corporate fraud investigation

It takes a team to conduct an effective corporate fraud investigation / employee theft investigation

December 3, 2010 by Staff Editor Leave a Comment

If you are suspicious that an employee had stolen from your company, embezzled money, where do you start to try to resolve the issue? Many managers / owners will first call their CPA or resource for accounting. This is a great start. Trained CPA’s who know how to find fraud can trace issues in the books and build a case of evidence that will likely lead to a suspect or suspects. Sometimes that CPA will even be fraud certified and have the CFE designation (and there are others).

So now that you have some evidence and a suspect or suspects, does the accountant interview them? Do you interview them? Do you call your attorney to interview them? Maybe one or all of the above.

To conduct the best possible corporate fraud investigation consider hiring a corporate fraud investigator who will work as a link in the chain of the investigation. The corporate fraud investigator should have training from an organization such as John E. Reid & Associates, Inc., and carry certification to prove it. But the training alone is really not where the effectiveness lies, it is the experience of conducting not just one corporate fraud investigation but hundreds.

The professionally trained corporate fraud investigator will conduct interviews and move on into interrogations to obtain written confessions. This is the bow on top of the work that the CPA, management and Law team have all put together, but may not have the expertise to hit home. A mistake in the corporate fraud investigation can mean no criminal, civil cases can be filed and there is no hope of recovering losses.

For more info regarding hiring a professional corporate fraud investigator visit: corporate fraud investigation.

CORPORATE FRAUD INVESTIGATION- THE UNKNOWN FACTS – Atlanta Georgia

November 22, 2010 by Staff Editor Leave a Comment

A corporate fraud investigation is much more complicated than many of us think. I’ve been in corporate America for years and did not understand the intricacies of how the investigation of wrongdoing is conducted in a large corporation. Or even who conducts that investigation.

The first intriguing fact is that a corporate fraud investigation is not only a private affair but involves the help of many federal agencies, including the Internal Revenue Service. This is because the violations that are usually being investigated are in relation to the Internal Revenue Code and related statutes.

These crimes of corporations usually involve senior executives. People who investigate these crimes must be able to concentrate on and understand the intricacies of high corporate finance and accounting. The most prevalent law that prevents violations of the Internal Revenue Code is Sarbanes-Oxley. This act imposes stiffer sentences of up to 20 years in prison for the destruction, alteration or falsification of records in order to impede a federal investigation.

In 2010 there were 116 corporate fraud investigation s initiated. Of those 116, 91 of those recommended that someone be prosecuted. There was actually a 77% incarceration rate of those 116 investigations with senior executives serving an average of 48 months. This information comes from the Criminal Investigation Management Information System.

Need advice on a corporate fraud investigation. Contact us or call 1.770.426.0547 – Atlanta Georgia

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CORPORATE FRAUD…HOW COMMON IS IT? – Atlanta Georgia

November 15, 2010 by Staff Editor Leave a Comment

Corporate fraud schemes cost the United States billions of dollars every year. With hundreds of different fraud schemes out there it’s hard to determine the exact cost to companies across the nation. Believe it or not there are two specific types of corporate fraud involving insurance companies that all these schemes fit into…very simply hard versus Soft fraud. Both require a corporate fraud investigation.

Hard fraud schemes are meticulously planned out. As an example of a “hard” fraud scheme, setting an arson fire to collect insurance money on a building. Most organized crime rings have some sort of hard fraud scheme game they are into. It can be setting up auto accidents or even as intricate as an auto theft ring.

Soft fraud is much more common in the scheme of the general world population. Soft fraud is committed when an individual has an “opportunity” to exploit what might actually be a legitimate insurance claim. A soft fraud also requires a corporate fraud investigation.

Let’s look at an example of soft fraud. So this giant clunker, rusted, beat up car pulls in behind you in a parking lot. You don’t see the car. You back right into it!! Wow. Aren’t you surprised when your insurance adjuster informs you that the small dent you thought occurred has turned into replacing the entire rusted front of this jalopy. The person you hit has taken an “opportunity” to scam more money from your insurance company than is rightfully theirs. And voila, you have corporate fraud the “soft” way.

Do you think that corporate fraud is occurring in your business? Contact us at corporate fraud investigation or call 1.770.426.0547 – Atlanta Georgia

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Who Commits Employee Theft? – Atlanta Georgia

November 10, 2010 by Staff Editor Leave a Comment

At this point we all know that employee theft goes on in every organization. However, the million dollar question still remains: who will it be? I was told once of an old accepted truth within loss prevention circles. It’s called the 10-10-80 rule. What this rule basically states is that 10% of people will never steal, no matter the circumstances. 10% of people will steal given their first opportunity and continue to do so at every chance they get. 80% of people can go either way depending on how they rationalize the opportunity and access the risk involved. It is our job to sway the thinking of that 80% to believing that it’s just not worth it.

Statistics show that younger employees tend to steal far more often than older ones. Before you go putting the kibosh on your hiring of the under 30 crowd, statistics also show that when older employees do steal they tend to steal a lot more than their younger counterparts. Managers who have been employed for over 3 years are the usual culprits when it comes to employee theft . They’ve been around long enough to know the system inside and out, including any loopholes that might exist. Often they may be disgruntled or consider themselves underpaid, under-appreciated or both.

