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Under pressure
Generations that grew up with the internet aren’t immune to online fraud schemes. Trust in online platforms, heavy involvement in social media and financial pressures facing Gen Z and millennials put them at greater risk of being victimized by fraudsters than older adults. Fraud Magazine explores how younger generations become victims — and perpetrators — and what fraud examiners can do to educate them about fraud.
Written By: Crystal Zuzek, Anna Brahce
Infiltrating the IT industry
Companies across the globe have unknowingly hired remote information technology workers acting on behalf of the Democratic People’s Republic of Korea (DPRK). Using stolen identities and gaining access to sensitive data, the workers illicitly generate revenue for the DPRK’s Weapons of Mass Destruction (WMD) and ballistic missiles programs (weapons program). The author breaks down elements of the scheme and provides tactics for organizations to avoid hiring bad actors.
Written By: Trisha Gangadeen, CFE
Be alert to Medicare hospice fraud and new mobile job-offer cons, plus spot phishing scams
Creative scammers offer Medicare hospice services (to those who aren’t terminally ill). Beware of sophisticated job-offer frauds on mobile devices. And here’s how to spot pesky phishing scams.
Written By: Robert E. Holtfreter, Ph.D., CFE
Data-driven compliance: A new frontier for anti-bribery and anti-corruption risk programs
Despite significant regulatory advancements and the availability of innovative tools, many anti-bribery and corruption compliance teams avoid implementing data-driven strategies. The author emphasizes the necessity of embracing an innovative approach to address these risks in the wake of evolving regulatory and enforcement demands.
Written By: Rajesh Melappalayam, CFE
Getting started as a forensic interviewer
Conducting a forensic interview for the first time can be a nerve-racking experience. But with the right tools and resources, you can obtain vital firsthand information from those with knowledge of an alleged crime.
Written By: Nicholas DiModica, CFE, CPA
Nations unite to wipe out telecom fraud centers and more
China, Myanmar and Thailand join forces to tackle telecom fraud centers operating in Myanmar; a woman in Texas pleads guilty to smuggling and distributing an unapproved, altered drug used to treat cats; the prison sentence of former Mozambique finance minister, Manuel Chang, is increased; and former U.S. Senator Bob Menendez is sentenced to 11 years in prison.
Written By: Crystal Zuzek
Statement on fraud risk and enforcement priorities in the U.S.
ACFE CEO John Warren, J.D., CFE, discusses the new presidential administration's policies and executive orders regarding anti-fraud laws and enforcement.
Written By: John Warren, J.D., CFE
Lim Huck Hai, CFE
Onetime runner and current golf enthusiast Lim Huck Hai, CFE, has considerable international executive management experience. He’s helped clients from both private and public sectors implement fraud prevention and regulatory measures and leads investigations guided by integrity and perseverance.
Written By: Anna Brahce
Investigating fraud and corruption in Bangladesh
In this second installment in our series on fraud examinations around the world, an anonymous complaint from an employee sparked an in-depth investigation into allegations of corruption in the bidding process for a large-scale infrastructure project in Bangladesh. The author recounts the intricacies of the case and provides invaluable insight into conducting fraud examinations in this developing country.
Written By: Radhika Vohra, CFE
Detecting fraud without historical data
Datasets of documented fraud cases can be instrumental in detecting anomalies and patterns in all sorts of transactions, but many times those datasets aren’t available. With fraudsters perpetrating increasingly sophisticated schemes, fraud fighters need an edge on the criminals with advanced techniques. Here, the author describes how to use machine-learning models and other advanced techniques to detect fraud when you don’t have historical data to learn from.
Written By: Penny Li, CFE, CPA, Ning Ping Wang
In pursuit of justice
Through the Justice for Fraud Victims Project, college students obtain valuable real-world experience in the field of forensic accounting while aiding victims of fraud.
Written By: David Glodstein, DBA, CFE, CPA, Marie Rice, Ph.D., CFE, CIA
5 most scandalous fraud cases of 2024
Fraudsters work year-round to perpetrate their schemes. Fraud Magazine also works year-round tracking the news for those schemes we believe will live in infamy and serve as cases for anti-fraud professionals to study for years to come. Here are the most scandalous frauds of 2024.
Written By: Jennifer Liebman, CFE, Crystal Zuzek, Anna Brahce
Transience and transformation in the digital age
In 1995, the Association of Certified Fraud Examiners (ACFE) hired a young editor named Dick Carozza, CFE, to turn a newsletter into a magazine. It’s three decades later, and Fraud Magazine is set for another transformation. This is our last printed issue as we tackle a new assignment: delivering the latest fraud prevention and detection content in a digital-only format.
Written By: John D. Gill, J.D., CFE
Gabriella Marshall, CFE
Gabriella Marshall, CFE, major case consultant at Nationwide Insurance, discusses the benefits of earning the Certified Fraud Examiner credential, her professional background, her greatest achievement and more.
Written By: Anna Brahce
Corporate teamwork’s impact on collective fraud participation
In any organization, tone at the top matters. Leaders who emphasize teamwork without building a strong ethical foundation risk creating an environment prone to collusive fraud. The author offers advice for mitigating collective rationalization and reducing the risk of collusive fraud within a corporation.
Written By: Frank S Perri, J.D., CFE, CPA
SEC, FBI, DOJ join forces to bust crypto fraudsters and more
The U.S. Securities and Exchange Commission (SEC), FBI and U.S. Department of Justice coordinated a large-scale takedown of fraudulent cryptocurrency firms involved in market manipulation.
Written By: Crystal Zuzek
Great transformations
Fraud Magazine has always been in a state of transformation, from its start as a simple newsletter to a glossy magazine. Now, the magazine is making another big change as a digital-only publication.
Written By: Jennifer Liebman, CFE
Is account takeover taking over the fraud landscape?
Old password habits die hard, but clinging to your weak password might be the death of your account. The author examines the growing threat of account takeover and considers the effectiveness of the most common security practices.
Written By: Laura Harris, CFE
COVID test kits scam, hurricane recovery and charity scams, and AI email security gaps
U.S. citizens can receive free COVID tests again; beware of scammers who want to charge you. Fake charities are following the recent hurricane disasters. And fraudsters are using artificial intelligence to gain the upper hand to invade inboxes with sophisticated malicious emails.
Written By: Robert E. Holtfreter, Ph.D., CFE
He was a victim. Now he’s fighting back.
In 2021, Troy Gochenour became a victim of cryptocurrency fraud after striking up a correspondence with a scammer he met on a dating app. The Ohio-based voice actor talks to Fraud Magazine about his experience as a fraud victim and how it transformed him into an activist raising awareness and fighting against cyber scams.
Written By: Emily Homer, Ph.D., CFE
Who owns transaction and controls monitoring?
Who monitors and oversees high-risk transactions in your organization? In this article, I explore who owns transaction and controls monitoring for vendors, customers and employees.
Written By: Vincent M. Walden, CFE, CPA
Behavioral analytics could’ve detected and prevented Evergrande fraud
The Evergrande Group, one of China’s largest property developers, recently went bankrupt and was liquidated because of excessive borrowing, mismanagement and alleged financial misreporting. In this column, the author conjectures that behavioral and data analytics could’ve gone a long way in detecting and preventing this scandal.
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Taking trauma into account
Interviews are essential to gathering detailed information during a fraud examination. But some interviews require special care, especially when it comes to victims of fraud. Trauma-informed interviewing practices take into account the emotional upheaval that fraud victims often face. In this article, the author explains why trauma-informed interviews are important and how their principles can be incorporated into interviewing practices.
Written By: Emily Homer, Ph.D., CFE
Identity thieves steal PII with fake Google Authenticator ads, WhatsApp job scams and phony airline customer service reps
Identity thieves continue their quest for consumers’ personally identifiable information with three new scams. Beware fraudsters posing as airline customer service representatives on social media, mystery companies targeting job seekers on the WhatsApp instant messaging service and fake Google Authenticator ads masquerading as malware.
Written By: Robert E. Holtfreter, Ph.D., CFE
Investigating the investigators, no profit in tragedy for identity thieves and more
Written By: Jennifer Liebman, CFE
Cracking the center
According to the United Nations, an estimated 200,000 people have been trafficked into cyber scam centers where they’re forced to commit fraud schemes, causing billions of dollars in losses worldwide. Fraud Magazine talks to experts fighting on the frontlines against forced criminality about what it will take to disrupt these cyber scam operations and what fraud examiners can do to help.
Written By: Jennifer Liebman, CFE
Outsmarting fraud in the hospitality industry
With more people traveling and spending money on leisure following the COVID-19 pandemic, fraudsters are once again turning their attention to the hospitality industry. Here we look at the variety of fraud taking place in this sector and how best to prevent it.
Written By: Rasha Kassem, Ph.D., CFE
Wanted: Fraudsters
ACFE President John D. Gill, J.D., CFE, calls on anti-fraud professionals to send contact information for convicted fraudsters who'd be willing to be interviewed by the ACFE.
Written By: John D. Gill, J.D., CFE
Prioritizing fraud program documentation
Documenting your fraud program is a business imperative that shouldn’t be overlooked. The author details how to craft an enterprise-level fraud policy and a program document that can set your organization up for success.
Written By: Sophia Carlton, CFE
Revisiting Benford’s Law with added AI horsepower
For over a decade, CFEs, auditors and analysts have used Benford’s Law to identify journal entry irregularities. Today, this analysis method remains relevant as ever as new applications using AI and simulation could bring Benford’s Law to the forefront of your fraud risk management controls.
Written By: Vincent M. Walden, CFE, CPA
National Public Data confirms 2.9 billion-record data breach and more
National Public Data confirms cybercriminals conducted massive data breach involving 2.9 billion records; Missouri woman is arrested for attempting to steal Graceland mansion; and Robert Telles is sentenced for the murder of Las Vegas Review-Journal investigative reporter Jeff German.
Written By: Crystal Zuzek
A case of workplace misconduct
In this case study — the first in a series covering compliance and investigation issues across the globe — the author, a veteran ethics and compliance professional, details a workplace misconduct investigation involving a senior business leader at a large organization in India. The inquiry, which began with harassment allegations, revealed other questionable activities the senior leader was engaged in.
Written By: Radhika Vohra, CFE
Devising adaptive leadership strategies for volatile, uncertain scenarios
Leaders face accelerated challenges because of global uncertainty, uses and abuses of AI technology, and evolving workforces, among other factors. Anti-fraud practitioners grapple with time-critical decision-making and rapid situational responses. Here’s how to implement adaptive leadership.
