Concepts:Chapter 7
|
Aspect |
Method |
Theft |
1.
Surveillance and covert investigation |
2. Invigilation - this means to watch
and examine a process. The text suggests that this technique is more of
an after the fact control to prevent further loss during an
investigation. |
|
3.
Seize and search computers |
|
3.
Find physical evidence |
|
Conversion |
1.
Search public records |
2.
Search online resources |
|
3.
Examine net worth - what has
the suspect spent, compared to what has been earned? |
|
Inquiry |
1.
Interview and interrogate- other employers, business contacts,
coworkers, and finally the suspect |
2.
Honesty testing - shouldn't we ask ourselves why a crook would answer
an honesty test honestly? |
|
Concealment |
1.
Document examination |
2. Audits | |
3.
Electronic searches |
|
4.
Physical counts of inventory |
The text presents a discussion of several of the methods in the table above. There is a good deal of detail about surveillance and covert operations. The method that is probably newest to most of you should be invigilation. An example of its use appears on page 222. In the example, the company owner tracked receipts for a month, then did so again after making sure the staff knew there would be a daily audit. In the example, the value of cash payments to the business doubled during the invigilation. This showed the owner in which area his money was disappearing.
It is a good idea for students to review the methods discussed in the chapter to get an idea of how each is used.
This chapter opens with a story about the lengths to which the owners of an investment firm went to conceal the facts about the fraud that the firm's partners were committing. A person committing a good fraud, or a long term one, will have to cover the facts with believable lies while the crime is still being committed. It is the paper or electronic trail of lies that an investigator must find and understand to prove that a fraud exists. In the example in the text, particularly strict controls were used that found irregularities that ordinary controls might have missed.
So, how do you find that which is, by definition, being hidden? As the text explains, you look for things that don't make sense in a paper or electronic trail of activity, typically involving the movement of money. As with any other evidence gathered in an investigation, you must follow several standard procedures:
There are times when it is not practical to examine all objects that you might wish to examine. When this is true, it is common practice to examine a sample of the population in question. The text mentions that you must calculate the necessary sample size, but it does not explain how to do so. At the risk of making you crazy, I will refer you to a short lesson on determining a proper sample size. It requires you to determine the approximate population size, the confidence level you need, and the margin of error you will accept. Before deciding to take a sample, remember that a sample may not contain the data you need if it is rare in the population, which makes the calculation of an appropriate sample size very important.
The text also discusses obtaining evidence when it is likely
that those who have it will not wish to provide it. The two legal
methods are by subpoena and by search warrant. An attorney will know
the difference between the kind of subpoena the book describes (subpoena duces tecum), and
the one that compels a person to testify (subpoena ad testificandum).
Some evidence may require both. The text does explain that a search
warrant must by obtained from a court, and it will be served by and
acted upon by police. This is typically done when searching for
evidence in a criminal case. The text suggests that voluntary consent
belongs in this group as well, but only in the sense that you can't
just take records from someone: you need a court order or their permission.
The text discusses the many things about a document that can be altered to make it say what a person committing a fraud wants it to say. I recommend looking at the sixty questions on page 252 and 253 that introduce you to the subject. For a more personal discussion of the subject matter, I offer you the opportunity to spend an hour with Frank Abagnale, Jr.
Assignments
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