In the latest episode of Fraud Talk, Scott Porter, CPA, CA, and Senior Investigator at CPA Ontario, shares techniques to assist fraud examiners conducting investigative interviews in corporate settings. He also explores traditional law enforcement interview models, and offers emerging alternatives to enable practitioners to conduct ethical, legal and effective interviews.
Below is an excerpt from the full transcript of the discussion, which you can download in PDF form, or you can listen to the episode.
Sarah: What do you think are the most important areas when it comes to investigative interviewing?
Scott: I think there's three key areas, Sarah. It starts with preparation. You need to be incredibly prepared when doing your interviews. You need to know your evidence inside and out. By showing up prepared, you command respect, and respect is important in an interview. You don't need to intimidate the person you are interviewing, but you certainly want to create an atmosphere of respect, and preparation gives you the best chance of creating that type of environment.
I would say the second thing would be evidence. In frauds and evidence-based crime, there should be some evidence supporting your investigation, whether that's an email, a check, a bank statement, but the thing you need to keep in mind is, how do you use your evidence strategically? And that's the key. You don't want to show your cards too early; save them for later. The best way to tell whether someone's lying to us or not is by asking that person a question that you already know the answer to, based on evidence that you have in your back pocket.
The third area that I think is the most important for interviewing is empathy. Empathy is fundamental to a productive interview. People often get empathy and sympathy confused, but empathy is a complex emotion and it's different than sympathy. Sympathy is feeling sorry for someone, whereas empathy is really doing the work and trying to understand the world from the other person's point of view, even if you haven't experienced that yourself.
When you're facing a fraudster, it can be difficult, but the thing to remember is that oftentimes, the person that you're interviewing is not a bad person. He or she has just made some mistakes in his or her life, perhaps because of financial pressure.
Sarah: Yes, I think that's something that we try and talk about within the ACFE and with CFEs, and the fraud triangle, the three factors — the pressure, opportunity and rationalization. I can see where empathy when looking at the potential pressure and rationalization really comes into play.
I also remember that in your presentation in June, you included some real interview footage from a Canadian murder case where the interviewer was, he just really used empathy and treated the other person with respect when interviewing the guilty party, and eventually, I remember from the video, it ended up coming to a confession near the end. How important do you think building that rapport is in interviewing and staying nonconfrontational and using empathy?
Scott: I think rapport building leads to trust. A great way to build that trust is through empathy and respect. Sarah, what you just talked about on the fraud triangle and rationalization and really understanding the suspect's rationalization process through empathy, I thought it was a very astute comment, and I try and do that in my interviews.
An example of that is, I interviewed a guy one time who was a controller for a company, and he had taken over $500,000 from his employer's company. What he had done was written a series of checks to his wife over a period of three years. I asked him why had he paid his wife and he said, "It was for bookkeeping." Well, then I asked him, "Why did you pay her so much money?" He said, "Well, there was a lot of work to do." Then I said, "Well, did you tell your boss, the owner?" He said, "Well, things were really busy and he didn't get around to it." He was clearly struggling with his answers, but he wasn't prepared to admit any wrongdoing.
If I kept asking him questions down that path, he would have denied it all day long. Then I changed directions. I finally said to him, "Weren't you going through a previous divorce at that time?", which is something I learned from a previous witness interview, and you can learn a lot from your witness interviews. He said, yes, he was, and I said, "Well, I imagine that you were facing a lot of financial pressure."
He said, "You're not kidding, there was a lot of alimony to pay and things were certainly tight." I paused and I said to him, "Do you think maybe some of those pressures that you were feeling is why we're here today?" He just paused and nodded in agreement. Then I said to him, "Okay, well, thank you for telling me that, we need to go through the details of what happened." He opened up and told me everything.
The reason he opened up to me was exactly what you just said, Sarah. It's because I was empathetic with him. I understood his rationalization process and identified that he was still a good person, but he had taken that money because of the financial pressures of his divorce. This is where it becomes crucial for the investigator to understand the emotions of the interview room, and this is most easily done as you said, through empathy, trust and rapport building.
You can find all episodes of Fraud Talk at AFCFE.com/podcast or wherever you listen to podcasts.