Written By: Donn LeVie, Jr., CFE
Check fraud hits home
Despite the diminishing use of checks in the U.S., check fraud is on the rise. The author recounts her own brush with attempted check fraud and highlights how businesses — large and small — can protect sensitive customer information.
Written By: Laura Harris, CFE
Developing the next generation of forensic accountants
As the accounting field braces itself for staff shortages, it’s now more important than ever to ensure that young fraud fighters are prepared to meet future challenges. Here, the author provides training techniques that he’s employed to train new employees and pass his wealth of knowledge on to the next generation.
Written By: Alexander Dokuchaev, CFE, CPA/ABV
Falsely accused of fraud
Fraud investigators strive to reveal the truth, but sometimes people are falsely accused of fraud. Here, we examine cases of wrongful convictions with insights from Certified Fraud Examiners (CFEs) and other experts in the field to see why this happens and what mistakes to avoid during investigations.
Written By: Anna Brahce
Boeing admits to fraud over 737 Max jet crashes and more
Aviation giant Boeing pleads guilty to fraud over 737 Max jet crashes, the U.S. Supreme Court hands down big decisions on bribery and corruption, and Interpol coordinates an international law enforcement operation to dismantle online scam networks.
Written By: Crystal Zuzek
Natalie Lewis, CFE, CPA/CFF
At one time an aspiring artist, Association of Certified Fraud Examiners (ACFE) Board of Regents Chair Natalie Lewis, CFE, CPA/CFF, now investigates alleged employee embezzlement and business fund misappropriation schemes. She works to combat fraud locally and globally in her leadership positions for the City of Atlanta and the ACFE.
Written By: Anna Brahce
Fraud investigations gone wrong
Failures in fraud investigations can hinder the pursuit of justice and the deterrence of fraudulent activities. The author examines two case studies that illustrate the immense impact that botched investigations can have on individuals, organizations and society.
Written By:
Toll-charge scam, five AI threats, CISA impersonation and reducing spam messages
Fraudsters pose as employees of toll road agencies and the U.S. Cybersecurity and Infrastructure Security Agency (CISA) to steal money and personal information from unsuspecting consumers. Also in this column, the author details how artificial intelligence is making it easier to commit cyberfraud, and how consumers can reduce the number of spam emails in their inboxes.
Written By: Robert E. Holtfreter, Ph.D., CFE
Balancing fraud management and the customer experience
Forming solid relationships with customers while protecting them from fraud and financial loss is a constant balancing act for banks. The author details the steps involved in developing a strategy that puts customer protection at the center while providing a hassle-free customer experience.
Written By: Sophia Carlton, CFE
Ready for the future
Members of the ACFE’s Board of Regents sat down with Fraud Magazine at the 35th Annual ACFE Global Fraud Conference in Las Vegas for a wide-ranging discussion about pandemic risk management, how AI is no substitute for human expertise and how important it is to attract new people to the anti-fraud profession.
Written By: ACFE Staff
On a winning streak
Thousands of fraud examiners from around the globe flocked to Las Vegas, Nevada, where they hit the big time, gleaning deep insights and practical tools to combat fraud from an international cast of anti-fraud experts during the 35th Annual ACFE Global Fraud Conference.
Written By: Crystal Zuzek
Flexing instead of curtsying
Former CIA Chief of Disguise Jonna Mendez talks about concealing spies’ true identities as they ply their trade, rising through the ranks as a woman in a male-dominated field, and the important differences between fraud fighters and undercover agents.
Written By: Jennifer Liebman, CFE
Renewing strength in our purpose at the 35th Annual ACFE Global Fraud Conference
ACFE President John D. Gill, J.D., CFE, discusses the energizing effects of attending ACFE Annual Global Fraud Conferences, and in particular, the 35th Annual Global Fraud Conference held in Las Vegas, Nevada, in June.
Written By: John D. Gill, J.D., CFE
Monitoring and investigating human rights risk in the supply chain
Forced labor, an unfortunate reality in much of the world, may lie hidden (or in plain sight) in companies’ supply chains. Governments are taking notice, and CFEs have a key role to play in combating the problem.
Written By: Vincent M. Walden, CFE, CPA
Everything is a priority in the Southern District of New York
Fraud Magazine examines how U.S. Attorney Damian Williams is leading the fight against financial fraud and public corruption from one of the most influential federal prosecutorial offices in the United States.
Written By: Jennifer Liebman, CFE
Fake it until you make it: Fraudulent founders
In recent years, stories of company founders committing fraud have proliferated in the news. By examining high-profile cases, the author identifies patterns and key takeaways for CFEs to better understand this seemingly all-too-common phenomenon.
Written By: Sophia Carlton, CFE
A deeper understanding of occupational fraud
Fraud fighters recognize the ACFE’s Report to the Nations as the premier study of occupational fraud. ACFE CEO John Warren, J.D., CFE, takes readers on an in-depth tour of the 13th edition of this comprehensive report of occupational fraud, its perpetrators and victims, and its costs to help anti-fraud professionals better protect their organizations against this pernicious economic crime.
Written By: John Warren, J.D., CFE
The not-so-friendly fight against ‘friendly fraud’
Whether you call it “friendly fraud” or a chargeback, refund fraud and abuse is on the rise and costing retailers billions. The author discusses what this fraud entails, what’s behind its growth and why this decidedly unfriendly scheme is so frustrating to fight.
Written By: Samuel May, CFE
80,000 pounds of heartbreak and more
Four women in England are victims of a romance scam; Yvette Wang, former chief of staff to accused fraudster Guo Wengui, pleads guilty to conspiracy to commit wire fraud and money laundering; and a mortuary worker in Arkansas pleads guilty to stealing human remains and selling them to a man she met in a Facebook group.
Written By: Crystal Zuzek
Noncompliance with laws and regulations – CFEs’ elevated audit role under proposed PCAOB rules
CFEs, lawyers and auditors – be on alert! The proposed PCAOB’s amendments to its auditing standards related to an auditor’s consideration of a company’s noncompliance with laws and regulations about financial statement audits will have a profound impact on our profession, bringing fraud risk management front and center.
Written By: Vincent M. Walden, CFE, CPA
Scammers rip off desperate school-loan debtors, plus analyzing sensitive data leakage
In March, a U.S. district court shut down a student debt-relief operation that stole $8.8 million in junk fees from school debtors. Here we detail how others can avoid falling victim to scams that claim they’re helping people pay off their student loans. And a recent data security report sounds the alarm on organizations sharing data internally.
Written By: Robert E. Holtfreter, Ph.D., CFE
The criminal mind of a fraudster
White-collar criminals are adept at manipulating and exploiting the goodwill of others to carry out their schemes. Recognizing and understanding these behaviors are important ingredients in the fight against financial fraud. In this article, the author details criminal thinking traits through case studies of some of the most infamous white-collar fraudsters and provides strategies and tools that fraud examiners can use to recognize those traits.
Written By: Frank S Perri, J.D., CFE, CPA
The flawless fraud of real-time deepfakes
The use of real-time deepfakes, where fraudsters use video or audio generated with artificial intelligence to replicate someone’s voice, image and movements as the scheme is happening, is the latest way that fraudsters are perpetrating a host of frauds. In this article, the authors describe real-time deepfake schemes and what can be done to combat them.
Written By: Zachary M. Kelley, Carolyn Conn, Ph.D., CFE, CPA
Job analyses and the making of the CFE Exam
ACFE President John D. Gill, J.D., CFE, gives a behind-the-scenes look at the making of the CFE Exam.
Written By: John D. Gill, J.D., CFE
Natalie Lewis, CFE, CPA/CFF
At one time an aspiring artist, Association of Certified Fraud Examiners (ACFE) Board of Regents Chair Natalie Lewis, CFE, CPA/CFF, now investigates alleged employee embezzlement and business fund misappropriation schemes. She works to combat fraud locally and globally in her leadership positions for the City of Atlanta and the ACFE.
Written By: Anna Brahce
Decoding AI and machine learning in banking
Whether you’re drawn into a case as a fraud examiner, an auditor, or a customer encountering identity fraud, understanding credit risk modeling within financial organizations is essential. This knowledge is crucial regardless of your role because it impacts how financial products, from bank accounts to mortgages and student loans, are managed and secured globally. Appreciating how financial institutions assess the risks tied to each customer — whether an individual or a corporation — is fundamental for anyone engaged with financial services. This understanding shapes how we perceive the safety and reliability of financial products that affect everyday financial decisions.
Written By: Britta Bohlinger
Michael McCall, CFE
Retired FBI agent Michael McCall has years of experience investigating white-collar crime in both the federal and private sectors. Throughout his career he’s learned that following the money is key to tracking criminals and continues to fight fraud as owner of an investigative company.
Written By: Anna Brahce
Fraud considerations for internal audits: The CFE perspective
In 2022, the Association of Certified Fraud Examiners (ACFE) and the Institute of Internal Auditors (IIA) announced a partnership that sought to collaborate on “education initiatives that will raise the competency of each organizations’ members with regard to fraud auditing and investigation.” As I reflected on this announcement, it struck me that both internal auditors and anti-fraud professionals strive to protect the organizations they serve, and though the primary focus may be different, the opportunities to collaborate are indeed vast.
Written By: Vincent M. Walden, CFE, CPA
Fraud examiners anticipate future with generative AI, ACFE/SAS Report shows
Anti-fraud professionals across the globe expect generative artificial intelligence (AI) to be part of their fraud-fighting arsenals in the future, according to the 2024 Anti-Fraud Technology Benchmarking Report. In fact, an impressive 83% of respondents surveyed for the study anticipate that their organizations will add this technology to their anti-fraud initiatives over the next two years.
Written By: Rihonna Scoggins
The perilous job of telling the truth
In 2022, investigative journalist Jeff German had just begun picking at the threads of a story about a Ponzi scheme that targeted members of the Mormon church. But he was murdered before he got the chance to write it. After his death, another reporter, Lizzie Johnson, took up his mantle and finished the story for him. Fraud Magazine recounts Johnson’s and German’s investigation, and talks to Johnson about honoring German’s legacy and the perils that journalists can face on the job.
