CFE Syndrome: How Investigating Can Lead to Paranoia

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FROM THE ARCHIVES

Annette Simmons-Brown, CFE
Government Analyst, State of Florida

“Second Year Syndrome” is the malady of medical students who experience the symptoms of the disease that they are studying at the time. If they’re studying skin cancer, suddenly that zit becomes melanoma. If they’re studying arthritis, their joints start to ache. If they’re studying narcolepsy, they suddenly feel they’re about to fall asleep. (That last might be attributable to being grossly overworked, but you get the idea.)

I’ve been a Certified Fraud Examiner for more than six years now and I worked in the field of financial crime prosecution longer than that. I can testify that our Association’s version of Second Year Syndrome, “CFE Syndrome,” is real, it is alive, and it can permanently take over your life. CFE Syndrome is the belief that the CFE is about to become the victim of the type of fraud scheme she is examining at the time, and it can turn the most reasonable, common sense-driven CFE into a sullen, twitching bundle of suspicion.

Here are a few examples of how my work as a CFE has shaped my approach to my own affairs and my social relationships:

  • When you work in financial crime prosecution, you’re going to see a lot of embezzlement cases. The loss amounts can range from a few thousand to several million dollars. In 2015, after having worked literally dozens of embezzlement prosecutions and becoming pretty jaded, I was assigned a case in which the office manager of a large property management company deftly embezzled more than $1.3 million. Through a variety of standard tactics, she issued checks to herself from the company’s main account and trust accounts for the client properties, executed online transfers to herself from these bank accounts, used the company credit card for personal purchases, intercepted tenant payments and lapped the books, and so on. The weekend after the embezzler was charged I got a call from my sister, who along with her husband also runs a property management company, telling me about some softball game my nephew won. I responded by panic-coaching her to immediately look over all of their business accounts, bank statements, credit card statements, invoices and outvoices, and DON’T TRUST ANYONE ELSE TO DO THIS! I know my sister was staring at her phone trying to see the nutjob who was trapped inside it, but I am proud to report I managed to imbue her with my wholesale paranoia, and she went and performed her own audit. At least that’s what she texted me.
  • In 2009 and 2010, after working two eerily similar cases in which fraudulent real estate documents transferring title filed at the county property recorder’s office were prominently featured, I learned how easily this was done, given that the county recorder’s office does not verify the truth of the document submitted for recording. I also learned what a nightmare it was for the true owner of the property to unpack and correct the damage wrought by these false filings. From that point on, I checked the online title history on my own house at least once a month, and I do so to this day. CFE Syndrome may be a form of crazy, but it does breed discipline of habit.
  • Reviewing and analyzing financial records is a CFE’s lifeblood. After analyzing untold thousands of pages of bank, credit card and investment account records and seeing how near-invisible fraudulent transfers can be, a daily morning check of my bank, credit card and investment accounts online – both balances and activity — is an article of faith. This, and retrieving the annual credit report, are standard recommendations to protect against identity theft. However, it should be noted that several hours after a recent morning online check, I got multiple fraud alert notifications from one of my credit card issuers. In talking with the fraud call center representative, I learned that my credit card had been hacked that afternoon by a shopaholic in Miami and by at least one prison inmate in Alabama trying to make a phone call. These were attempted uses only. The fraud-detection systems within this credit card company are frighteningly good, the transaction attempts were slammed shut, and I applauded their fast and effective action.  

If a carpenter is a carpenter long enough, everything becomes a nail which she must be ready to pound flat and senseless into the wood. After seeing the devastation financial crimes and fraud schemes quietly inflict upon their victims, and after seeing the nondescript, ordinary visages of the fraudsters, and these fraudsters’ perfect indifference to the destructiveness of their actions, I am on financial high-alert around the clock. I will never not drown my loved ones with my cautionary tales and hysterical helpful hints on how vulnerable they might be to frauds — both little and big. And I will never look at people, including many I might heretofore have wholly trusted, the same way again.

Find more articles and videos from the ACFE's monthly newsletter, The Fraud Examiner, in the online newsletter archives.