A Rough Reality: Fraud Victims and the Road to Renewal

FROM THE ACFE GLOBAL FRAUD CONFERENCE

Courtney Babin
ACFE Communications Coordinator

Shock, anger, depression and bargaining are all victims' reactions to fraud. When someone falls victim to fraud, there are issues that hinder healing — lack of sleep, overworking to earn money back, compulsive behavior and avoiding emotions. “Much is made of the fraudster,” said Andy Wilson, CFE, CCEP, VP Fraud & Compliance, Sedgwick, Inc. “But [the victims] are the real faces of fraud.” In his session at last week's ACFE Global Fraud Conference, “Fraud Victims Speak Out,” Wilson hosted victims of fraud who spoke about their experiences and how they overcame them.

In 2003, Jay Myers, President of Interactive Solutions, Inc., read an article about fraud that stuck with him. At work the next day, he checked his payroll records and discovered a fraud that was being carried out by his director of finance. “I was raised with honesty, integrity and ethics,” said Myers. “When I discovered the theft, it went against how I was raised and I became enraged.” In 2013, Brett Ray, Chief Operating Officer at Integrity Furniture Group, was brought in to assist a small business who was in the midst of investigating an internal fraud scheme. “They were robbing Peter to pay Paul; it was phenomenal,” said Ray. “What started out as an inkling of liberty being taken snowballed into everything they [did] being a lie.”

Fraud victims often say that going through the experience is one of the worst things they have gone through. After losing trust in coworkers, dealing with an unethical culture and losing financial security, victims need to fight to sustain their innocence. Wilson provided 12 steps that victims can follow in order to regain their emotional footing. A few of these include:

• Do not allow yourself to be casually judged. Remember that frauds cost $3.7 trillion annually. Frauds are convincing, hidden and criminal. If you have been defrauded, no one is in a position to judge you.
• Do not live in the past. Learn from the past, but do not dwell on it. Move on with your life and move forward.
• Give yourself time to grieve. Your trust has been violated. When you are defrauded you lose more than your money. You lose your pride, self-confidence and self-esteem.

When it’s time to move on, “You realize that anger can’t be a great strategy,” said Myers. You have had your trust violated, and it’s hard to deal with that. You must have the determination to do the right thing and hold the fraudster accountable in order to prevent fraud from happening in the future to someone else. “One day,” says Wilson, “you will wake up and you will say, ‘let’s move forward.’”

Find more coverage from last week's event on FraudConferenceNews.com.

How to Spot Liars and Achieve Balanced Interviews

FROM THE ACFE GLOBAL FRAUD CONFERENCE

Dick Carozza
Editor, Fraud Magazine

Your key interview subject walks in, removes his coat and takes his seat. You offer him a cup of coffee and begin building some rapport. You immediately begin watching his hands, face and posture. You scrutinize his sentences and ask yourself, “Is this person lying to me? How can I tell?” Your observations and analysis might make or break your case.

“I believe there’s no such thing as a bad interviewee, but there is such a thing as a bad interviewer,” said body-language expert Steve van Aperen during last week's 27th Annual ACFE Global Fraud Conference. “If your questions are not clear and concise during the interview, it will allow a deceptive person to lie.” Also, he said, it’s quite easy to misread visual cues.

He said that all of us lie in 30 to 38 percent of our interactions, and others lie to us or deceive us up to 200 times per day. And we lie to ourselves up to seven times per hour.

Van Aperen said some of men’s top lies are: “I’m on my way,” “I’m at the office,” “I’ll call you,” “You’ve lost weight,” “I didn’t have that much to drink.” Women: “There’s nothing wrong — it’s fine,” “It was on sale,” “It wasn’t that expensive.” Men and women lie with equal frequency, he said, but we can detect men better because they often pause mid-sentence when they lie, and they stutter more. “So women have a distinct advantage over men,” he said.

Though dishonesty surrounds us, van Aperen says anybody can think of a lie but it’s difficult to communicate that lie with believability and credibility. “Interviewees will always express the same verbal and nonverbal cues — I call them ‘leakage’ or ‘seepage’ — but the problem is we don’t know what to look for,” he said. “We listen to the content and structure … but there are other parameters we should look for. … We need to look at contradictions between what they’re saying and what in fact their body language is saying.”