Written By: Jennifer Liebman, CFE
Filling in the fraud awareness training gaps
Many organizations provide fraud awareness training for their employees. In fact, according to survey results from Occupational Fraud 2024: A Report to the Nations, 63% of organizations provide awareness training for their staff. However, not all awareness training is created equal, and I’ve witnessed programs that fall short of their intended goals because they lack key elements. So how can organizations bridge those gaps for effective, adaptable and scalable fraud awareness training
Written By: Sophia Carlton, CFE
Fraud scheme targets families of missing migrants and more
The Spanish Civil Guard arrest 14 people led by a man in Morocco for conducting a scheme targeting families of missing migrants; the FTC refunds millions to victims of student debt forgiveness scams; and a woman uses TikTok to get her money back after scammers impersonate her bank and steal thousands of dollars.
Written By: Anna Brahce
Stand by for guidance
The failure to prevent fraud offense, a key provision of the U.K.’s 2023 Economic Crime and Corporate Transparency Act, is expected to go into force later this year or 2025. The offense, part of the government’s overall strategy to fight financial crime, is meant to encourage corporate accountability for fraud. In this article, anti-fraud professionals assess the new law and consider what organizations might do to prepare as they await government guidance on “reasonable procedures” rules to prevent fraud.
Written By: Jennifer Liebman, CFE
Fake tax refunds, business license scams and risky AI platforms
What makes fraudsters see dollar signs in their eyes? Personally identifiable information. Here are schemes designed to squeeze PII from victims via web links, the mail and insecure AI platforms.
Written By: Robert E. Holtfreter, Ph.D., CFE
Deconstructing academic fraud
In 2011, Diederik Stapel was a psychologist at Tilburg University in the Netherlands at the pinnacle of his academic career. He was dean of the university’s School of Social and Behavioral Sciences and had a prestigious reputation in academic circles. But that same year, Stapel came under suspicion for fraud, unleashing a chain of events that led to his dismissal after an investigation concluded he’d falsified 55 of his publications and 10 Ph.D. dissertations written by his students.
Written By: Emily Homer, Ph.D., CFE, Anna Brahce
32nd Annual ACFE Global Fraud Conference builds on 2020’s breakthrough event
At the height of the COVID-19 pandemic last June, the ACFE pivoted the ACFE Global Fraud Conference to a virtual format to keep attendees, speakers and sponsors safe. The ACFE stood firm in its commitment to provide quality education and resources for anti-fraud professionals, and it delivered. More than 4,000 fraud fighters gathered virtually in a breakthrough format to share knowledge, network with like-minded professionals and learn from the industry’s top leaders.
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SEC’s increasing scrutiny trend bodes well for anti-fraud professionals
On July 19, 2021, the U.S. Securities and Exchange Commission (SEC) alleged that Aron Govil defrauded investors of over $7 million through a scheme using investor funds in two companies he controlled, Cemtrex Inc. and Telidyne Inc., for personal expenses. The SEC also alleged that Govil engaged in scalping, insider trading and failing to file required disclosures with the SEC.
Written By: R. Thomas Godwin, Ph.D., CPA, CGMA, Robert Baucom
The case of the missing boiler fuel
The new head of a milk processing plant in India was reviewing his company’s management reports when he noticed a glaring discrepancy in the amount of fuel indicated in the report and amount it actually had. The plant, which used the leaves and husks of eucalyptus to fuel its boiler, should’ve had 150 tons of fuel, or 20 heaps of eucalyptus. But the plant head could only find two heaps. He asked the head of engineering and the boiler manager to account for the discrepancy but only got evasive answers. When the company’s internal audit team began to dig into the fuel reports to resolve the discrepancy, they discovered that records were missing.
Written By: Anuj Choudhary, CFE
Behind the blocks
Charlie Shrem was atop the cryptocurrency world as CEO of pioneering bitcoin exchange BitInstant when he was arrested for indirectly facilitating drug sales on the dark web. Now post-prison, Shrem talks to Fraud Magazine about his transformation into an evangelist for compliance and regulation in crypto and where he thinks the industry will go next.
Written By: Jason Zirkle, CFE
Amanda Malusky Krauss, CFE, CPA/CFF
Amanda Malusky Krauss’s passion for fighting fraud began early in her career when an employee of a firm she was auditing slipped her a note detailing a fraud committed by executives. Today, the lead for Axium Consulting’s internal investigations and forensic accounting practices says she’s driven to fight injustice and strives to always respect the humanity of the people she interviews.
Written By: Anna Brahce
Can generative AI give us prescriptive analytics?
One of four key types of analytics has long been considered a “pie-in-the-sky” concept for fraud investigators. Rather than describing or diagnosing something that’s happened or predicting what could happen, prescriptive analytics can tell us what we should do about it. With the growth of generative AI and large language models, it may just be in reach.
Written By: Vincent M. Walden, CFE, CPA
First look at Occupational Fraud 2024: A Report to the Nations
Since the first Report to the Nation was published in 1996, the Association of Certified Fraud Examiners (ACFE) has surveyed thousands of Certified Fraud Examiners (CFEs) about the methods, costs and effects of occupational fraud. Now in its 13th edition, the Occupational Fraud 2024: A Report to the Nations provides an inside look at how fraud is committed, detected and prevented in organizations around the world.
Written By: ACFE Staff
Chrysti Ziegler, CFE
Chrysti Ziegler, CFE, the president of the ACFE Houston Area Chapter, was thrilled to discover the art of fraud fighting early in her career as an auditor. Her interest was piqued when she first learned about the idea of malicious intent. She was hooked. Her passion then grew for joining the force against fraud.
Written By: Dick Carozza, CFE
Two members join ACFE Board of Regents for 2023-2024
CFEs elected two new members to ACFE’s Board of Regents for the 2023-2024 term. The new members, Thomas A. Caulfield, CFE, and Natalie S. Lewis, CFE, replaced outgoing Regents Hannibal “Mike” Ware, CFE, and Alexandra Sagaro, CFE, whose terms ended in 2023. Caulfield and Lewis took their oaths of office during the board’s meeting in February.
Written By: Jennifer Liebman, CFE
In Memoriam: Joseph W. Koletar, DPA, CFE, and three members join ACFE Board of Regents for 2024-2025
The ACFE remembers Joseph W. Koletar, DPA, CFE; Kimberly A. Howell, CFE, Maheswari G. Kanniah, CFE, and Robert J. Smolich, CFE, join the ACFE Board of Regents for 2024-2025; and the ACFE Board of Regents disciplines two members.
Written By: ACFE Staff
Develop a curiosity-driven workplace
Research shows that those with inquisitive minds seek novel solutions to unique challenges. Nowhere is this truer than in fraud investigations where curiosity and a healthy dose of skepticism are two sides of the same coin. Fraud investigators won’t detect many instances of financial deception if they don’t use curiosity as a problem-solving skill.
Written By: Donn LeVie, Jr., CFE
The irrevocable trust
In 2023, Christopher Linscott, CFE, CPA, CIRA, arranged a donation of $250,000 to the ACFE Foundation — the single largest donation to the foundation ever. Here’s the story of how a Ponzi scheme that bilked thousands of military veterans and retirees became the impetus for that donation.
Written By: Jennifer Liebman, CFE, Mandy Moody, CFE, Jala Attia, CFE
Playing fair
Football — the international sport, with strikers and goalkeepers — is beloved around the world, but in an intense game where professional teams compete for wins and financial survival, fraud is commonplace. Here’s a primer on the many schemes on and off the field and meaningful steps that football clubs and leagues could take to fight fraud in the sport.
Written By: Rasha Kassem, Ph.D., CFE
Checks continue to be an attractive vehicle for fraud
People might not be writing as many checks as they did in the past, but that hasn’t stopped fraudsters from pressing on with their schemes. The author examines why check fraud continues unabated even with the rise of noncash payment options.
Written By: Laura Harris, CFE
Defiant together
Jennifer Griffith, CFE, and Sarah Carver, CFE, spent years informing their superiors in the U.S. Social Security Administration office where they worked about an operation between a lawyer and an administrative law judge to fraudulently approve thousands of disability claims. But instead of rewarding them for uncovering a massive fraud, their bosses retaliated against them. Carver and Griffith talk to Fraud Magazine about their journey as whistleblowers and their courage to fight for the truth even when the odds were stacked against them.
Written By: Jennifer Liebman, CFE
Who’s liable in authorized push-payment schemes?
You probably send cash via Zelle, Venmo, Apple Pay or other mobile apps. But scammers are also using those apps to trick people into authorizing payments. Banks have traditionally balked at refunding victims, but that’s changing as the U.K. government implements the Payment Systems Regulator, and the U.S. government pressures financial institutions.
Written By: Sophia Carlton, CFE
Ukraine alleges $40 million defense procurement fraud and more
Ukraine accuses Ministry of Defense and arms supplier of $40 million fraud; hundreds of sub-postmasters in the U.K. falsely convicted by the U.K. Post Office; and ESPN staff members illicitly secure Emmys for "College GameDay" on-air personnel.
Written By: Anna Brahce
A sneak peek at the 2024 Report to the Nations
ACFE President John D. Gill, J.D., CFE, shares some of his favorite insights from the latest edition of the ACFE’s biennial publication, Occupational Fraud 2024: A Report to the Nations.
Written By: John D. Gill, J.D., CFE
Identity thieves target social media influencers and college students in latest job scams
The FTC warns social media influencers and college students of job opportunities that are actually ploys to steal personal and financial information. Plus, identity thieves continue to scam people via work-from-home jobs and what you can do to avoid becoming a victim of these schemes.
Written By: Robert E. Holtfreter, Ph.D., CFE
Tracking crypto fraud with unspent transaction outputs
The author uses real-life examples from his fraud investigations to dispel a major myth about bitcoin’s anonymity, showing just how traceable the digital currency is. Unspent transaction outputs are one mechanism to track payments on the blockchain and ultimately discover who’s behind any illicit activity.
Written By: Sean Tweed, CFE, CCAS, CCI
5 most scandalous fraud cases of 2023
We’d just filed our Most Scandalous Frauds story of 2022 when news of the implosion of multibillion-dollar crypto exchange FTX broke. It might’ve been a little too late for us to add what would become the biggest fraud scandal since Theranos to the 2022 list, but the FTX story didn’t disappear, and we had FTX founder Sam Bankman-Fried’s trial and eventual guilty verdict to keep us riveted. Of course, FTX wasn’t the only high-profile case that shocked us; there were many others that had a big impact on the anti-fraud profession. Here are the five fraud cases we found most scandalous in 2023.
