Professional Documents
Culture Documents
Surveillance: also called observation, it involves watching and recording the physical facts, acts,
and movements, which are part of the theft act of fraud
Surveillance & Covert Operations
o Rely on senses like hearing and seeing
o 3 types of surveillance
Stationary or fixed point
Can be conducted by anyone, locate scene that needs to be observed
and anticipate action most likely to occur. (Ex: stakeouts)
Moving or tailing
Much more risky (chances of failure and financial cost are high), rewards
are much higher (id’ing the receiver of stolen goods)
Electronic
Frequently used. Wiretapping, email monitoring. Etc. May have limited
value in the investigation of employee frauds b/c of concerns regarding
employee privacy
o Undercover investigations should only occur when:
Large scale collusive fraud, other methods fail, investigation can be closely
monitored, significant reason to believe fraud is occurring, strict compliance w/
the law, investigation can remain secretive, law enforcement informed when
appropriate evidence has been accumulated
o Observing someone’s activities is a fraud detection tool that attempts to catch fraud and
other types of crime at the theft act stage.
Theft Investigative Methods
o Surveillance & Covert Operations
o Invigilation
o Seizing and searching computers
o Physical evidence
Concealment Investigative Methods
o Document examination
o Audits
o Electric searches
o Physical asset counts
Inquiry Methods
o Interview and interrogation
o Honesty testing
Conversion Investigative Methods
o Searching public records
o Online resources
o The net worth method
Chapter 8
Documents important
o Most fraud experts will choose a document over eye witness testimony b/c they do not
have the flaws humans’ have (perjury, biases, etc.)
Chain of Custody: a record when a document is received and what has happened to it since its
receipt
o Careful records must be maintained any time the document leaves the care, custody, or
control of the examiner
o Memos should be written when the document came into the hand of examiner and a
subsequent memo written whenever there is a change of status
Marking Evidence
o When documentary evidence is received, it should be uniquely marked so it can be
identified later.
Transparent envelopes w/ date received & examiner’s initials
Copy should be made
Copies used during investigation and trial and should be kept in file w/ original
Original can be removed for trial if needed
Pg.245: Audits; doctor fraudulent check example
o Auditors conduct seven types of tests to gather documentation
Tests of mechanical accuracy, analytical tests (test of reasonableness),
documentation, confirmations, observations, physical examinations, inquiries
Proper sampling procedures need to be accounted for (Ex: 40 checks, 0
fraudulent ones = no fraud for that sample. Can easily be false when looking for
fraud)
o Discovery Sampling: simple statistically based method of analyzing a subset of
transactions from a larger pool. It allows investigator to decide on an acceptable risk
level for sampling. Only used when full population analysis using a computer is not
possible. 2 steps:
Testing a random sample
Using probability theory to draw inferences about the population form the
sample
Pg.249: Hard to get Documentary Evidence
o Often only 3 ways to get documentary evidence
Subpoenas
Search Warrant
Voluntary Consent
Chapter 9
Chapter 10
Anyone can be interviewed; people who are believed to be close to the situation or case
Characteristics of a good interview
o Sufficient length and depth to uncover relevant facts
o Focus on pertinent information and quickly steers the topic away from irrelevant
information
o Good interviews are objective; they endeavor to gather information in a fair and
impartial manner
Characteristics of a Good Interviewer
o Outgoing and interact well with others
o Comfortable around people and they help other feel at ease.
o Willing to share information and display information
o Performed in a low key or informal manner tend to be more effective
o Professionalism
One person at a time when interviewing
Pg. 287 language of an interview
o Use short questions confined to one topic, clearly understood
o Ask questions that require narrative answers
o Avoid questions that suggest part of the answer
o Require witnesses to give the factual basis for any conclusions they state
o Prevent witnesses from wandering aimlessly
o Don’t let witnesses lead you away from topic
o Don’t let witnesses confuse the issue
o At all times concentrate more on the answer than the next question
o Clearly understand each answer before you continue
o Maintain control of interview
o Point out some but not all of the evidence
o
Chapter 14
Divorce fraud
o In divorces, assets are given to spouses and attorneys representing spouses. Transfers
of assets to offshore bank accounts, relatives, friends, and other hidden places are all t
common in bankruptcy, divorce, and tax fraud
o Bankruptcy: a legal process that either allows a debtor to work out an orderly plan to
settle debts or liquidates a debtor’s assets and distributes them to creditors
o Roles Fraud Examiners play in divorces:
Serve as examiner or a trustee in bankruptcy cases
Assist in recovering assets for creditors in both divorce and bankruptcy cases
Serve as a private investigator to find hidden assets or examine lifestyles of
divorce or bankruptcy
Tax fraud: committed against any governmental or other organization that collects taxes,
including the federal government, state government, local governments, or other taxing
authorities
o Citizens should pay the least amount of tax that they legally owe
o Fake social security number
o Two sets of books
o Lying about ailments
o Claiming false dependents
o Overstating income not taxable income
IRS criminal investigation (pg.578)
o CI Division is directed at the taxpayers who willfully and intentionally violate their
known legal duty of voluntarily filing income tax returns or paying the correct amount of
income, employment, or excise taxes.
o Mission of the CI is to investigate potential criminal violations of the internal revenue
code and related financial crimes in a manner that fosters confidence in the tax system
and compliance with the law.
o Trained to follow the money.
Tasks to become IRS special agent (pg.581).
o College degree
o Not older than 37
o US citizen
o 15 semester credits in accounting
o CPA