Van Aperen provided several questions we can ask ourselves to assure more balanced interviews:

• Is the person answering your question or sidestepping the issue altogether?
• Is the person answering the question with another question or deflecting?
• Is the person denying or making objections to a question like, “Did you steal that money?” “No I didn’t” (denial) as opposed to “Why would I do that?” or “I don’t need to steal money” or “I’m not that kind of person” or “It’s wrong to steal.” The last statement is a view but not a denial.
• Is the person omissive, defensive, dismissive or evasive (behaviors that are often associated with avoidance)?
• Is there conflict or contradiction between what a person is saying and what their body language is doing (such as nodding his or her head in the affirmative while denying something)?
• Is the person using concealment, blocking or masking gestures such as a hand covering the mouth or face while talking?
• Are verbal statements accompanied by contradictory non-verbal cues of doubt, such as shaking of the head no when stating something is true?
• Is the person exhibiting genuine or fake expressions of anger, happiness, sadness, disgust, contempt or surprise?

“Remember this,” van Aperen said. “For every one lie a person tells you they have to invent another three or four to protect themselves from the first one. Secondly, they have to have a good memory because they have to think, ‘What have I said previously is likely to convict me now.’ ” With the right tools we can spot hard-working liars before they can complicate and obfuscate our cases.  

Find more coverage, videos and photos from the 27th Annual ACFE Global Fraud Conference at FraudConferenceNews.com.

What’s in a Name? How to Reconcile Linguistic Differences in Identity Matching

LIVE FROM THE ACFE GLOBAL FRAUD CONFERENCE

Sarah Hofmann
ACFE Public Relations Specialst

For most people, your name is one of the purest, and easiest, summations of your identity. For those in the business of screening identity data against compliance intelligence information, a name may be the best tool you have to track and prosecute fraudsters around the globe. However, things get complex when you consider the multitude of countries and organizations developing sanction lists using their language’s translations of names.

When dealing with names, anti-fraud professionals must think both about the source language and the language it is being transcribed into. Would a name that originally is written in Russian Cyrillic characters and placed on an Egyptian watch list have the same sound and root name if then translated into English or French? Victoria Meyer, CFE, ACCA, Director of the Swiss Business Academy, discussed this potential problem during her session, “Linguistic Identity Matching” at the 27th Annual ACFE Global Fraud Conference.

“These are all different things you need to take into account to see ‘is this name a match or not?’” she said. “The pronunciation in the different countries is different, so you get different end translations.”

Showing the example of the name, عبد الرحمن حسين , she explained that it has more than five different potential English translations depending on what nationality the Arabic characters are first being translated into Latin characters from. If that name was translated from Yemeni Arabic into English, the translation would be “Abdirahman Hussein (Cabdiraxmaan Xuseen).” If translated from Pakastani Arabic into English, the name would be “Abdur Rehman Hussain.” While these might not be entirely dissimilar, a software program designed to match lists would likely not be able to match them.

Similarly, the same root name in a specific language could translate to different outputs in different languages. Former President of the Russian Federation Boris Yeltsin’s full name is originally written Борис Николаевич Ельцин. However, in French it is translated to Boris Nikolaïevitch Eltsine. In Spanish, it is Boris Nicoláievitch Iéltsin.

The largest takeaway that professionals operating in the multinational sanctions realm need to realize is that to perfect their linguistic identity matching software and processes they must educate themselves on the linguistic patterns and customs of all countries they deal with. For counterterrorism experts, French and German translations of names are starting to come into play more as many refugees have been moving to areas in those countries, and the law enforcement and terrorism authorities are creating watch lists in their language.  

When practicing linguistic identity matching, the onus falls on the fraud examiner to ensure the accuracy of any type of matching software their organization might be using. “This is your risk tolerance you’re setting. It’s not fair to delegate it to someone in IT,” said Meyer. She said that someone well-versed in code and computer patterns, but not familiar with many nuances of international linguistics, would not be able to effectively create a software matching system unless given the patterns and specific triggers to look for from a linguistic professional.

Ultimately, anti-fraud professionals need to be the ones leading the charge in reforming and perfecting multinational linguistics identity matching. Meyer explained that currently, the vendors touting identity matching systems have said, “We know our searches are rubbish, but no one expects any better, so it’s fine.” With the fight against fraud becoming undeniably global in nature, it is more important than ever for fraud examiners to look outside of their own language borders. 

Find conference articles, photos and videos at FraudConferenceNews.com.