Written By: Jennifer Liebman, CFE
Fraudsters steal pandemic cash in your name, infect business web gateways, and pilfer children’s health insurance money and PII
Fraudsters stole billions from U.S. federal COVID-19 loan programs. Now unsuspecting victims, who never applied for those loans, are receiving bills. Plus, business ‘NetScaler Gateways’ are attacked, and Medicaid children’s health insurance recipients are scammed.
Written By: Robert E. Holtfreter, Ph.D., CFE
What’s that smell?
Commercial fragrances and perfumes are big business, and the multibillion-dollar industry attracts its fair share of dodgy practices and outright fraudulent activity. Here we look at the difference between knockoffs and counterfeit products, and why the big perfume houses have such difficulty protecting their brands.
Written By: Donn LeVie, Jr., CFE
Breaking down data silos
The better the data, the better the insight. The better the insight, the better the results. In this issue, we explore how CFEs can help their organizations break down data silos to improve business transparency.
Written By: Vincent M. Walden, CFE, CPA
Fraud for sale
For many, the dark web conjures up images of poorly lit rooms where lone fraudsters scam victims behind the veil of encrypted messaging. But the reality is more akin to an open marketplace, like an Amazon for criminals — where they sell multiple fraud products and focus on branding, marketing and the bottom line. That may be frightening, but it also presents an opportunity for law enforcement. Here’s why.
Written By: Rihonna Scoggins
Case studies in culture
Conducting international investigations abroad requires adaptability and a willingness to learn new customs. The author, who’s conducted many overseas investigations throughout her career, details her experiences to demonstrate why understanding people and their cultures can vastly improve your investigations abroad.
Written By: Lourdes C Miranda, CFE
Is a third party’s use of encrypted email services a safeguard or a red flag?
Global organizations employ thousands of suppliers and vendors to get their business done, so they need to use the latest investigative tools of third-party due diligence (TPDD). Here we examine how we can use TPDD to discover how suspicious third parties can use email encryption services (and corresponding primary email addresses) to mask illegal activities and steal valuable data.
Written By: Antonio Rossi, CFE, Lucrezia Tunesi
In Memoriam, Jack Sandlin, CFE
Jack Sandlin, Indiana state senator and founder of the ACFE Central Indiana Chapter, passed away on Sept. 20, 2023. He’s remembered by loved ones for his integrity and commitment to public service.
Written By: Anna Brahce
Many professions unite to fight fraud
ACFE President John D. Gill, J.D., CFE, expresses gratitude for the diversity in professions among ACFE fraud fighters united by a passion for fairness and justice.
Written By: John D. Gill, J.D., CFE
Corrupt central bank governor allegedly helped push Lebanon’s economy off the cliff
Lebanon’s economy has collapsed, aided by corrupt monetary policy, embezzlement and illusory regulatory oversight. Here’s an analysis of Riad Salameh’s mismanagement of Banque du Liban during his three decades as its governor.
Written By: Fadi Makdessi, Rayan Mohamed, CFE
‘Cryptoqueen’ associate pleads guilty to money laundering and more
‘Cryptoqueen’ associate Irina Dilkinska pleads guilty to wire fraud and money laundering for her role in a pyramid scheme; the U.S. DOJ charges 21-year-old Matthew Bergwall with mail fraud; and British media company Virgin Media 02 launches a free beer for International Fraud Awareness Week.
Written By: Anna Brahce
Balancing the benefits and risks of member-owned credit cooperatives
Credit cooperative societies across the developing world have helped local communities gain vital access to financial systems. But this access comes with a downside. Fraud and other financial vulnerabilities can put members at risk. This is where fraud examiners step in and help protect these cooperatives against such risks.
Written By: Durgesh Pandey, Ph.D., CFE, FCA, Collins Wanderi, MBA, CFE, PGD (HRM)
Rasha Kassem, Ph.D., CFE
As a senior academic and researcher, Rasha Kassem seeks to mitigate fraud risks, improve methods of fighting fraud, and better understand why fraud criminals do what they do. She says that investigating fraud isn’t enough to stop it and urges fraud examiners to innovate and explore new techniques for prevention.
Written By: Jennifer Liebman, CFE
A bad return on your money
Investors have been losing their money to scammers since ancient times, but the scale and the cost of investment fraud has only grown in a digital age that has made it easier for fraudsters to steal hard-earned savings. Here we look at some of the different types of investment fraud and the red flags to watch out for.
Written By: Susan Mangiero, Ph.D., CFE, CFA
All hoax and no cattle
Cody Easterday was a Washington state rancher and farmer with a sterling reputation. Then Tyson Foods discovered that for at least four years he sent fake invoices to that company, and another, for $244 million for the care and feeding of 265,000 head of cattle that didn’t exist. He pleaded guilty to wire fraud and is serving an 11-year sentence in federal prison. Here’s an analysis of the fraud from a prosecutor, investigators and fraud examiners.
Written By: Dick Carozza, CFE
Nine candidates selected for ACFE Board of Regents’ ballot
Nine candidates have been selected to compete for three positions on the 2024-2025 Board of Regents. Beginning Nov. 1 and ending Nov. 30, CFEs may vote online at ACFE.com/BORvoting for their selections to replace retiring Board of Regents members, Wendy Evans, CFE; Collins Wanderi, CFE; and Chrysti Ziegler, CFE. The newly elected Regents take office in February 2024 and will each serve two-year terms.
Written By: ACFE Staff
Crushing fraud in the U.K.
Fraud now accounts for more than 40% of all crime in the United Kingdom. Here we explore what’s behind this proliferation of fraud in England and Wales and what anti-fraud experts say the government must do to crush it.
Written By: Jennifer Liebman, CFE
Ford on fraud
Joseph L. Ford, CFE, has spent a lifetime fighting fraud, working his way up from file clerk at the FBI to holding the bureau’s No. 3 spot. After leaving the FBI, he served as Bank of the West’s chief security officer and eventually founded his own consulting firm. Here Ford speaks of his experiences investigating both large and small frauds and what we can learn from them.
Written By: Paul Kilby, CFE
Thinking caps on! Avoid scholarship fraud
Higher-education tuition is astronomical. Prospective students and their parents are looking in every corner for financial relief. But fraudsters are searching even harder for desperate victims. Don’t let your panic disable your due diligence. Here’s how to use your fraud examiner abilities to avoid these opportunists.
Written By: Cindy Greenman, Ph.D., CFE
Fraud affairs of the heart and more
Elderly victims in Australia lose half a million dollars in alleged romance scam; China and Myanmar join forces to crack down on cybercriminals targeting Chinese nationals; and risk management study reveals retailers are losing money in instances of friendly fraud.
Written By: Anna Brahce
That’s not my signature — or is it?
Sometimes a fraudster signs their name, but with a different flourish, to deny later that they ever signed a document at all. The technique is called autoforgery. Here we examine why criminals might use this rare type of fraud and how to prove it in court.
Written By: Nathan J. Novak, CFE
Lourdes C. Miranda, CFE
Throughout her career investigating financial crimes — first in the CIA and FBI and now in the private sector — Lourdes Miranda found that understanding human behavior is instrumental to cracking cases. She now urges fellow CFEs to balance technology with human intelligence in their investigations and learn everything they can about cryptocurrency and blockchain.
Written By: Jennifer Liebman, CFE
Measure and monitor your fraud risk management program success
‘Tis the season to set company goals. As we wrap up 2023 and look to the new year, ponder this: What are some of the key performance indicators (KPIs) companies use to measure the effectiveness of their fraud risk management program? Here, we explore some leading examples of anti-fraud KPIs that drive business value.
Written By: Vincent M. Walden, CFE, CPA
The many facets of empathy
Empathy is the ability to understand other people’s emotions, values and behaviors. It was once believed to be too “wishy-washy” or submissive to be taken seriously as a valid approach for investigations or negotiations. But empathy is actually a highly valued dimension of interpersonal, communication and strategic competence that can help fraud examiners more easily obtain an admission of guilt from fraudsters and gain insight into their “why.”
Written By: Donn LeVie, Jr., CFE
Evading suspicion through political networking
Sam Bankman-Fried, Elizabeth Holmes and Bernard Madoff. What do they have in common? They apparently used their outsized social influence in their professional networks to illegally expand their bank accounts and prolong their crimes. Fraud fighters can’t also be duped by their wily ways.
Written By: Frank S Perri, J.D., CFE, CPA
Invaluable lessons from fraud fighters across the globe
ACFE President John D. Gill, J.D., CFE, shares lessons learned from ACFE fraud fighters across the globe.
Written By: John D. Gill, J.D., CFE
Phishers use AI to bypass email security, fake life insurance policy scams and more
Phishing scams never disappeared; they’re just more sophisticated. Also reject letters promising millions from insurance policies. And beware of invoices for COVID-19 tests you never ordered.
Written By: Robert E. Holtfreter, Ph.D., CFE
Unfairly thrown in a Thai jail for 547 days
The over $4.5 billion theft from Malaysian sovereign wealth fund 1MDB is one of the world’s biggest-ever financial scams and a sad story as it deprived ordinary people in that country of vital resources. Xavier Justo talks about his nightmare experience exposing the fraudsters responsible for this massive theft and the lessons he’s learned along the way.
Written By: Paul Kilby, CFE
Understanding the art of deception
Proving someone is lying, let alone getting them to confess, is difficult to say the least. Let’s face it, fraudsters are slippery characters and adept at the art of deception. Here David Lieberman, Ph.D., a psychotherapist and an expert in the field of human behavior, helps us understand the signs of deceit and how to get a confession.
Written By: Paul Kilby, CFE
Poorly governed financial systems and fraud: It all starts with access
Access/identity control is a fundamental component of data security that dictates who’s allowed to access and use company information and resources. But organizations still lack the necessary protections, opening the door for fraudsters to exploit their systems. Here the authors examine the latest IT resources to keep such criminals at bay.
Written By:
This scheme is a load of manure and more
In California a man conducted a cow manure Ponzi scheme; a former Amazon manager is sentenced for stealing millions from the company; and fraudsters in India scam victims by posting fake business numbers online.
Written By: Anna Brahce
ACFE expresses gratitude to departing president
Incoming ACFE President John Gill, J.D., CFE expresses gratitude for outgoing ACFE President and CEO Bruce Dorris, J.D., CFE, CPA.
