Webinar: How Our Implicit Biases Affect Investigations

GUEST BLOGGER

Emily Primeaux, CFE
Assistant Editor, Fraud Magazine

Imagine you’re driving a car and suddenly a squirrel darts out in front of you. What is your immediate reaction? You’ll swerve or break — or you may even accelerate. Do you think about swerving or braking in the split second that the critter crosses your car? 

Let’s continue with the car example, but now you’re deciding to buy one. You spend time researching makes and models, and most likely, prices. Do you actively think about doing this research before going to the dealership?

These are the two examples that Bret Hood, CFE, Supervisory Special Agent at the FBI, used to explain the two systems of thinking as described by Daniel Kahneman in his book, “Thinking, Fast and Slow.” Hood described these scenarios in his top-rated session, "Why Let the Truth Get in the Way: How Our Implicit Biases Affect Investigations,” at the 27th Annual ACFE Global Fraud Conference in June. You can catch a rebroadcast in webinar format tomorrow at 11 a.m. EST. (And, you can also earn any lingering ethics CPE you need to complete for 2016).

In the first example with the squirrel, you’re reacting with a routine behavior that you don’t even think about. This is system one. In the second example at the dealership, you’re thinking before you act. This is system two.

“You spend more time in system one,” said Hood. “And that’s where your blind spots are.”

Hood went on to explain that these blind spots are implicit biases. Basically what this means, he explained, is that no matter what happens around us, our minds are consciously evaluating stimuli and making choices. These biases are going to impact your experiences — you can be primed in certain ways.

This happens because system one is far more efficient than system two. Before you have a chance to assess any situation, system one is leading you to a decision. And the more experience we have, the more likely we are to fall victim to implicit biases.

“If our implicit biases play a role in reaching the conclusion, this has a profound effect on the rest of the investigation,” said Hood. In a fraud examination, if you decide ‘I know this person did it,’ it’s hard to step away from that idea.

Hood explained that acknowledging that you might be susceptible to implicit biases will help you notice when your behavior and actions are being influenced by those same biases. “If our goal is to find the person who is responsible for the crime, acknowledging our own biases and finding ways to mitigate them will lead us to the person we truly seek.”

Find out more about Hood's webinar, which will air tomorrow at 11 a.m. EST, as well as three other top-rated speakers to be featured over the next three weeks in the ACFE's All-Star Webinar Series.

Fraud in Capital Projects and the Construction Process

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Denise Cicchella, CFE, CIA, CCA, PMP
CEO, Auspicium

Tishman, Bovis Lend Lease and Structure Tone are companies known around the world for their quality craftsmanship and superior quality of work, but now they are becoming known for other qualities they hope will soon be forgotten. In many construction projects, whether residential or commercial, there is money doled out to a contractor that is not earned. But over the past few years, we in the industry are seeing construction fraud schemes hit the headlines more and more.  

Take the following examples:

• City's Construction Giants Face Criminal Probe for Billing Fraud, WNYC News
• Contractor Agrees to Pay $19.6 Million in Fraud Case, The New York Times
• Building Firm Pleads Guilty to Defrauding Its Customers, The New York Times

The benefit, if there can be a benefit from fraud, is that organizations and owners are using this as an opportunity to look for fraud, find errors and more tightly control their projects. It is no longer an environment of, “Yes, I know it is happening but what choice do I have?” It is an environment of, “Yes, I know it is happening, now what can I do to stop it or to minimize my losses?”

Some of the top areas for fraud in construction projects are duplicate payments, conflicts of interest, padded billing, fictitious vendors and payroll fraud in the form of ghost employees. Statistics on fraud versus error might be skewed, as owners are more interested in recovering money than pursuing prosecution. With that said, construction fraud and procurement fraud are still high ranking in the ACFE's Report to the Nations.

I, for one, have taken a stance to educate and train organizations about how to audit capital and construction projects, what to look for to identify a project as a problem, and the next steps to take when recoveries do not go their way. I have seen organizations take a more proactive stance in project involvement, and I have seen auditors, construction auditors or operational auditors take more of a position to question why things happen rather than just blindly accept what is said. With these steps forward, I am hopeful that we can reduce the prevalence of fraud and error in capital projects.

You can learn more about fraud in capital projects and the construction process by attending my upcoming ACFE webinar, Fraud in Capital Projects and the Construction Process, September 25, 2014, at 2 p.m. EST. 

Finding a Needle in a Haystack

AUTHOR’S POST

Mandy Moody, CFE
ACFE Social Media Specialist

Looking for a needle in a haystack is best only used figuratively. No one actually wants to spend a Saturday afternoon digging through haystacks for fun. But what if finding that needle saved you time and lots of money? And, what if you had special tools that helped you isolate the needle, amplify it and find it in a fraction of the time it would normally take? What if you could even predict where that needle would most likely be before you stepped on it and felt its effects?

That’s exactly what many data analysts are doing with predictive analytics software designed to detect patterns, anomalies and trends associated with fraud. Tomorrow, May 30 at 2 p.m. EDT, the ACFE will host a 100-minute webinar detailing how fraud examiners can use Predictive Analytics to Prioritize Investigations and Audits of Contract Fraud, Waste and Abuse. Two speakers from Elder Research, Inc. will detail exactly how predictive analytics can help find those needles in the haystacks.

You will walk away knowing how to:

• Define predictive analytics and the myths associated with it
• Start a data mining or predictive analytics group at your company
• Help your organization prioritize high-risk leads or audits for investigators and auditors by using predictive analytics
• Use predictive analytics to produce high ROI by focusing agents and analysts on cases with higher probability of being fraud, waste or abuse

You can learn these lessons and more at the webinar tomorrow at 2 p.m. EDT. If you can’t make it tomorrow and will be attending the 24^th Annual ACFE Global Fraud Conference in Las Vegas next month, be sure to add this session to your schedule.

Read more about the Predictive Analytics webinar and register today.