Director Uses Experience to Challenge Business as Usual

MEMBER PROFILE

LaToya Lacey, CFE, CPA,
Global Audit & Risk Director, Diageo
Norwalk, Conn. 

LaToya Lacey, CFE, CPA, Global Audit & Risk Director at Diageo has climbed her way to a position that leverages all of her learned and innate skills: delivering internal audits, communication, leadership and the training and education received from earning and maintaining the Certified Fraud Examiner (CFE) credential. "I was working in finance training at Kraft Foods when I obtained my CFE," Lacey said. "At the time, a position in investigations was not available, so I stayed close to the industry and proudly displayed my CFE plaque at my desk. Over a year later, this very large plaque gained the attention of Kraft's CFO who wanted to know why I was in training instead of investigations. A few months later, I moved into a role within investigations. I believe this experience speaks to the value of this credential and being prepared to take advantage of potential opportunities."

How have you seen your roles and duties change as your career progressed?

Over the years, my responsibilities have increased, and I have developed a broader knowledge of business outside of the U.S. However, there are two very important things I look for in every position: I must be challenged in a way that positively contributes to my personal and professional development, and I must be empowered to challenge "business as usual" to increase efficiency and productivity and strengthen the control environment. Those have been the consistent factors that have ensured my continuous career progression.

How did you become passionate about fighting fraud? 

Years ago, I discovered what appeared to be fraudulent activity during an internal audit that I turned over to our investigations department. The investigation led to two individuals leaving the business. This is what sparked my interest. I became passionate about fighting fraud when I realized how often fraud occurs and how business is impacted. I spent a year working in investigations, and although I'm not currently in a position where I investigate fraud, the knowledge I gained from that experience has changed the way I conduct audits and how I think about controls.

What is a memorable case or project that you have worked on? 

The most memorable case was a kickback scheme we became aware of due to an anonymous call. Initially, we thought this was an isolated incident, but as we dug deeper into electronically stored information and conducted interviews, we determined the issue was more widespread and involved various levels within the company, including management.

What is your personal motto? 

I'm a lifetime member of the National Association of Black Accountants, Inc. (NABA) and currently hold the position of Immediate Past President of the Chicago Chapter. NABA has the motto of: "Lifting As We Climb" and I have adopted this as my personal motto. With this in mind, I have helped many college students obtain academic scholarships through my role in NABA and have served as a mentor to many young professionals. As I have benefited from others sharing their knowledge with me, I will continue to give back by doing the same.

Read LaToya's full profile in the Career Center on ACFE.com.
 

Are You Being Swindled and Don’t Even Know It?

GUEST BLOGGER

Misty Carter, CFE, CIA
ACFE Research Specialist

If you were to ask business owners how many times they thought one of their vendors ”got one over” on them, the majority would probably say something like, “I trust my vendors. They would never steal from me. I have used them for years and never had any problems.” In a perfect world, that might be true, but unfortunately, we live in the real world and that is just not realistic. I mean, let’s face it — even with the best controls in place, you cannot eliminate vendor fraud. Consider the vendor fraud that occurred against one of the nation’s largest consumer electronics companies, Best Buy. This company, duped by several vendors, lost close to $42 million with the help of a company employee. This employee colluded with several vendors to defraud the company by approving fraudulent online bids. The vendors would bid low and then charge high after being awarded the contract. In fact, over the course of three years, one vendor submitted bids for $24 million in parts, but ended up charging the company $66 million. In exchange for his help in this scheme, the company employee was treated to lavish vacations, given envelopes full of money weekly or bi-weekly, and was even extended a $300,000 “loan” to help his father start a business. Sounds like the good life, right? Well, maybe until you are caught. And yes, this scheme finally caught up with them. 

Many might ask how these vendors were able to steal so much money from this large, publicly traded company for so long before getting caught. According to the defendants (the vendors), it was the company’s fault. They blamed company executives for “turning a blind eye” and having weak internal controls. In other words, it was the company’s fault that they were defrauded. What do you think? Could this fraud have been detected earlier or even prevented if anti-fraud measures had been in place? Based on the outcome, it certainly appears that something was lacking. It’s too late to prevent this fraud, but fortunately for other business owners, the ACFE has a new self-study course to help management in its fraud prevention and detection efforts related to vendor fraud.

