Episode Notes for Fraud Talk: 'The Problem With Too Many Choices'

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GUEST BLOGGER

Emily Primeaux, CFE
Associate Editor, Fraud Magazine

In January I had the pleasure of interviewing Bret Hood, CFE, about using data analytics in fraud examinations and the problem of “choice paralysis.” Currently the director of 21st Century Learning & Consulting and a retired FBI supervisory special agent, Hood has spoken at ACFE Annual Global Conferences and is a federal court-recognized expert in fraud and money laundering.

Hood recently wrote an article for the January/February 2017 issue of Fraud Magazine about choice paralysis using a grocery store study. In the article and on the podcast, he explained that this study helped highlight that when people are given too many choices, they freeze and can’t make a decision. The same can happen when a fraud examiner approaches an investigation using data analytics.

Data analytics software can produce an endless amount of data — some usable, others distracting. In the podcast, Hood explained that it’s important for fraud examiners to determine which data sets are relevant. “If we’re doing a billing fraud, I should only be concerned with the billing and not something else,” Hood said. “So if I have billing fraud, I don’t necessarily care about accounts payable. It depends on what kind of billing we have, but what happens is when we start to focus on other things, when we start to take the divergent path, that distracts us from what our original purpose is.”

Other highlights from the interview include:

  • Recommendations for how fraud examiners can overcome choice paralysis, including prioritizing three things that are relevant to your case, focusing on those and fighting the urge to move down other paths as they become present.
  • An analysis of how the brain processes information, including a look at your “working memory.”
  • System 1, the reactionary part of your brain, versus system 2, the reasoning part of your brain.

You can listen to Hood’s entire interview at ACFE.com/podcast and join the discussion about the podcast in the ACFE Community.

Helpful Resources Mentioned in This Episode

How to Conduct Yourself as a Fraud Examiner in Qui Tam Cases

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GUEST BLOGGER

Courtney Babin
ACFE Communications Coordinator

Fraud examiners play a vital role in qui tam lawsuits. According to Whistleblowers.org, "any persons or entities with evidence of fraud against federal programs or contracts may file a qui tam lawsuit.’" The person(s) that bring forward the lawsuit are called “relators,” or are most commonly referred to as whistleblowers. A relator is someone that has worked inside a company and has knowledge that fraudulent activity is being committed. Typically, the relator has tried to get the issue resolved in-house, but for whatever reason has obtained outside counsel. This counsel helps the relator file a lawsuit in the federal court system on behalf of the government. Once the relator’s counsel contacts the government and informs them of the lawsuit, the government then decides whether or not to intervene.

In qui tam cases, having a subject matter expert on your case is crucial; this is the role of the Certified Fraud Examiner (CFE). An expert can make or break the case. “I’ve met experts that have knowledge (or credentials), per se, but they don’t know what they are doing or how to communicate,” said Eileen Leslie, CFE, CPA, Financial Analyst at Forensic Strategic Solutions. “A seasoned Certified Fraud Examiner, especially one focused on forensic accounting, has the education and experience needed to be able to detect and understand an unlimited amount of fraudulent scenarios. But that’s only the beginning.” Leslie shared this and other lessons recently in a Fraud Talk podcast interview, "The Role of a Fraud Examiner in Qui Tam Cases."

She goes on to explain that the CFE is there to first and foremost calculate the single damages. Single damages are the losses sustained as a result of fraud.  “It’s my job to obtain a thorough understanding of the issues to perform an unbiased analysis of the facts and make sure all necessary parties understand my damages calculations and findings,” said Leslie. It is important to calculate damages properly because the government uses that number in their negotiations (the government is allowed to go for three times the amount of the single damages).

Another important role of the fraud examiner is to make the case extremely understandable. “To truly be effective you must have the ability to articulate your findings to people of all understanding and interest levels,” said Leslie. “My personal belief is that as an expert you conduct yourself in an expert manner. I want to conduct myself in having full knowledge of the issues. I want to be unbiased. I want to look at just the facts.”

As a fraud examiner and expert in this matter, you need to prepare your case in a way that convinces the government to intervene. When a case is brought before an attorney, keep in mind that this attorney may have never been exposed to the law or rule that is being violated. It’s important to explain the case easily so that they can process the case appropriately. You can assist them by:

  • Knowing the rule or regulation that has been violated.
  • Providing a printed copy of the rule to the government.
  • Articulating the violation from the relator in a manner that is understandable by judges and juries.
  • In a binder, supplying supporting back-up documentation in a structured manner.
  • Preparing a visual PowerPoint presentation with diagrams and graphs.

Above all, said Leslie, “Please be responsible. Be real in your expectations of what you can do. Find somebody that has the experience to be able to guide you appropriately so that you are gaining a full understanding of the issues at hand. Be credible, go by the facts, be responsible and make sure that [everything is] right.”

To hear Leslie’s full podcast interview, visit ACFE.com/podcast. 

