CFEs Share Their Most Memorable Fraud Cases

AUTHOR'S POST

Mandy Moody, CFE
ACFE Content Manager

According the the ACFE's latest Benchmarking Report for in-house investigation teams, the majority of fraud investigation teams (60%) take one month to close a case. But, as we all know, each case is different. Some can take six weeks to close and some can take six years. For this year's International Fraud Awareness Week, happening this week, we wanted to share a few of your colleagues most memorable cases. Let us celebrate the hard work and time you put in to each and every case you work on, and hear about why some cases will never be forgotten.

“Usually our audits are done after end of year. There was one occasion, however, where we undertook a real-time audit during a national emergency and exposed high levels of fraud and misappropriation of assets. The report was widely publicized and led to parliamentary scrutiny, which was aired live on national television for the first time in our history. In an unprecedented move, high-ranking public servants were suspended without pay for six months and recoveries of monies lost in taxes and undelivered goods were recovered.”

- Adama Renner, CFE, FCA, Deputy Audit General, Audit Service, Sierra Leone

“I’d say the one that I was most proud of was a simple travel and expense case. The company asked us for help on an investigation into an executive assistant (EA) who was using the bosses’ (there were multiple that this EA worked for) credit cards in a fraudulent manner — purchasing personal items, taking trips with friends, that type of thing. All in all it was a straightforward case, but what I was so proud of was when we finished going through all the supporting documentation, it was handed over to the general counsel, who in turn gave it to the police. When we got an update on what happened, we were told the police thanked them for wrapping it up in a nice little bow because it made the prosecution extremely easy. I guess it’s the simple things in life sometimes!”

- Michael D’Alessandro, CFE, CPA, Corporate Risk and Compliance Manager, Sony Corporation of America  

“After moving to London in 2005, I worked at the headquarters of the Commonwealth Secretariat, an intergovernmental organization. It provides technical assistance in the promotion of the rule of law and good governance with a focus on sharing best practices and capacity building. I oversaw the organization of international anti-corruption and counter-terrorism conferences and training sessions in London, Jamaica and Malaysia. This entailed close collaboration with a highly diverse range of subject matter experts, including those at Scotland Yard, as well as government officials, criminal law experts and policy researchers in various nations. We worked towards very tight deadlines across three time zones, two of which were at the opposing ends of the globe. It was equally challenging, thrilling and rewarding. Germany is not a member of the Commonwealth, which meant I could only hold a temporary position (and was the only German), but having the opportunity to work with those high-caliber passionate fraud fighters and senior lawyers was deeply inspiring and presented a lasting influence.”

- Britta Bohlinger, CFE, MA, BSc, Founding Director, RisikoKlár

Find more stories like these, as well as free videos, infographics and more at FraudWeek.com.

5 Ways to Connect with Other Fraud Fighters on Social Media During Fraud Week 2017

GUEST BLOGGER

Sarah Hofmann
ACFE Public Information Officer

One of the great things about International Fraud Awareness Week, beginning next week, is seeing how it brings fraud fighters together as they spread fraud awareness in their communities. In that spirit, we want to connect with each one of you on social media this Fraud Week. Here are some of the ways you can connect with us and your peers during this week of fraud awareness:

1. Answer new trivia questions every day — We will be posting a new trivia question Monday-Friday on the ACFE’s Facebook page and Instagram account. Challenge your peers and see who can be the first one to comment and guess the correct answer! The answer to each question will be shared later in the day.
2. Join the ACFE’s first Fraud Week Twitter chat — Join us on Tuesday, November 14, at 11 a.m. CST to participate in our first-ever Fraud Week Twitter chat. Our topic is “You discovered fraud — now what?” and we want to hear your best tips and methods for handling a fraud once it’s discovered. Learn how to participate.
3. Share the latest resources — We’re adding a new video to our sharable videos library on how fraudsters launder money. This basic primer is perfect to share on your Facebook, LinkedIn or Twitter accounts so you can educate your clients, friends and family on how embezzled money is cleaned by fraudsters. We will also share a new podcast on Initial Coin Offerings (ICOs) and posting a new blog.
4. Tell your peers what you’re doing in the ACFE’s members-only community — We will be checking in with how your Fraud Week efforts are going all week in the ACFE community. Share tips and ideas for spreading fraud awareness with your ACFE peers. You may even get inspired to adopt a new approach for next year!
5. Tag all your #fraudweek posts with the official hashtag — We will be retweeting, reposting and sharing everything supporters are doing during the week on our Facebook, Twitter and Instagram. The easiest way for us to find your great posts is for you to add the #fraudweek hashtag or tag the ACFE’s account in your post.