Written By: John D. Gill, J.D., CFE
Breaking records
Fraud examiners shattered Global Fraud Conference attendance records in Seattle, Washington, cementing ACFE’s hybrid virtual and in-person annual conference as a can’t-miss event. And keynote speakers shared their stories of investigating fraud and corruption and revealing the truth.
Written By: Jennifer Liebman, CFE
Internal audit gone wrong
In a world rife with scandals impacting all aspects of business and life, internal auditors aren’t immune to bad behavior. Here’s how to find their occasional crimes and misdemeanors, plus some practical measures to deter and detect their nefarious activities.
Written By:
ChatGPT AI voice cloning, plus fake income-tax refund scam
Don’t send in the clones! Fraudsters are using ChatGPT to replicate voices to pull off classic grandparent and family-emergency scams. And beware of this new fake income-tax refund scam.
Written By: Robert E. Holtfreter, Ph.D., CFE
Joseph R. Dervaes teaches fraud lessons and awards first scholarship named in his honor at PNW Chapter Annual Conference
ACFE Regent Emeritus Joseph R. Dervaes, CFE, gave his final presentation and awarded the Pacific Northwest Chapter’s scholarship, renamed in his honor, at the chapter’s first hybrid annual fraud conference and the latest edition of the Fraud Risk Management Guide helps fraud examiners keep apprised of the latest threats and the multiple ways they can tackle them.
Written By: Jennifer Liebman, CFE, Anna Brahce
Out of sight, out of mind
The COVID-19 pandemic resulted in an increase in remote and hybrid work that has many managers concerned about declining productivity levels. Here we examine the latest buzzwords associated with the trend, how executives and employees are coping in this new environment, and whether “stealing time” is a fraudulent act.
Written By: Donn LeVie, Jr., CFE
The challenges of change
Members of the ACFE Board of Regents always bring a wealth of experience from their respective sectors. Here they impart their thoughts on an array of topics and the importance of continual learning in the ever-evolving anti-field field.
Written By: Paul Kilby, CFE
Mind blowing
Understanding ChatGPT and similar generative AI tools is critical for fraud examiners seeking to leverage this emerging technology. Here we explore the risks and the extraordinary potential of this new phenomenon.
Written By: Vincent M. Walden, CFE, CPA
ACFE Foundation awards Ritchie-Jennings Memorial Scholarship recipients $85,000 in funds for 2023–2024 term
The ACFE Foundation has awarded $85,000 in funds to the recipients of the 2023-2024 Ritchie-Jennings Memorial Scholarship. Twenty-three university students from across the U.S., Europe, Asia and Africa received scholarships ranging from $2,000 to $10,000 for demonstrating academic achievement in a fraud-related field of study and a desire to pursue a career in fraud examination or similar anti-fraud profession.
Written By: Anna Brahce
Detecting document fraud
Cases of document fraud, including check fraud, have exploded in recent years. The authors explain what’s behind the proliferation of this age-old scam and the modern technology CFEs can employ to stop it in its tracks.
Written By: Dustin J. Eaton, CFE, Theodore Colon, J.D.
M. Brian Reid, CFE
M. Brian Reid, CFE, says that in a parallel universe he might’ve been a nuclear physicist. But the CEO of Brison LLC applies the same passion he has for exploring the mysteries of the universe to examining the complexities of fraudsters and their schemes against his business clients.
Written By: Jennifer Liebman, CFE
Using geospatial tracking to shut down sanctions violators
The line between corporate crime and geopolitics has become increasingly blurred as the U.S. sanctions a broad range of bad actors across the globe. Organizations can quickly find themselves in violation of these rules. Here’s how fraud examiners can use one type of technology to prevent this fraudulent behavior.
Written By: Vincent M. Walden, CFE, CPA
Avoiding fake AI online ads and confronting malware problems
Using a computer these days is fraught with fraud risks. That ad about artificial intelligence may be interesting, but a click on the wrong website and you could be hacked. Here are some tips to avoid malware and having your personal identifying information stolen.
Written By: Robert E. Holtfreter, Ph.D., CFE
Fraudsters fake diversity hires to win contracts and more
A Manhattan construction company fakes diversity hires to win government contracts; Jalisco drug cartel members scam elderly U.S. citizens with timeshare scam; and the U.K. government fights fraud with new investigative team.
Written By: Anna Brahce
CFEs should consider trade compliance as a profession
Trade compliance professionals help protect companies, but they also play a role in safeguarding national and global security. This emerging field offers exciting career opportunities for CFEs whose skill sets are a great match for companies that need professionals who can prevent and detect trade violations that threaten real harm.
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Gold standard for inspectors general
ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, praises Cressey Award winner Michael Horowitz's achievements in detecting and preventing fraud in his role as inspector general and chair of the Pandemic Response Accountability Committee (PRAC).
Written By: Bruce Dorris, J.D., CFE, CPA
Banks cratering because of poor risk management
Economic shifts, crypto deposits, weak controls and incompetent administration have led many tech-heavy banks to bite the dust this year. But none of the institutions’ C-suiters should’ve been caught flat-footed. Since the Great Depression, risk management has been the mantra of the money world. And we know that complacency and hubris can lead to fraud. Here’s how the bank collapsed and reminders for organizations to get it right.
Written By: Mary Breslin, CFE, CIA
On the brink of collapse
At 2:07 p.m. on Friday, Nov. 22, 1963, the New York Stock Exchange (NYSE) halted trading shortly after news broke that U.S. President John F. Kennedy had been fatally shot. The market had been on a downward slide, losing $11 billion in capitalization in the previous seven minutes. But hours before Kennedy’s assassination, NYSE president G. Keith Funston was doing all he could to prevent a potential market crash as one of the largest futures commodities scandals of the 20th century started to unravel.
Written By: Donn LeVie, Jr., CFE
Fact finder
Michael Horowitz, the inspector general of the U.S. Department of Justice, has earned a reputation as a straight shooter and an adept investigator. He talks about his latest role as chair of the Pandemic Response Accountability Committee, mistakes made during the disbursement of COVID-relief money, how to avoid a repeat performance of the resulting fraud fiasco and the importance of strictly sticking to the facts.
Written By: Paul Kilby, CFE
Overcoming implicit bias in anti-fraud investigations
Everyone has personal biases, but letting these biases color our views of a suspect can affect the integrity of fraud investigations. Here we explain what unconscious biases are and what fraud examiners can do to overcome them.
Written By: Kate Pospisil, CFE
The rise of employment scams in the digital age
As if finding gainful employment isn’t hard enough, job seekers now must be wary of scammers posting false advertising to steal their money and personally identifiable information. Here we look at why employment scams are on the rise and how to spot the red flags.
Written By: Mandy Yousif, CFE
Don’t allow trusted ‘Radars’ to subvert internal controls
All organizations have employees who are so smart, energetic and indispensable that they can manage integral functions without close supervision. But some of these “Radars” will succumb to their freedom and rob you blind.
Written By: Daniel Porter, CFE
ACFE continues to grow and thrive
The ACFE, the world’s largest anti-fraud community, continues to thrive in an increasingly challenging environment, growing its membership, expanding its presence across the globe and becoming more diverse and inclusive. That’s the message from the most recent ACFE Report to Members.
Written By: Anna Brahce
Four strategies for increasing organizational agility
Rapid changes in technology have meant that work environments now demand faster decisions at all levels, creating the type of conditions where fraudsters thrive. Here we look at how organizations and fraud examiners can best face these challenges in an increasingly agile age.
Written By: Donn LeVie, Jr., CFE
Tracking truth
Miranda Patrucic has exposed corruption across Central Asia and in Europe. The award-winning journalist talks about her experiences and the challenges she’s faced in tracking down corrupt officials across the globe and why they still evade the law.
Written By: Paul Kilby, CFE
The enemy within: Betrayal of leaders
When an accountant raised questions to his organization’s management in 2016 about the possible manipulation of employee remuneration at an Indonesian mining operation, little did he know that he was pulling the string that would unravel a larger fraud scheme involving top executives. Once discovered, though, the fraudsters’ downfall came quickly.
Written By: Esther Roseline, CFE, Dominic Blackshaw, CFE
PPP’s complicated rules blurred lines between fraud and honest mistakes
Many U.S. businesses willingly defrauded the government’s Paycheck Protection Program loan program. But PPP’s byzantine procedures, applicants’ mistakes and some banks’ disinterest might have inadvertently caused well-meaning applicants to receive money they shouldn’t have. Now investigators must sift the wheat from the chaff.
Written By: Charles Rabeno, Ed.D., CFE
Judge closes 1MDB chapter with 10-year sentence and more
Former Goldman Sachs banker Roger Ng receives jail sentence for money laundering and violating anti-bribery laws; in Chicago a woman used information stolen from dozens of dead people to defraud the government of over $45,000; the Texas Department of Public Safety (DPS) left 3,000 Asian Americans vulnerable to identify theft by unknowingly sending multiple driver’s licenses to a New York-based Chinese crime group.
Written By: Anna Brahce
The home front
While fraud examiners are hard at work keeping their organizations safe from scammers and other criminals, they must also think about how their loved ones can fall victim to fraudsters’ wily ways. Here we interview CFEs about how they keep family and friends safe.
Written By: Jennifer Liebman, CFE
Barry Tong, CFE
Barry Tong, CFE, wanted to be an accountant ever since he was in secondary school, but it wasn’t until he joined a Big Four firm’s insolvency and restructuring department that he became interested in fighting fraud. Now, Tong spearheads fraud investigations as Grant Thornton China’s national leader of Forensic and Investigation Services (FIS) based in Hong Kong.
Written By: Jennifer Liebman, CFE
Profile of an improper (corrupt) payment
What are the telltale signs of an improper payment? Here we explore the leading research into what can be measured and observed to find common patterns and profiles around improper, and sometimes corrupt, payments.
Written By: Vincent M. Walden, CFE, CPA
Tips and tricks for finding people online
Identifying and finding people efficiently online is a useful skill for fraud examiners, business investigators and due diligence professionals. Many cases require us to follow paper and money trails by searching for subjects, potential witnesses and former employees, who are generally more willing to speak about their workplaces and colleagues than current employees.
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Is ChatGPT the newest gateway to fraud?