Most employee theft comes to the attention of the employer by another employee or strictly by some sort of accident. On average it can take up to 18 months for an employer to catch an employee that has been stealing. Imagine how much damage one person can do in that amount of time. A smaller business is less likely to be able to absorb that type of loss when it happens. There are a number of cases where the theft of one individual has driven a small business into bankruptcy. The fact is that anyone can commit employee theft , so you must be vigilant in your efforts to identify them.

For more information about employee theft investigation or corporate fraud investigation contact us at employee theft or call 1.770.426.0547 – Atlanta Georgia

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Why you may want to seek help from a Corporate Fraud Investigator

October 15, 2010 by Staff Editor Leave a Comment

If you are aware that your business is suffering from internal theft you likely have a CPA or CFE working on gathering accounting evidence to identify the source of the problem, maybe you contacted an attorney to lead the quest or play a role. What you may not be aware of is the option to contract hire a corporate fraud investigator as a link in the chain of your corporate fraud investigation, or how they fit with the experts already on the task.

Typically a good CFE (Certified Fraud Examiner – usually a CPA with specialized training and certification) will find the forensic evidence needed to point towards suspects. This is similar to how an attorney gathers evidence and information to build a case that he or she believes will win the favor of a judge panel or jury in court.

A good corporate fraud investigator with a loss prevention background will often come into play when interviewing employees and or interrogating suspects. This specific skill set is based on training from organizations such as the John Reid & Associates Institute or Wicklander – Zulawski & Associates. These skills lead the corporate fraud investigator to orchestrate interviews in a particular order and style based on the evidence compiled by the CPA – CFE etc… The results are written confessions through non confrontational techniques and a complete case file that can be handed over to authorities ready for processing in criminal court if desired.

Calling a corporate fraud investigator up front may help avoid some costs in the overall process depending on the experience of the CPA and or attorney on the case. The trained investigator can help guide the investigation offering some specific direction to the team that will reduce the amount of time necessary to land on a confession. This saved time means saved dollars spent on hourly fees etc…

For more information visit: corporate fraud investigator

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The Evils of Corporate Fraud

October 12, 2010 by Staff Editor Leave a Comment

You want to know about corporate fraud ? Well you have but to look in the direction of one of the biggest scandals of the last decade: Enron. In October of 2001 the company announced a $638 million loss in third-quarter earnings. The next month they publicly admitted to overstating earnings for the past four years by $586 million. As a result the company’s stock plummeted costing thousands of employees their jobs, retirement savings, 401K plans, etc. You would think that such a debacle would cause companies to stand up, take notice and put necessary safeguards in place, but in fact statistics indicate that corporate fraud is still on the rise today.

The number of fraud cases between 1998 and 2007 have increased compared to the previous 10 year period. The most common fraud techniques are improper revenue recognition (lying about how much money you made) and overstatement of assets (lying about how much your company is actually worth). The most common motives for this fraud are the need to meet internal/ external earnings expectations, an attempt to hide the company’s financial condition and, my personal favorite, the desire to increase management compensation (ie. I lied so it would look like I was doing a good job and therefore I could justify receiving a raise).

The long-term consequences of corporate fraud are bankruptcy, material assets sales and possibly de-listing from a stock exchange. However, the individual commits this type of crime is motivated to do so by short-term goals. Most CEO’s and CFO’s have their compensation tied to the company’s short-term stock performance so it is in their personal best interest to make things seem brighter than they really are. The fact is that until the boards of directors are held responsible for their actions corporate fraud will persist.

For more information about employee theft or corporate fraud investigation contact us about Corporate Fraud or call 1.770.426.0547

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Reasons you may want to get help with an employee theft investigation

October 11, 2010 by Staff Editor Leave a Comment

There are reasons why you may want to get help with an employee theft investigation and by help I do not mean calling the police (I’ll get back to that).

When you get an idea you may have a problem with internal theft you likely have a rush of thoughts and feelings about what is happening to you/ your business and maybe even some thoughts about specific employees you feel may be suspect of internal theft. Often times business managers and owners make the fatal mistake of reacting in a way that alerts the thief and allows them to cover tracks and or prepare themselves for accusations. Sometimes the knee jerk reaction is to point fingers at employees too quickly, those who are innocent. These reactions can cause some damage to the team and effectiveness of any organization.

Back to the police…calling the police before you have a proper case documented including a written confession can blow your chances of ever getting justice. Police are simply not trained to be experts at internal theft / corporate fraud and they are not likely to conduct a corporate fraud investigation or employee theft investigation when they have piles of dangerous criminals committing crimes regularly, missing children to find and so on. It is simply a matter of not being a priority and I do not mean that in a negative way against law enforcement in any way.

Hiring a professional for your employee theft investigation who knows how to build a rock solid case with proof including getting written confessions is a very smart and cost effective way to get solutions. And it insulates you from the employees protecting you from creating uncomfortable feelings with your good employees in the process.

