fortunate that my passion for investigations took me in the direction that it did.
What steps led you to your current position?
After college I confided in one of my sisters that I was submitting applications to take several police department entrance exams. My sister asked me if I had considered the FBI. She encouraged me to pursue it and put me in touch with a friend who was an FBI Special Agent in New York City for advice.
Fifteen months after applying to the FBI, I was sworn in as a new agent through the FBI Academy and was assigned to the Memphis, Tennessee, division on a white-collar crime squad. After four years in Memphis, I transferred to the FBI’s largest field office in New York. When I was assigned to the Asset Forfeiture Money Laundering Squad, I was a little deflated. I had my heart set on working traditional organized crime since New York City is home to five major crime families. I quickly realized that I had landed on a great squad whose primary focus was conducting parallel financial investigations of major criminal cases to then identify, seize and forfeit criminally-derived assets in order to dismantle major criminal organizations. Hence, I got to work on the largest high profile cases in the New York area, which included major organized crime, narco-laundering and white-collar crime cases.
After making many of these cases, I was offered an opportunity to leave the FBI and work for a Big 6 accounting firm. I ended up working on more than 30 monitorships of private sanitation companies during the course of my early private sector career. I also worked on a wide variety of financial crime and corruption cases, and made several stops along the way at different accounting and consulting firms, including two start-ups, before assuming leadership of Protiviti’s Forensic practice three years ago.
What are the most challenging aspects of being a White-Collar Crime & Anti-Corruption Strategist?
I think the biggest challenge is to get our clients to view fraud and corruption risk management and compliance as a strategic imperative and a critical part of their overall strategic planning. In 30 years of investigating financial crime and corruption, including 20 years of advising companies on these subjects, I’ve seen very few organizations that include fraud and corruption risk in their strategic planning processes. Instead, they opt to wall them off, which often results in their failure to consider the full spectrum of weaknesses and threats that could inhibit them from realizing their strategic goals.
What position in your career do you feel has made the most impact in your professional growth and why?
I think it’s really two positions. As an FBI agent investigating white-collar crime and corruption, I had to develop the ability to ingest and analyze large amounts of information about companies, the industries in which they operated and how the financial crime occurred. Something else that made a significant impact on my professional growth was coming into contact with people across a broad spectrum of society, from drug addicts, organized crime members and bank robbers to CEOs, judges and U.S. Senators. I had to learn how to establish common ground with every type of person and build rapport. It’s something that has served me well both professionally and personally.
What activities or hobbies do you like to do outside of work?
I’ve got three sons, all of whom were very active in school sports and other activities. My youngest is now a freshman in college and suddenly the flurry of high school football, baseball, indoor track meets, hosting pasta parties and attending awards dinners have all come to an abrupt halt. My wife and I are now struggling with how to continue to be helicopter parents from 250 miles away. In responding to this question, it occurs to me that I need a hobby. I know my son would probably appreciate it being something other than him.
Read Scott's full profile in the Career Center on ACFE.com.
Dick Carozza, CFE
Editor, Fraud Magazine
“What’s critical about your organization and reputation,” said former FBI Director Louis Freeh during the Monday Working Lunch, “is the interaction and interconnectivity that you bring between the government and the private anti-fraud community and establishment. That did not exist for many years for the most of the history of the FBI.”
Freeh said during his FBI tenure he often had ACFE members accompany him and become heavily involved in investigations. Now as chair of Freeh Group International Solutions, LLC, a Pepper Hamilton LLP group, he continues to closely work with Certified Fraud Examiners (CFEs).
Freeh, during his keynote, shared some of the lessons he learned during his FBI tenure and extolled the virtues of ACFE members.
“One of the biggest things that has changed is the technology that is available to investigators,” he said. “I just spoke at the second circuit [judges’] conference in New York. And the theme of all the judges in that circuit was the impact of technology on being a judge and particularly focusing on cyber crime, cyber technology and cyber terrorism. There were a number from leading technology companies giving insights as it impacts judges — judges who have to explain complicated cases to juries but also have to understand the provenance and integrity of evidence, which now comes from different platforms.”
Freeh reminisced about the state of technology in 1975 in the New York City FBI office. “In one case, we had … to surreptitiously record an organized crime guy’s conversation so we called our lab and we asked for the best cutting-edge technology they had. So they sent up a pair of shoes. The microphone was embedded in the shoes! Probably they were 12 ½ quadruple E shoes. And the first statement by the subject on the tape was, ‘John, what’s the matter with your feet?’ ”
Though technology is now light years from 1975 microphone shoes, some things have not changed, Freeh said. “The most important ‘value add’ that [ACFE members] bring to the anti-fraud community and the law enforcement community is … incredible experience and depth.
“It’s not a coincidence that two of your largest government communities [with ACFE members] are the IRS and the FBI. Because the synergies and the ability to share information there is unprecedented in our history,” he said. “You bring, I know from my own investigations, and sitting on boards, tremendous credibility because of your education, your certification, your reputation is just a sterling contribution to the anti-fraud community and the efforts that you bring on behalf of private clients and corporations,” Freeh said.
“Many of you work for the government by contract or otherwise and that information and that relationship is a very, very special one. It evolved over a long period of time. And the Bureau has evolved over a long period of time,” he said.
“The disability that the Bureau, and most government agencies have, is that they tend to react to external changes and tend to train, equip and pass statutory authorizations as a result of things that are coming to them from the outside as opposed to proactive, inside innovative thinking,” Freeh said.
He said the first FBI bureau investigators in 1908 — Treasury Department employees — weren’t gunslingers or bank robbery investigators; they were accountants. “They had no weapons; they had no authority to arrest anybody. That didn’t come until 1933. But it evolved due to the necessity of dealing with financial crime.” Then more outside changes influenced the FBI to investigate bank robberies, organized crime and narcotics, he said.
He said that after 9/11, counter-terrorism has become the necessary, but totally, consuming preoccupation of resources and programs and statutory authority. “Now, finally after the recession, the programs and the focus on serious global economic crime and cybercrime have been resuscitated,” Freeh said.
You can find more coverage from the ACFE Global Fraud Conference at FraudConference.com.
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