Just weeks after OpenAI, a U.S. artificial intelligence (AI) research laboratory, launched ChatGPT in November last year, the U.S.-Israeli cybersecurity firm Check Point noticed a spike in dark web conversations. The AI chatbot has astounded, but also unnerved, the public with its ability to do many human tasks from coding to passing an MBA-level exam to writing flawless text. However, in a popular hacking forum, a post entitled “ChatGPT – Benefits of Malware” described how one fraudster used the AI tool to recreate malware strains, such as so-called stealers that infiltrate computer systems, search for specific types of files and then remove those files without the owners’ knowledge. While the creation of malware is nothing new, the discussion on the dark web was disturbing because, as Check Point notes, its apparent purpose was to show less tech-savvy fraudsters that they too could use ChatGPT to code for malicious purposes. (See “Cybercriminals starting to use ChatGPT,” Check Point, Jan. 6, 2023.)
Written By: Mary Breslin, CFE, CIA
Fraud lessons from the ‘killer nurse’
Charles Cullen, a former registered nurse, is serving 11 consecutive life sentences for murdering 29 patients in 16 years at New Jersey and Pennsylvania hospitals. The author, who helped investigate the case, shares organizational deficiencies that have helped him in subsequent fraud investigations.
Written By: Barry Bittenmaster, CFE
A journalist’s battle to expose corruption
“Corruption is an integral part of humanity,” says investigative journalist Miranda Patrucic in this issue of Fraud Magazine. It’s a sad summation, but it rings true. According to the ACFE’s Occupational Fraud 2022: Report to the Nations, corruption was indeed the most common fraud scheme in every global region we surveyed. Thank goodness the public has strong journalists like Patrucic, the focus of our cover story and the recipient of the ACFE’s Guardian Award, which we’ll present to her at the 34th Annual ACFE Global Fraud Conference in Seattle, June 11-16. The award honors journalists whose determination, perseverance and commitment to the truth have contributed significantly to the fight against fraud.
Written By: Bruce Dorris, J.D., CFE, CPA
Veterans’ frauds, caution in answering online questions and ways to avoid all scams
Prior to the U.S. Veterans Day holiday, Winston Mittens, a retired Army staff sergeant, answered a call from someone who said he worked at Mittens’ bank. The caller said the bank was beefing up its security, so it needed Winston to verify his account information and Social Security number, which he did. But in the next week, Winston visited his bank to deposit a check and found he had a zero balance in his account. A bank official told Winston that someone had used his identity to steal his banking credentials and drain his money. Lucky for him, the bank covered the fraud and restored his balance. The bank also changed his account credentials so he hopefully wouldn’t be a victim again.
Written By: Robert E. Holtfreter, Ph.D., CFE
When subjects admit guilt but they’re innocent
Why would someone confess to a crime they didn’t commit? Often an interviewer, trained to be accusatory and aggressive, will pressure subjects to admit guilt. Here’s how fraud examiners — rightfully constrained by higher ethics guardrails — can prevent false confessions that result in wrongful terminations and improper convictions, and ruin innocent subjects’ lives, while leaving the guilty free to commit additional crimes.
Written By: Beth Mohr, CFE
Food fraud and more
Fraudsters are using dilutions, substitution, counterfeits and mislabeling to infiltrate the global food market; a software engineer in Washington steals from his employer in a scheme inspired by the comedy movie "Office Space"; executives in South Korea are convicted in a $1.5 billion V Global scam.
Written By: Anna Brahce
Iryna Shkraba, CFE
Iryna Shkraba, CFE, has conducted anti-fraud investigations in almost a dozen European countries. She’s a governance, risk and compliance professional who’s worked for organizations such as EY as well as financial industry companies. And while Shkraba is currently based in Vienna, Austria, she takes every chance she can to visit her family and friends in her hometown of Kyiv, Ukraine.
Written By: Jennifer Liebman, CFE
Sleuths on the cyber trail
Andy Greenberg first became fascinated with the dark web and the tools that give people anonymity online when he landed a job as the security reporter at Forbes in the mid-2000s. It seemed at the time that law enforcement and even intelligence agencies couldn’t lift the virtual veil that hid all the wrongdoing taking place in this relatively new digital world.
Written By: Paul Kilby, CFE
Taming fraud in crypto’s Wild West
The meteoric rise and sudden downfall of crypto exchange FTX, and its founder Sam Bankman-Fried, is likely to become an essential case study for fraud examiners seeking to understand the new Wild West of the financial markets. Here we look at what happened and lessons learned from possibly one of the largest U.S. financial frauds.
Written By: Paul Kilby, CFE
Rebrand, reinvent and repurpose your fraud expertise
Achieving the fraud-fighting career of your dreams is more than just a matter of luck. Creating a strategy and executing a plan for cultivating your personal brand can help establish your skills and expertise, while differentiating you from others in the field. Here’s how to get started.
Written By: Donn LeVie, Jr., CFE
Lender beware
When inflation skyrockets, central banks increase interest rates to slow spending. Here, the author details why periods of high inflation might lead to high rates of fraud in the lending industry and what lenders can do about it.
Written By: Justin Davis, CFE
Fraud in reconstruction: What awaits Ukraine?
When countries devastated by war, natural disasters or other calamities must rebuild, valiant efforts to rise from the rubble must be paired with another intangible quality: integrity. But prior experience with hastened economic relief underscores the need to couple that relief with a fortifying effort to deter corruption.
Written By: Latesha Love-Grayer, CFE
Treating fraud in independent pharmacies
In 2020, the U.S. Department of Justice (DOJ), in its largest health care fraud enforcement action to date, indicted 345 various health care professionals for submitting $6 billion worth of fraudulent claims to federal programs and private insurers. Among those ensnared in the takedown were pharmacies, which were accused of scheming with telemedicine entities and other licensed health care providers to purchase unnecessary medical equipment and prescription pain medications in exchange for illegal kickbacks and bribes, as well as the illegal distribution of opioid drugs. (See “National Health Care Fraud and Opioid Takedown Results in Charges Against 345 Defendants Responsible for More than $6 Billion in Alleged Fraud Losses,” U.S. Department of Justice, press release, Sept. 30, 2020.)
Written By: Meghan Sebaugh, CFE
Blind faith
ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, reflects on the lack of oversight and controls that led to the fall of FTX and the importance for CFEs to prevent and detect fraud in the growing cryptocurrency market.
Written By: Bruce Dorris, J.D., CFE, CPA
Discount fraud
Sales of “gray market” products generally are viewed as legal, but diversion of deeply discounted products from authorized distribution networks is often based upon fraud. Here we examine schemes to illicitly obtain millions of dollars of discounts through this pervasive but relatively unknown type of fraud. And we offer ways to ward off fraudsters’ efforts.
Written By: Daniel Mascaro, CFE
From many, comes one (algorithm)
Recent anticorruption research shows that when companies collaborate to share information about third-party payments and high-risk transactions, they have a 25% greater chance of predicting improper payments than when each company’s model is performed in isolation. A new data-sharing consortium led by a nonprofit at MIT is working to make such collaboration possible.
Written By: Vincent M. Walden, CFE, CPA
CFEs have the edge in pay, high work satisfaction, 2022 Compensation Guide shows
Certified Fraud Examiners (CFEs) earn 17% more than their non-certified counterparts, and 62% report being happy on the job. These are just a few of the insights from the Association of Certified Fraud Examiner’s (ACFE) 2022 Compensation Guide for Anti-Fraud Professionals, which also revealed a slow trend toward gender diversity in the anti-fraud profession and changing workplace habits since the COVID-19 pandemic.
Written By: Jennifer Liebman, CFE
Battling fraudulent product substitution
Because of the enormous amount of government funding that goes into the defense sector, the U.S. military has long suffered its fair share of fraud. And counterfeit components/product substitution — which is really a category of procurement fraud all on its own — remains an ongoing problem.
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‘The devil made me do it’ and other unethical behavior rationalizations
Growing up, we all tried at some point or another to squirm our way out of being accountable for something we shouldn’t have done or said. (I admit to throwing my little brother under the bus a couple of times, but my parents were wise to that approach.) We spun the facts or rationalized our action to avoid punitive measures; in short, we wanted to preserve our standing in the family unit and stay in Mom and Dad’s good graces. But alas, many of us suffered some parental wrath as a consequence for our behavior — and the fictitious tales we told to rationalize it. Our parents knew something we kids didn’t fully appreciate: Rationalization allows us to wander further away on the far side of truth. As adults gaining experience in our respective professions, we learn about compliance and ethics, but we also add to our repertoire of rationalizations.
Written By: Donn LeVie, Jr., CFE
Better together
When sailing, mariners must always know the wind’s direction and mind their points of sail — a boat’s course relative to the wind. Sails can’t catch the wind in what is known as the no-go zone, approximately 45 degrees on either side of the wind’s direction. But sailing close-hauled, or as close to the wind as possible, mobilizes sails. (See “What is Sailing Close to the Wind?” Life of Sailing.) Indeed, sailing requires working with the wind to move ahead. Managing fraud risk and investigations is a similar process: Just as the mariner works with the wind, collaboration among teams of experts is the best way to propel forward. When people come together and share their expertise, they can truly succeed.
Written By: Raina Verma, CFE
Preventing fraud through due diligence
In March 2019, former New York Lt. Gov. Brian Benjamin, at the time a state senator, asked a real estate developer to help procure a number of small-dollar contributions for his latest political campaign. Benjamin’s unnamed contact, who also led a nonprofit organization, later told investigators from the U.S. Department of Justice (DOJ) that he initially rebuffed Benjamin’s request for several reasons: He didn’t have experience “bundling political contributions” in that manner; he was focused on fundraising for his own nonprofit; and any potential donors he could target were the same ones from whom he intended to solicit contributions for the nonprofit.
Written By: Mandy Yousif, CFE
A house of cards and more
In the U.K., a man is arrested for attempting to sell a house he was renting; tech workers in Southeast Asia are conned into working for cybercrime rings; a 58-year-old woman receives a prison sentence for heading one of the biggest marriage fraud conspiracies in U.S. history.
Written By: Anna Brahce
Kathryn Wilson, CFE
Kathryn Wilson, CFE, learned in high school that accounting encompasses so much more than crunching numbers — it’s also about following the money. And accounting isn’t just a job for Wilson, who conducts risk assessments and devises ways to prevent fraud as a senior manager in CohnReznick’s government and public-sector group; it’s also a family affair with her two brothers and late grandfather in the profession.
