Fraud Investigation helps organizations manage the risk an vulnerabilities that come from global corruption, from high profile and complex financial matters to employee, cash, cybercrime and procurement fraud. Investigation of alleged fraud or corruption perpetrated against corporate and government entities, including, but not limited to, vendor fraud, payables fraud and embezzlement.
Van Leeuwen FCRM assists its clients with investigation of alleged fraud or corruption perpetrated against corporate and government entities, including, but not limited to, vendor fraud, payables fraud and embezzlement. It also assists with factual, often privileged, investigation of alleged corporate wrongdoing, including, but not limited to, investigation of alleged financial statement misrepresentations and violations of anti-corruption regulations. Van Leeuwen FCRM’s investigation work includes forensic imaging of computers, data analysis, collection and analysis of data, interviews of individuals and review of documents.
The various ways frauds are investigated
Once there is prediction of fraud, it must be investigated to determine who, why, how, and how much aspects of the fraud. There are four common ways frauds are investigated: (1) Using theft act investigation methods, (2) Using concealment investigation methods, (3) Using conversion investigation methods, and (4) Using inquiry investigation methods. Which of these methods is most efficient and effective to use and the order in which they are used is usually dictated by the specific type of fraud committed.
The methods to investigate suspected fraud
Van Leeuwen FCRM’s theft fraud investigation methods include activities that directly investigate the theft act (non-concealment or conversion) element of fraud. Their purpose is to catch fraud perpetrators “in the act” of committing fraud and include such investigative methods as surveillance, invigilation, obtaining physical evidence (e.g. tire tracks, broken locks), and gathering electronic evidence (e.g. e-mails, text messages).
When beginning a fraud investigation, Van Leeuwen FCRM usually tries to develop hypotheses about who committed the fraud, how the fraud was committed, etc. It prepares a vulnerability chart that coordinates all the elements of the fraud: which assets were taken, who had theft opportunities, possible theft methods, concealment possibilities, conversion possibilities, symptoms observed, pressures on various individuals, rationalizations that were heard or could have justified someone to commit the act, and key internal controls that were missing or could have been overridden. Often, tying these elements together provides initial indications of who could have committed fraud.
The nature of surveillance and covert operations
Surveillance and covert operations are theft act investigative methods that usually involve observing or listening to potential fraud perpetrators. Possible surveillance and covert operations methods include recording conversations, tailing, using cameras and videos, using undercover investigators, or observing individuals in various settings.
The effectiveness of invigilation to investigate fraud
For fraud to occur, three elements are necessary: pressure, opportunity and rationalization. Invigilation involves implementing such strong control procedures or observations that fraud is impossible to perpetrate or is obvious when it is perpetrated. Invigilation allows us to compare results prior to implementing the controls, while implementing the fraud-eliminating controls, and the post period when fraud constraining controls are lifted. Invigilation allows us to compare results (profits, inventory movements, revenues, etc.) when fraud is and is not occurring. In addition to helping us understand if fraud is occurring, invigilation can also help estimate the amount of fraud.
Electronic information from cell phones, hard drives, e-mails, social networking sites and other sources
Electronic evidence is extremely useful evidence that, because of its technical nature, usually involves IT support personnel, forensic accountants, or legal counsel in gathering. There are several steps in gathering electronic evidence: (1) secure the device, (2) clone the device (cell phone, computer, etc.) and calculate a CRM checksum, (3) search the device manually, and (4) search the device using automated procedures.