How to Master the Edge of Ethics

LIVE FROM THE ACFE GLOBAL FRAUD CONFERENCE

Mandy Moody, CFE
ACFE Media Manager

Ethical dilemmas. We find ourselves in these situations every day. Do I cut the person off in the lane next to me so I can get to work on time? Do I go back and pay for the grapes that were hidden at the bottom of my grocery cart that the check-out person missed? Do I lie about my address on my daughter’s registration forms to get her into a better public school? Do I report the contract work I did on my tax forms?

Just as these ethical dilemmas show up in our personal lives, so, too, do they follow us into the workplace. In the educational session, “Mastering the Edge of Ethics,” John Hurlimann, CFE, Sr. Investigations Manager of Intel Corporation, encouraged attendees of the 27th Annual ACFE Global Fraud Conference to re-evaluate their standards of ethics, recognizing how ethics can be both good and bad for business.

According to Hurlimann, there are many actions a company can take to take an organizational approach to ethics in order to keep employees from taking advantage of any opportunities to commit fraud.

Some of the immediate actions companies can take are:

• If we have heard it once, we have heard it a thousand times: establish a rock solid tone at the top. It isn’t enough to just say you are against fraud, company leaders need to show it. Be present in communications regarding fraud policies, be transparent with findings and hold people accountable. Hurlimann referenced this quote from GE’s General Counsel and Senior VP, Alex Dimitrief, “In my opinion, 10 minutes from a company’s CEO, 10 minutes from the CFO and 10 minutes from the General Counsel at a staff meeting or town hall discussing why integrity is important to a company is worth thousands of hours of training.” 
• Employees have to trust that a reporting network is going to work. You must have a zero tolerance policy on retaliation. Hurlimann said that at Intel they send a simple message back to anyone that reports fraudulent activity that reads, “Thank you for your submission. The action may not be visible to you, but we have reviewed your report and taken the appropriate action.”
• Offer multiple ways for people to come forward. This could be through a hotline, email, letters or in-person; make sure all ways are encouraged and enabled. “Fifty percent of the significant matters that we closed in the European regions was someone walking into our office and saying they had concerns in person,” Hurlimann said. To him, this is an important distinction to make when developing reporting mechanisms across the world. What may work best in one country and culture may not be successful in another.
• Take action when something happens. Hurlimann said that you have to publicly hold people accountable either via coaching, a written warning, termination or reaching out to law enforcement.

Ethical dilemmas, whether personal or professional, will continue to haunt the most respected and dedicated fraud fighters. But, recognizing their presence and creating a clear policy upheld at the highest levels will give employees the knowledge to step away from the top of the slippery slope on which they may one day find themselves.

Read the full article and find more conference coverage on FraudConferenceNews.com.

When It's Okay to Talk to Strangers: Attending a Professional Conference for the First Time

GUEST BLOGGER

Ross Pry, CFE
ACFE Director of Membership

Attending the ACFE Global Fraud Conference for the first time can be exciting, but also intimidating. With more than 3,000 fraud fighters, 70 breakout sessions, a hall full of exhibitors and the sights and sounds of Las Vegas just a few steps away, where do you start?

I recently spoke with Eric Strom, CFE, who provided advice for first-time conference attendees. Eric will be attending his 11th ACFE Global Fraud Conference this year.

When was your first ACFE Annual Conference? Where was it?
The first conference I attended was the 17th Annual ACFE Fraud Conference in Las Vegas.

What keeps you coming back?
The opportunities to network with different professionals (private sector, legal, law enforcement) who are all involved in fighting fraud is unmatched at any other event. 

What tips would you offer to first time conference attendees?
Bring plenty of business cards and make a point to talk with strangers at every opportunity. After the event, keep in contact with your new friends because they can help with your investigations.

What are the “can’t-miss” events to go to at the conference?
You can't miss the Networking Reception and the closing speech by the fraudster.

There are so many breakout sessions to choose from. How do you pick which ones to attend?Typically start with your track (audit, investigations, legal, etc.) and then branch out if you've already taken a course or if something looks interesting in another track.

What three things should you definitely bring with you to the conference?
Business cards, a cell phone camera to take photos of interesting PowerPoint slides and mouthwash. :)

What is one piece of advice you have for first time attendees to help make their conference a success?
Get out of your comfort zone. Don't hesitate to introduce yourself to someone new and share your passion with them.

Whether this is your first, 11th or 27th ACFE Global Fraud Conference, there are always exciting educational sessions to participate in, connections to make and ideas to take home. I look forward to seeing you in Las Vegas! 

Plan your conference at FraudConference.com.