To learn more visit: employee theft investigation

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Corporate Fraud Investigation – Integrity at the highest levels

October 1, 2010 by Staff Editor Leave a Comment

Executive leadership is not exempt from Corporate Fraud Investigation. The Sarbanes-Oxley Act of 2002 details the audit and management procedures of the corporate environment and is a reference used in Corporate Fraud Investigation.

Corporate Fraud can completely decimate a company. One need only look at the early 2000’s and the likes of Enron, WorldCom, MCI and others. These companies dissolved as the result of Corporate Fraud and the Sarbanes-Oxley Act was created.

Corporate Fraud Investigation looks at all aspect of fraud, not just at the executive level, but at all levels. A story that floats around most loss prevention, and investigation firms and organizations is of a lone accounts payable employee that took advantage of a payment opportunity using her husband and his construction business.

This accounts payable employee working out of the corporate office was directed to cut a check for payment of construction services performed at one of the retail locations. She created a check for about $14,000 and mailed off the check to the construction company. Quickly, she saw an opportunity to make some fast cash and decided to send a second check in the amount of $14,000 to the same construction company. She then calls this construction company and tells them that her office “accidentally” sent a second check. She asked the construction company to send the second check back to her attention. Upon receipt of the check, the accounts payable employee had her husband endorse the check and deposit it into his business account. Later they planned on transferring the money to their personal account.

Had it not been for the thorough investigation, this accounts payable employee would have been $14,000 richer. Instead, after a forensic accounting analysis, the employee faced prison time.

Corporate Fraud is a covert business. It can be controlled with a proper oversight committee and a checks and balance system involving Corporate Fraud Investigation.

For more information visit us at corporate fraud investigation or call 1.770.426.0547

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Are You Paying For Illegal Drugs? Corporate Fraud Investigation In Atlanta

September 26, 2010 by Staff Editor Leave a Comment

In the course of my career as a corporate fraud investigator I have found that when conducting a employee theft investigation approximately 30 % have involved illegal drugs in some form or fashion. The person committing employee theft used the proceeds for the purchase of illegal drugs.

In some cases when an employee has a drug dependence they do not want their spouse, parents or friends to know. They need money because their paycheck goes for the normal things we all pay: housing, car note, food, gas… But a drug habit has to be fed and where is the easiest place to get money? They might get shot robbing a bank, burglarizing a home, or robbing a person on the street. The easiest place in most cases is their employer. You have cash and merchandise on hand and the employee probably has access to all of it.

When we conduct a corporate fraud investigation one of the first things I do is look at is the personnel files and talk to the supervisors. I ask about the employees in question. Do they live with in their means, how is their work record and is there any activity that would suggest illegal drug use?

Spotting a drug user can be a fairly simple matter. Look for physical signs such as radical mood swings, comprehension problem, no call no show for work issues and frequent times that the employee disappears to name a few.

Why should you care if a person is under the influence of illegal drugs at work? Besides the obvious impact to productivity and payroll you should consider that employees like this tend to attract other like themselves. In more than one corporate fraud investigation I have found that several other employees began working at the same company, attracted by drug user #1. Corporate fraud and your assets then become the cash cow for several drug habits.

Generally a corporate fraud investigator does not really care why employee theft is occurring just who and solving it. However, you should learn from this and put a prevention program in place. Are you conducting pre-employment drug screens? Do you have policy in place that allows you to conduct unannounced drug screens?

Corporate fraud has destroyed more businesses than we could probably count. Do not let your business become a victim because an employee theft situation happened as a result of something clearly preventable. Employee theft and corporate fraud will not go away on its own. YOU must be proactive!

For more information on corporate fraud , corporate fraud investigation and employee theft in Atlanta contact us about corporate fraud investigator or call 1.770.426.0547

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New Tools In Employee Theft Investigation – Atlanta

September 20, 2010 by Staff Editor Leave a Comment

Conducting an employee theft investigation is a complicated undertaking best left to professionals. However, in the past several years a new CCTV tool has not only become available but the cost is now very reasonable. This tool is the link between a retailers CCTV system and their POS.

Employee theft at the POS was always time intensive. You had to match up the detail tape to the CCTV recording of the cashier at the POS. Time stamps on both systems never matched up and even when they did it was very difficult to keep going back and forth between the two.

Now imagine this, you are conducting an employee theft investigation of a cashier. But now the POS terminal data show up on the same screen with the video of the cashier and customer.

Now we see in perfectly synchronized clarity both together. As the cashier is ringing up a pack of gum but actually bagging up DVD’s we see it as clear as day. That type of employee theft is as old as theft itself. But now there is no question at all what happened.

The cool thing about this new technology is that many new DVR’s have this great corporate fraud investigation tool built in. A simple connection is made from the POS terminal to the DVR, usually a CAT 5 cable. There is normally a little programming at the DVR as there are so many different POS systems out there that it simply needs a little adjustment.

Employee theft at the POS is now exposed quickly and easily. The best part is that the system is running 24/7. So when you catch onto an employee theft scheme and begin your investigation it is easy to go back and do research. This is another good argument for adequate drive storage on your DVR.

For more information contact us about employee theft investigation in Atlanta or call 1.770.426.0547

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