Written By: Jennifer Liebman, CFE
Build it right, and they will come
Today’s world is fraught with geopolitical sanctions, fraud, corruption and cyber warfare, and fueled by rapidly emerging technologies that continue to change how we approach business and risk mitigation. Companies large and small are enduring a costly, but necessary, shift to digital, while transitioning operations to the cloud and scrambling to protect their systems from intrusion. With change comes risks, which is why companies often look to anti-fraud and/or forensic technology professionals to help them build the preventive and detective anti-fraud controls needed to protect their business and align with regulatory expectations.
Written By: Vincent M. Walden, CFE, CPA
Fake Geek Squad scams and what to do if you fall victim to credit card fraud
Kerry Binder thought of herself as a real computer jock. When she had a problem with her computer that she couldn’t solve, she contacted the Geek Squad, retailer Best Buy’s tech support service, for help. One day she received a text message saying she’d been charged hundreds of dollars to renew her Geek Squad membership. She knew nothing about this and thought that this was an error. The text message said Binder could dispute the charge or cancel her membership by calling a phone number within 24 hours. When she made the call, a scammer told her that he had to gain remote access to her computer to help her. When he’d finished rummaging around in her computer, he told her that he’d corrected the error and apologized for the mistake.
Written By: Robert E. Holtfreter, Ph.D., CFE
5 most scandalous fraud cases of 2022
It’s hard to believe, but it’s been almost three years since the start of the COVID-19 pandemic, and fraud fighters are still grappling with the fallout of frauds tied to government-relief funds. Yet, despite the massive scale of pandemic frauds and the staggering loss of money, governments made some progress after enacting task forces to investigate COVID-related frauds and recover stolen funds. And while some of the most scandalous frauds of 2022 were connected to the pandemic, it wasn’t all COVID all the time. Indeed, there were plenty of other frauds we believe will live on in infamy and serve as essential case studies for fraud examiners in the years to come. (See “Justice Department Announces COVID-19 Fraud Strike Force Teams,” U.S. DOJ press release, Sept. 14, 2022 and “Secret Service recovers $286 million in stolen COVID relief funds,” by Julia Ainsley and Sarah Fitzpatrick, NBC News, Aug. 26, 2022.)
Written By: Jennifer Liebman, CFE
Use advanced tools to fight Medicare fraud
Fraud, waste and abuse emerge in most areas. But, theoretically, the health care system is where most people should least expect them. Of course, fraud has long been a problem in this sector. And most recently Medicare Advantage — the private-sector arm of the U.S. national health system for elderly Americans — and the insurers that manage it have come under intense scrutiny for allegedly submitting false diagnosis codes to inflate payments from the government.
Written By: Bruce Dorris, J.D., CFE, CPA
Thwart procurement fraud
As protests raged in Chile in 2020 over the cost of living and inequality, the government sought to procure body cameras for the police to monitor events on the ground. After going through a public bidding process, U.S. telecommunications equipment provider Motorola Solutions won the business to supply 300 cameras at a cost of close to 400 million Chilean pesos, or about $340 each at today’s exchange rate. Soon thereafter, those involved in the bidding process found themselves under investigation for irregularities. According to the local press, government officials accepted Motorola’s bid even though the company submitted its offer on the electronic procurement portal outside the hours stipulated by the bid rules. (See “El informe de Contraloría que complica a Katherine Martorell, la actual vocera de Sichel, por millonaria compra de cámaras GoPros para Carabineros,” El Mostrador, Oct. 15, 2021.)
Written By: Tom Caulfield, CFE, CIG, CIGI, Sheryl Goodman
The Medicare disadvantage
Medicare Advantage, the private-sector arm for elderly care, is fast becoming the new battle front in the fight against health care fraud in the U.S. Here's why, and what fraud examiners think should be done.
Written By: Paul Kilby, CFE
What can CFEs learn from private investigators?
There’s a good possibility you’re a Certified Fraud Examiner. But you’re probably not a licensed private investigator. Are you missing out? Not necessarily, but some CFEs believe their hard-won PI skills burnish their fraud examiner careers and make them better professionals.
Written By: Dick Carozza, CFE
Catching health care fraud with statistical graphics
Inflating codes that determine how much Medicare and Medicaid pay to health care providers is common practice among fraudsters. Now they’re doing it in increasingly sophisticated ways. Here we examine how statistical graphics can help spot upcoding in what can be an arcane and complicated billing process.
Written By: Terry Allen, Ph.D., William McBee, CFE, LPI
Double trouble: Protect your charitable gift-matching program
Many companies have charitable programs that match employee donations, supporting causes and people in dire need of the funds. Yet those contributions are also susceptible to fraud. Here’s one story of abuse and what it teaches us about how to prevent this type of scam.
Written By: Brian Molloy, J.D., CFE
Using technology-assisted review to uncover suspicious transactions
Technology-assisted review (TAR) has been used for nearly two decades in e-discovery matters to reduce costs, increase efficiencies and speed up the often-tedious task of manually reviewing emails and user documents for relevance. Fraud examiners can also use TAR techniques (with some guard rails) to find potentially improper payments (PIPs) or transactions in structured data.
Written By: Vincent M. Walden, CFE, CPA
A matter of trust
Stories of criminals hiding ill-gotten gains in offshore trusts have become all too common. But a new age of transparency has begun as governments look to lift the veil covering this secretive world. Here we examine the history of offshore trusts and how fraudsters have gamed the system to their advantage.
Written By: Leonidas Charitos
Navigating the choppy waters of internal whistleblowing
All whistleblowers pay huge costs for their honesty and courage. But internal whistleblowers, who have few legal protections, endure the greatest hardships. Here’s what you need to know to support and encourage them and to protect yourself if you ever become a whistleblower.
Written By: Carolyn Conn, Ph.D., CFE, CPA, Grace Schepis, Stephen M Kohn
Fraud and the North Korean cyberthreat
North Korean state-sponsored cyberfraudsters are attracting increasing attention and, so far, have been outsmarting the government authorities pursuing them. Here’s what fraud examiners can learn from the authoritarian regime’s tricks to exploit the latest technology and what they need to know to stop them.
Written By: Patrick Westerhaus, CFE, CPA
Pirates of the North Atlantic
Commercial fisherman, Carlos Rafael, known as “the Codfather” in New Bedford, Massachusetts, spent years selling thousands of pounds of misrepresented catch under the table for cash, laundered his money and overvalued his business to the IRS, among other crimes. His illegal monopoly predated well-intentioned conservation efforts of governments and citizen groups that inadvertently might have created an environment ripe for fraudulent fishing and reporting activities.
Written By: Donn LeVie, Jr., CFE
Inheritance scam, improving cybersecurity protection and what to do if you get scammed
Susan Jones received a letter from a law firm that told her that she might be the recipient of a long-lost relative’s multimillion-dollar inheritance. To process the claim, she wired the firm a deposit, her Social Security number (SSN) and bank account numbers, but she didn’t receive any correspondence after that. Two weeks later, her bank account had a zero balance.
Written By: Robert E. Holtfreter, Ph.D., CFE
Preparing for deposition war
Facing skepticism due to his age and inexperience, a young expert witness prepares for his first deposition with intense study and guidance from seasoned colleagues. What starts with an intimidating test from the plaintiff’s counsel turns into a lesson in composure and confidence, proving that preparation is the key to holding your ground in the courtroom.
Written By: Alexander Dokuchaev, CFE, CPA/ABV
Finding ‘Fat Leonard’ and more
Authorities apprehend Leonard Francis, who recently escaped house arrest after involvement in Naval corruption case; the Federal Trade Commission sues Roomster Corp. for using false apartment listings and fake reviews; Police in China arrest criminal gang responsible for major banking scandal
Written By: Jennifer Liebman, CFE, Anna Brahce
Gogi Overhoff, CFE
Long before she became a fraud examiner, Gogi Overhoff, CFE, had her sights set on becoming an actress. But instead of a life on stage, she shines a spotlight on licensed accountants accused of defrauding their clients in her role as an investigator for the California Board of Accountancy.
Written By: Jennifer Liebman, CFE
Old tactics, new landscape
ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, discusses the importance of understanding cybercrime and the tactics used by cybercriminals to prevent fraud in an increasing complex financial landscape.
Written By: Bruce Dorris, J.D., CFE, CPA
Europe's fraud frontlines
Catching and preventing fraud in the European Union is no easy task, and its anti-fraud agency OLAF has more than its fair share of wrongdoing to contend with. We talk to Ernesto Bianchi, OLAF’s acting deputy director-general of operations and investigations, about challenges ahead as the EU prepares to disburse money from its biggest-ever budget.
Written By: Paul Kilby, CFE
A roadmap for managing ESG risks
Fraud examiners don’t need cutting-edge techniques to fight fraud in the burgeoning area of environmental, social and governance (ESG) initiatives. They can simply build on existing tools and guides to mitigate those risks, according to the latest report from the ACFE and Grant Thornton LLP, "Managing Fraud Risks in an Evolving ESG Environment."
Written By: Jennifer Liebman, CFE
Cross-border payments fuel international cybercriminals
Many organizations that have nurtured new business via cross-border e-commerce sales are vulnerable to payments fraud, especially during the COVID period. Here’s how to fight global cybercriminals at their own game.
Written By: Jason Nader
Inorganic materials and more
An organic farmer is busted for selling non-organic grains; Ukrainian law enforcement arrest cybercriminals for a phishing scheme against Ukrainian citizens; Salt Lake City 'Real Housewife' Jen Shah and and rapper Nuke Bizzle plead guilty to fraud schemes.
Written By: Jennifer Liebman, CFE
Ricky D. Sluder, CFE
Ricky D. Sluder, CFE, first discovered a knack for solving fraud cases when he was a detective in Dallas County, Texas. Now the head of healthcare value engineering for Shift Technology is using his investigative know-how to help other investigators better prevent and detect fraud.
Written By: Jennifer Liebman, CFE
Fraud Triangle Analytics, 12 years later
It’s been over a decade since we examined Fraud Triangle Analytics, a method of risk ranking individuals by applying keywords for pressure, opportunity and rationalization to electronic communications. Here we look at how advancements in technology have helped improve FTA in today’s battles with tech-savvy fraudsters.
Written By: Vincent M. Walden, CFE, CPA
Stanch the flow
Fraudsters have stolen an unprecedented amount of U.S. COVID-19 relief funds — possibly more than the GDPs of many world economies. But millions of dollars had already been streaming from government programs long before the pandemic, and those cases hold valuable lessons. Here’s how to stanch the flow of money from vulnerable agencies.