For more ideas on what supporters are doing for Fraud Week, check out the Fraud Week events page. We look forward to seeing and sharing all the great things supporters like you are doing during this week, and encourage you to connect and engage with other anti-fraud professionals!

8 Ways to Raise Fraud Awareness During Fraud Week, November 12-18

GUEST BLOGGER

Sarah Hofmann
ACFE Public Information Officer

Each year, fraud fighters around the world use International Fraud Awareness Week as an opportunity to come together to raise fraud awareness in their communities. Fraud Week, November 12-18, 2017, is the perfect time to go a step further in your role as an anti-fraud professional and start discussions among peers, coworkers, executives and stakeholders
in your community about how important fraud prevention is to society as a whole.

The first step to getting involved is for you, or your organization, to sign up as a supporter at FraudWeek.com. Once signed up, you can use any free resources provided on the Fraud Week website to help spread fraud awareness. This year, we have added an interactive fraud knowledge quiz, animated videos that explain why fraudsters commit fraud and new
infographics. Whether you use this week to spearhead new anti-fraud initiatives within your organization, or turn your message outward to the community as a whole, any work you do will help to reduce and mitigate fraud risk.

Sharing your support for Fraud Week with the public establishes your organization as a trustworthy body within your industry. In addition to signing up, there are many other ways you can show your dedication to fraud prevention and awareness. Here are some ideas of ways you can help educate those around you:

• Host a fraud knowledge contest and challenge your coworkers to a game of who knows the most about infamous fraud cases by using our interactive quiz.
• Share our animated videos that explain why people commit fraud, what characteristics are common among fraudsters and how fraudsters launder money. They’re ideal for posting on social media.
• Put a Fraud Week supporter badge in your email signature.
• Share badges and infographics on social media with the tag #fraudweek.
• Print and post our free downloadable posters and infographics in your office, community center or anywhere you think people would benefit from learning more about fraud.
• Host an informal event for your coworkers or community to disseminate fraud prevention best practices.
• Encourage your elected officials or law enforcement to spread tips on consumer fraud prevention.
• Perform a fraud check-up for your organization and present your findings to executives, as well as a proactive plan for how to remedy weak spots in your current controls.

Don’t let this week’s events and resources pass you by! Sign up as a supporter today at FraudWeek.com.

3 Psychological Tools That Will Help You Elicit Confessions

GUEST BLOGGER

Sarah Hofmann
ACFE Public Information Officer

On a Thursday evening your doorbell rings. You open the door to find a 9 year-old child on your threshold who says, “Hi. I’m selling candy bars for my school. Do you want to buy one?” Would you buy one? Or would you politely decline? What if the child instead said to you, “Hello. Do you think children should be reading more?” If you respond affirmatively, they follow up with, “Do you mind buying a candy bar to support our library?” Chances are that you are much more likely to buy that candy bar after agreeing with the child that children should read because you now feel compelled to back up your previous affirmative statement. That scenario is more than a clever sales pitch for a child — it is a perfect example of the social contract compelling you to act.