The new online self-study course, Auditing for Vendor Fraud, is a great “go-to” guide for anyone interested in learning about vendor fraud and how to conduct effective vendor audits. This course walks you through the process of preparing for and conducting vendor audits, both internally and externally. It offers guidance on what to include in right-to-audit clauses for vendor contracts and is designed to help you learn about various types of vendor fraud schemes and red flags to identify these schemes as you perform vendor audits. 

Read more about the new course at ACFE.com.

Maintaining Strong Ethical Culture is All in a Day's Work

MEMBER PROFILE

Dora Gomez, CFE, Global Fraud Officer, AXA Tech 
Jersey City, N.J.

Dora Gomez, CFE, a native New Yorker, began an early passion for travel, thanks to her parents, and was even a DJ for four years during college. But it was Gomez's passion for fighting fraud that led her to her current position as Global Fraud Officer at AXA Tech.

Where were you born and raised?

I was born in Brooklyn, New York, a first-generation American to Ecuadorian parents. I grew up in a multi-cultural neighborhood, which taught me to build friendships with people of other ethnicities. I also learned to love an array of international foods, which I appreciate to this day. At heart, I am still a true New Yorker.   

How did you become passionate about fighting fraud?

I think I always had the "bug" inside of me to fight fraud. When I worked in public accounting and internal audit I was exposed some cases of fraud and learned how to spot the signs of fraud. It’s vital for the company to have strong ethical principles where employees feel empowered to speak up when something seems wrong. It’s not just about the company’s reputation, it also about working for a company we feel proud to be a part of.

What is your personal motto?

Take risks in life, be confident, and don’t underestimate yourself. I learned that during an expat assignment in Paris. Not only was it an eye opener to learn how the company functioned at the headquarter level, but I also learned about the French culture and those of other European countries. I overcame obstacles (not speaking French, making new friends, working with new colleagues, etc.) but tackled them and learned from that experience. The only constants that I brought with me were my two small dogs … that also learned to bark in French!

What do you consider your greatest achievement to date?

I don’t know if I can actually name one great achievement. I think I did pretty well in my career and personal life for a middle class ‘kid’ from Brooklyn, NY. Let’s face it, being a minority and a woman has its challenges and tackling them requires persistence and determination. I have overcome many obstacles in life (both personal and work related), and I am proud and happy with the person I am today.

Read Gomez's full profile on ACFE.com in the Career Center.

From Sky Diver to Fraud Fighter

MEMBER PROFILE

Rose Karam, CFE, CIA 
Senior Internal Auditor   
City of Cleveland  

Rose Karam is Senior Internal Auditor for the City of Cleveland. While her life’s journey has seen her crisscrossing the country, and following her passions for skydiving, sailing and other experiences, it is her knowledge in accounting to which she returned to build a career. Today, Karam has an intense sense of focus and dedication to preventing and detecting fraud.

Tell us a little about your non-traditional career path.  

I was a skydiver for 15 years, and my husband and I ran a skydiving jumpsuit business for seven years. I made over 1,000 jumps before trying my hand at sailing. We bought, gutted and converted a 40-ft. bus into our home, doing all the work ourselves. We learned welding, plumbing, electrical work and bodywork. Then we began crisscrossing the county driving semi-trucks and delivering freight. Back in Cleveland, I worked at a storage facility renting spaces and moving trucks, setting up the books on the computer and doing taxes. Later I found myself at another non-profit agency as an accountant.

How did you become passionate about fighting fraud?  

While in college, I worked at the main post office and considered becoming a Postal Inspector. This is when my curiosity for investigative work first arose. Later on, I worked for a non-profit agency and heard stories of the woman who had gotten away with a sizeable embezzlement. Reputation was at stake. Despite all the red flags, there was no tightening of controls. I learned that trust is not a control, it’s wishful thinking… I set a goal to gain more knowledge on fraud investigating, which led to my Certified Fraud Examiner (credential).

