LIVE FROM THE ACFE GLOBAL FRAUD CONFERENCE
Dick Carozza, CFE
Editor, Fraud Magazine
“What’s critical about your organization and reputation,” said former FBI Director Louis Freeh during the Monday Working Lunch, “is the interaction and interconnectivity that you bring between the government and the private anti-fraud community and establishment. That did not exist for many years for the most of the history of the FBI.”
Freeh said during his FBI tenure he often had ACFE members accompany him and become heavily involved in investigations. Now as chair of Freeh Group International Solutions, LLC, a Pepper Hamilton LLP group, he continues to closely work with Certified Fraud Examiners (CFEs).
Freeh, during his keynote, shared some of the lessons he learned during his FBI tenure and extolled the virtues of ACFE members.
“One of the biggest things that has changed is the technology that is available to investigators,” he said. “I just spoke at the second circuit [judges’] conference in New York. And the theme of all the judges in that circuit was the impact of technology on being a judge and particularly focusing on cyber crime, cyber technology and cyber terrorism. There were a number from leading technology companies giving insights as it impacts judges — judges who have to explain complicated cases to juries but also have to understand the provenance and integrity of evidence, which now comes from different platforms.”
Freeh reminisced about the state of technology in 1975 in the New York City FBI office. “In one case, we had … to surreptitiously record an organized crime guy’s conversation so we called our lab and we asked for the best cutting-edge technology they had. So they sent up a pair of shoes. The microphone was embedded in the shoes! Probably they were 12 ½ quadruple E shoes. And the first statement by the subject on the tape was, ‘John, what’s the matter with your feet?’ ”
Though technology is now light years from 1975 microphone shoes, some things have not changed, Freeh said. “The most important ‘value add’ that [ACFE members] bring to the anti-fraud community and the law enforcement community is … incredible experience and depth.
“It’s not a coincidence that two of your largest government communities [with ACFE members] are the IRS and the FBI. Because the synergies and the ability to share information there is unprecedented in our history,” he said. “You bring, I know from my own investigations, and sitting on boards, tremendous credibility because of your education, your certification, your reputation is just a sterling contribution to the anti-fraud community and the efforts that you bring on behalf of private clients and corporations,” Freeh said.
“Many of you work for the government by contract or otherwise and that information and that relationship is a very, very special one. It evolved over a long period of time. And the Bureau has evolved over a long period of time,” he said.
“The disability that the Bureau, and most government agencies have, is that they tend to react to external changes and tend to train, equip and pass statutory authorizations as a result of things that are coming to them from the outside as opposed to proactive, inside innovative thinking,” Freeh said.
He said the first FBI bureau investigators in 1908 — Treasury Department employees — weren’t gunslingers or bank robbery investigators; they were accountants. “They had no weapons; they had no authority to arrest anybody. That didn’t come until 1933. But it evolved due to the necessity of dealing with financial crime.” Then more outside changes influenced the FBI to investigate bank robberies, organized crime and narcotics, he said.
He said that after 9/11, counter-terrorism has become the necessary, but totally, consuming preoccupation of resources and programs and statutory authority. “Now, finally after the recession, the programs and the focus on serious global economic crime and cybercrime have been resuscitated,” Freeh said.
You can find more coverage from the ACFE Global Fraud Conference at FraudConference.com.