In his session, “Social-Psychological Behaviors: An Underused Tool for Fraud Investigators,” Bret Hood, CFE, will share that story and more at the upcoming 2017 ACFE Law Enforcement and Government Summit in Washington, D.C., October 30. The child in question was his daughter and after slumping candy fundraising numbers, he taught her to use a two-prong question method to increase the likelihood of people buying the bars. He says that fraud examiners can use a number of psychological tactics like two-prong questioning to interview and elicit confessions from suspected fraudsters. A few other tools Hood will discuss are:

Social Contract. If you force someone into a situation where they use cognitive dissonance to lie to themselves, they are more easily exposed. He says that if you lie to a stranger, you won’t have as much trouble changing your story later, or denying what you said previously. However, if you lie to someone you know, or if you write down the lie, you’re more likely to stick to that story, no matter how outlandish it might be. 

Reciprocity. Humans are naturally inclined to reciprocate what they perceive to be kind gestures from others. Hood suggests some seemingly minor tricks to use in an in-person interview with a suspect — like offering them a can of soda or a more comfortable chair. The same concept can even be applied to interviews over the phone. Starting a thought with an implication of camaraderie or collusion — like saying, “I normally don’t share this with people, but…” — can make the target of the interview feel that they must give you a piece of information equally special.

Priming. Simply softening an interrogation about embezzling to a line of questions about “misplaced” money can elicit more honest responses from suspects, or even unwitting pawns. When people feel like they are safe and understood, they’re more likely to share information. Priming your words to make them feel understood is an easy way to achieve that truth.

There are many ways that anti-fraud professionals can build a case against fraudsters, but much of the work that requests for documents, subpoenas and audits do can also be accomplished by tapping into the most basic aspects of the human psyche. 

You can hear Hood speak about this topic, and hear about the latest fraud techniques unique to law enforcement and government professionals in Washington, D.C. next month. Visit ACFE.com/fraudsummit and register by September 29 to save an extra $95!

How Fraud Examiners Can Use and How Fraudsters Can Abuse Artificial Intelligence

SPEAKER INTERVIEW

Amber Mac, TV/Radio Host, Internet of Things Expert at AmberMac Media, and keynote speaker at the upcoming 2017 ACFE Fraud Conference Canada in Toronto, October 29-November 1

What do you think is the No. 1 security risk that advancing technology poses?

I think the Internet of Things (IoT) attack surface is the biggest technology threat today. As Gartner points out, there will be 20 billion devices connected to the internet by 2020. However, unlike smartphones and computers, we're seeing thousands of newly released IoT gadgets every day from a myriad of suppliers. This means that security precautions are often bypassed in order to get to market more quickly. (Hear Amber discuss this even more in depth in her podcast interview at ACFE.com/podcast.)

How do you think fraud examiners could potentially use (and conversely fraudsters abuse) AI?

When we talk about artificial intelligence (AI), fraud examiners are more regularly using this technology to detect fraud (without even knowing it). For example, machine learning software (one application of AI) can now quickly and effectively determine accounting abnormalities. However, fraud attackers are also using early stage AI to commit fraud. If fact, most worrisome to me is video fraud. Many research institutions are already experimenting with algorithms that program a video to make a politician or business leader appear to say things that they did not. One can only imagine the issues with this as the technology gets into the wrong hands.

What are you most hoping attendees of the conference will take away from your presentation?

I really want attendees to leave my presentation with a much better understanding of the future of both the Internet of Things and artificial intelligence. It’s critical to recognize what’s happening in the market today and where things are heading in the next five to 10 years, so fraud examiners can properly prepare for the inevitable risks.

You are on the front lines of the latest and greatest technology out there, but what is one thing you still hold on to that is manual or traditional?

Strangely enough, I still write my research notes on a piece of paper or in a notebook. For me, it’s not that I don’t recognize the power of digital tools to simplify this process, but I use this practice as a memory tactic. It’s only upon writing with pen to paper that I can better recall facts and stats.

You can read more about Amber and register for the 2017 ACFE Fraud Conference Canada at FraudConference.com/Canada. Be sure to register by September 29 to save CAD 100!