What are some of your duties as Senior Internal Auditor for the City of Cleveland?  

As a Senior Internal Auditor, I often lead audits and provide recommendations based on my experience or expertise in the field, and provide guidance to newer members.

What are some of the best lessons you have learned through your work experience?  

Positions of trust are powerful fraud weapons. High level positions, little or no segregation of duties, a lack of controls, and absent delegation-of-duties all work to the fraudster’s benefit. Everyone should have to answer to someone because without that control in place the temptation for fraud rises. You need to have a passion for discovery, education and growth – and I consider myself a sponge for knowledge.

Read more ACFE member profiles in the Career Center on ACFE.com.

CFE Works With Technology, Not Around It

MEMBER PROFILE

Jeffrey Meyer, CFE
Vice President, Internal Audit, CBS Corporation
New York, N.Y.

Mining data doesn’t just mean going through boxes of paperwork anymore. Much of an investigation’s evidence is collected online via data that could be hidden away on a hard drive or in plain sight on Excel spreadsheets. Jeffrey Meyer, CFE and VP of Internal Audit at CBS, knows the value of making technology work for him. “One of the challenges I see is embracing technology so that we are working through and with it, rather than around it,” Meyer said. “I spend a lot of time with data mining software so that I’m working with the full population, looking for anomalies that might lead me to answers, as well as more questions to be answered.”

What made you decide to become a Certified Fraud Examiner (CFE)?

In 2009, I attended the ACFE Global Fraud Conference in Las Vegas at the last minute after the only CFE was transferred out of our department. While I was initially skeptical of a fraud conference in Las Vegas, I was impressed by the seminars I attended and the people with whom I networked, so I decided to get my CFE credential and fill the gap in our department.

What ACFE training has benefited you most in your role?

While the benefits have been many, I have specifically benefited from interviewing skills training, which has broader implications beyond just fraud investigations. When I’m wearing my “auditor hat,” I spend a lot of time talking to others and gathering information. If I’m better at interviewing, I can spend less time and get better results.

What were some of the more challenging tasks you’ve personally faced as a CFE?

I’ve had several investigations where local finance and management has tried to do some investigating, including interviewing the suspected fraudster. These cases are challenging in that the “first bite of the apple” has already been taken and therefore removed any element of surprise we might have had. We’re working with our divisions to get us involved at the first signs of suspicion, and that’s reaping benefits for us.

What are some of the benefits/advantages to a company or government agency employing CFEs on its staff?

CFEs bring a different skill set and mindset to an internal investigation that can be critical to a successful outcome. You wouldn’t go to a tax accountant for your annual audit or to a dermatologist if you needed anesthesia for a surgery. These fields, while tangentially related, are not the experts in your true need, so why wouldn’t a company or agency choose the expert in the investigation field?

Please describe your most memorable case and its resolution (to-date if it’s a fresh case). Feel free to use pseudonyms for suspects if the case is ongoing and no judgment has yet been made.

My most memorable case wasn’t glamorous or high profile, but to me it was memorable because the business process worked as it should in identifying a potential fraud. While we prepared for a normal audit of one of our local markets, we got a call from the market’s credit manager, whom I’ll name “Bonnie.” As part of her normal controls, Bonnie was reviewing the accounts receivable aging and making telephone calls to follow up on delinquent accounts. With one small, local business account, the owner told Bonnie that he had paid the invoice, and he even had his cancelled check. Bonnie apologized for the mistake and asked if the owner wouldn’t mind faxing a copy of both sides of the cancelled check so she could correct the error. When she looked at the check, she called for our assistance. The sales person on this account, Henry, had added his name to the payee line of the check, had endorsed it and deposited in his bank account.

Working with our Security Department, I began investigating Henry’s accounts to see if any evidence existed for similar activity, but none did. Henry had started with this market less than two years ago, his first position out of college, so his activity was finite and readily available. When we confronted Henry with our evidence, he broke down and admitted he had taken the check. Through tears as he wrote out his confession, he realized that he might have jeopardized the rest of his career for about $800 of short-term cash, which he had already begun to repay before we questioned him.

Read the full profile in the Career Center on ACFE.com.