New Year's Resolution #3: Continue to Go Mobile

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#3:  PROVIDE MORE MOBILE OPTIONS FOR ACFE MEMBERS

There are a handful of things I rarely leave home without: my wallet, my keys, my cell phone and my daughter. And, yes, those are listed in ascending order of importance. There are even days when making it out of the house with all four seems impossible, but thank goodness it is usually the first three that I end up searching for the most before heading out the door. Who knows? Maybe in a few decades my cell phone will be all I need to access my credit cards, keys, contacts and…baby. Maybe not.

We know your lists are pretty short when it comes to the vital things you need to start and finish your day. That is why in 2012, we created a few mobile resources for you to access while bustling from meeting to boardroom to home and back again. In July, we offered members a new Fraud Magazine mobile application (app) to make reading the bimonthly publication as easy as possible. The free app, available for the iPad, iPhone and Android smartphones, gives you complete access to the current issue as well as multiple back issues of the magazine directly on your favorite mobile device.

In September, we launched a new monthly podcast, Fraud Talk, to give you case studies and news you could hear and download from anywhere you have Internet access. We wanted to offer a free tool for you to use when commuting, traveling or driving. We also wanted to give you archives that you could access when most convenient for you and your schedule.

And, we are now excited to announce that in the next few months we will unveil a new ACFE app to make maintaining and accessing your ACFE membership even easier. The app will give you access to your ACFE account information, anti-fraud resources currently only available on ACFE.com and the ability to purchase training materials and register for events.

With ACFE membership mobile options you don’t have to remember another thing to add to your short list every morning. Stay tuned tomorrow for our #2 New Year’s Resolution for 2013!

5 Ways to Stay Up to Date on Anti-Fraud News and Resources

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GUEST BLOGGER

Ross Pry, CFE
ACFE Membership Director

In the almost seven years that I have been with the ACFE I have enjoyed a lot of “firsts.” I have gotten married, bought a house and earlier this month celebrated my daughter’s first birthday. Through her first year of life, I’ve been fortunate enough to see what pure joy looks like, and it was on full display as she devoured her birthday cake. With icing covering her hands, face and even the wispy hairs on the back of her head I was reminded of how much fun it is to experience something new.

I recently became the Director of Membership and am excited to be back in the department where I “first” got my start. We strive to provide members with great benefits and, as a staff, we are always looking to improve the member experience. With our members in mind, we have recently created the following new benefits:

  • Free webinars: This past year, we hosted seven free hour-long webinars for members to earn CPE credit. You can listen to the archives here. We have also recently launched free career-related webinars through the ACFE Career Center.
  • Free white papers: Industry-leading companies provide us with white papers that cover a variety of topics, including industry-specific trends, case studies on famous frauds and new technology to help in the fight against fraud. Check the Fraud Magazine website regularly updated white papers.
  • Podcasts: The ACFE just launched Fraud Talk, interviews with the industry’s leading experts addressing fraud issues, providing insight on case studies and new tools to aid in the detection and prevention of fraud. You can listen to the podcast online, or download it as an MP3 file. Bookmark this page and check back monthly for updated content. 
  • Resource library: For a centralized location of ACFE resources, click here for videos, publications, reports, sample documents and tools. The ACFE also publishes reports like the 2012 Report to the Nations and the Compensation Guide.
  • Training materials: We recently created an employee training program for CFEs to teach about common types of fraud, the warning signs of fraud and what to do if employees suspect fraud. Fraud’s Hidden Cost to You and Your Organization is a downloadable training video, workbook and slide set to help educate employees about fraud.

We look forward to continuing to serve and support our members with their careers, and as the ACFE continues to grow so does our focus and commitment to members.

ACFE Launches New Monthly Podcast Series, Fraud Talk

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AUTHOR’S POST

Mandy Moody
ACFE Social Media Specialist

Trying to define a podcast to my mom was like trying to show my grandma how to use the DVR for the first time: challenging, to say the least. So, I decided to simplify it for her. I told her it is like listening to your favorite radio morning show, but you don’t have to deal with the annoying ads or the constant preteen requests for the latest Justin Bieber song. What you do get is a dedicated 10-20 minutes of relevant dialogue about a topic you care about; a story you can’t wait to hear the end of; and a mobile resource you can download and listen to anywhere. These are the benefits we hope you enjoy when you listen to our new monthly podcast, Fraud Talk.

One of the biggest requests we consistently hear from members is an interest in more case studies. This month, in response, we dedicated a full Fraud Magazine issue exclusively to case studies and decided to dissect one in our inaugural podcast. In these sessions we want you to not only hear the details of how a fraud went down, but also the ways it was discovered and the lessons learned.

In our first episode, we talked to Jay Dawdy, CFE, CMA, and president of Gryphon Strategies in New York, about a case he contributed to our new Bribery and Corruption Casebook. He will take you inside a fraudulent purchasing and billing scheme at a small business and break down each step of the process, from suspicion to litigation. The cool part about Jay’s story, though, is that he and fellow investigator, Angela Clancy, CA, didn’t stop at a conviction. At the request of the business owner, Jay and Angela went after the money and in the end recovered $3 million of the original $4.4 million lost to fraud.

Want to know more? Listen to the full episode or download the podcast at ACFE.com.