Written By: Linda Miller, Joe Abeska, Zachary Rosenfeld, Taylor Larimore, CFE
Scams abound: phony online job postings, student loan forgiveness and much more
Fraudsters want your personally identifiable information. And they’ll steal it by trying to convince you to apply for phony jobs, respond to a fake alert that illegal goods were shipped in your name and have been intercepted, and bogus student loan forgiveness programs. Foil them before they try to punk you.
Written By: Robert E. Holtfreter, Ph.D., CFE
Linguistic weapons of mass persuasion
A vocabulary of influence can be an effective advantage for anti-fraud professionals when implemented ethically and with forethought. But fraudsters use linguistic tools, too. Learn how to recognize the difference between the two and not be fooled.
Written By: Donn LeVie, Jr., CFE
Back together again
Fraud examiners came together for the first time since the outbreak of the COVID-19 pandemic at the 33rd Annual ACFE Global Fraud Conference in June. The association’s first hybrid event for both in-person and virtual participants enjoyed record attendance and has proven to be a winning formula.
Written By: ACFE Staff
Quantum ready
Fraud examiners working in financial services are familiar with cutting-edge innovations to fight fraud. But quantum computing may be a game changer. Here we explore how this groundbreaking technology could help CFEs and some of the dangers it might entail.
Written By: Mason Wilder, CFE, Stefano Siggia
Fighting fraud on the new frontier
ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, discusses quantum technology to fight fraud and how important it is for CFEs to anticipate fraudsters using the technology as well.
Written By: Bruce Dorris, J.D., CFE, CPA
Culture, COVID and change
The world is changing quickly, and fraud fighters must adapt to the times. The ACFE Board of Regents relate their experiences in fighting fraud, waste and abuse, and the new battle opening up on the technological front.
Written By: Jennifer Liebman, CFE, Paul Kilby, CFE
Fighting fake identities
Fraudsters create identities from bits and pieces of fictitious or stolen personally identifiable information. The U.S. Federal Reserve provides a one-stop online toolkit with downloadable resources to help educate financial institutions and other businesses about synthetic identity fraud and how to protect themselves.
Written By: Mike Timoney, CFE
The attorney as fraud investigator
Choosing an investigator with the right skill set is key to successfully resolving a fraud case. An attorney is often best suited for the role but not always. Here we look at the pros and cons of using someone with a legal background to investigate fraud and the challenges of wearing two hats.
Written By: J. Cameron Thurber, J.D., CFE
ACFE Foundation’s Ritchie-Jennings Memorial Scholarship awards students $56,000 in funds for 2022-2023 term
2022-2023 Ritchie-Jennings Memorial Scholarship winners.
Written By: Jennifer Liebman, CFE
Netflix and fraud and more
Netflix investors sue the streaming service for securities fraud; Spanish police crack a luxury car scam; Lincoln College shuts down in part because of a ransomware attack.
Written By: Jennifer Liebman, CFE
CFEs make significant advancements over past 10 years, 2022 Report to the Nations shows
The ACFE's 2022 survey of CFEs around the world and the occupational frauds they have detected and investigated
Written By: Jennifer Liebman, CFE
Kenneth Boey, CFE
As a child, Kenneth Boey read mystery novels and dreamed of fighting crime as a police officer. Now, Boey is a full-fledged fraud fighter, ensuring that his company, Etiqa Insurance, has strong controls in place to protect its systems from threats.
Written By: Jennifer Liebman, CFE
Sowing the seeds of success
ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, discusses Cressey Award winner, Tony Kwok and his success fighting corruption in Hong Kong. Kwok was the deputy commissioner of Hong Kong's anti-graft agency, the Independent Commission Against Corruption (ICAC). Dorris also discusses the growing problem of corruption all over the world.
Written By: Bruce Dorris, J.D., CFE, CPA
It's not all about money
When a cybercriminal breaches an organization’s data and financial systems, management automatically begins investigating the culprit’s financial motives. But often hackers are just curious to see if they can invade mainframes. Or they’re bored and want to have some fun. Here’s how to investigate cybercriminals’ minds, understand their nuanced purposes and then prevent more breaches.
Written By: Rasha Kassem, Ph.D., CFE
Building an AI-focused anti-fraud company
Artificial intelligence (AI) is changing how businesses run — especially in anti-fraud and compliance. Here we describe how to build an AI-focused, anti-fraud technology company and what mindsets, strategies and tactics work well for organizations and entrepreneurs.
Written By: Vincent M. Walden, CFE, CPA
Beware of social media takeovers and compromised credit reports
It seems like identity thieves never sleep. Now they want to imitate your friends and hack into your social media accounts. And they want to compromise your credit scores. Here’s how to protect yourself and your loved ones.
Written By: Robert E. Holtfreter, Ph.D., CFE
Promises and pitfalls
Amid the current enthusiasm for all things crypto, interest in decentralized finance (DeFi) has exploded. Proponents think it will help democratize finance. But fraud is running rampant in this corner of the market. Here’s how it works and why fraud examiners should be paying attention.
Written By: Paul Kilby, CFE
Billing fraud — a bird’s-eye view
Billing fraud may not capture all the big headlines, but it’s pervasive, hard to detect and has been growing since the outbreak of the COVID-19 pandemic. Here are some recent case studies and a bird’s-eye view of how and why this type of fraud thrives.
Written By: Rick Roybal, CFE
Facilitator, moderator or mediator
We’ve all been in meetings where prominent issues needed resolution, but after a couple of hours, the team made little or no progress. A neutral, third-party facilitator, moderator or mediator can help run meetings more efficiently and navigate all parties to desirable outcomes.
Written By: Donn LeVie, Jr., CFE
Fighting the good fight
Tony Kwok knows a lot about corruption and how to fight it. He was the former deputy commissioner of the Independent Commission Against Corruption, Hong Kong’s ace anti-graft agency. He talks to Fraud Magazine about how it changed the city forever and what he’s doing now to help other countries fight fraud and corruption.
Written By: Paul Kilby, CFE
‘Fruitcake fraud’ teaches small businesses lessons in internal controls
Management at Collin Street Bakery, the maker of famous fruitcakes, trusted its close-knit family of employees. Big mistake. That faith cost the company close to $17 million in a massive fraud that serves as an excellent case history.
Written By: Steve C. Morang, CFE
Managing troubled projects
During their careers, fraud examiners will inevitably run into major problems on a high-profile project such as a forensic investigation. Human interaction can be a messy affair and often a major hindrance in project management. Here are tips to minimize cognitive bias and other psychological pitfalls that sabotage the best-laid plans.
Written By: Donn LeVie, Jr., CFE
Fraud and the lure of corporate estimates
What if a company could significantly improve its financial results, regardless of reality? That opportunity exists today. The fallout from the COVID pandemic has made financial estimates increasingly difficult to calculate and open to manipulation and fraud. Here’s why.
Written By: Mary Breslin, CFE, CIA
Strength in diversity
The U.S. Small Business Administration’s Office of the Inspector General faced unprecedented challenges during the COVID-19 pandemic, but a diverse staff was able to weather the storm. Inspector General Hannibal Ware details how his organization built a diverse workforce able to withstand tough times and how other organizations can do the same.
Written By: Hannibal "Mike" Ware, CFE
Documenting corporate deceit
Alex Gibney has documented many fraud cases in his three decades as a filmmaker. From his first big hit in 2005, “Enron: The Smartest Guys in the Room,” to the more recent documentary about Elizabeth Holmes, “The Inventor: Out for Blood in Silicon Valley,” Gibney has long been exploring the psychology of deceit and why bright and talented people turn to the dark side.
Written By: Bruce Dorris, J.D., CFE, CPA
Inside job
While external fraudsters who absconded with billions of dollars in pandemic relief have dominated headlines, less attention has been paid to employees scamming those very same programs. Here we spotlight internal fraud at state agencies and what organizations can do to fight this pernicious type of fraud.
Written By: Suzanne Carlson, Sophia Carlton, CFE
Beware tax preparer and charity scams, plus unemployment insurance benefits fraud
Fraudsters continue to harvest PII by targeting professional tax preparers, compassionate givers and COVID unemployment insurance benefits money.
Written By: Robert E. Holtfreter, Ph.D., CFE
The seven wonders of fraud detection analytics
Fraud is constantly evolving. So too should our technologies for detecting and preventing it. Inspired by the Seven Wonders of the World, I present my seven favorite anti-fraud techniques. Some have been in use for over a decade, some are new and evolving — but all of them are “wonderful.”
Written By: Vincent M. Walden, CFE, CPA
Fraudsters, fakes and flaws
Alex Gibney’s documentaries have covered some of the biggest frauds of our times. The award-winning director talks to us about what he’s learned about the psychology of corporate fraud and more. It might not be what you expect.
Written By: Paul Kilby, CFE
Bankruptcy fraud, which lessened during the pandemic, could increase this year
U.S. bankruptcies — and bankruptcy fraud — greatly decreased during the pandemic because of temporary lifelines. But as government stimulus, pliant lenders, and cheap and easy funding dissipates, we’re seeing crimes rise. Changes in U.S. federal bankruptcy law could accelerate prosecution of bankruptcy fraud.
Written By:
Julie Aydlott, CFE
While conducting forensic and fraud examinations involving small organizations, Julie Aydlott saw just how devastating fraud could be for businesses with limited resources. Aydlott and a colleague founded Business Fraud Prevention, Inc., a nonprofit dedicated to providing free training and resources to help small business owners implement internal controls and fight fraud.
Written By: Jennifer Liebman, CFE
Organizations race to adopt new anti-fraud technologies after slow start, ACFE/SAS technology report shows
The ACFE and SAS release their 2022 Anti-Fraud Technology Benchmarking Report; nominations open for the 2023-2024 Board of Regents
Written By: Jennifer Liebman, CFE
Clobbering cyberfraudsters
Rachel Wilson was a cybersecurity expert before the broader world was even aware of such threats. The former head of the U.S. National Security Agency’s cyber exploitation operations now works to protect Morgan Stanley’s wealth management clients and systems. She talks to us about the latest dangers lurking in cyberspace and much more.
Written By: Paul Kilby, CFE
Former Czech prime minister indicted; will stand trial for fraud and more
The former Czech prime minister is indicted for fraud; A Wisconsin dentist breaks his patients' teeth as part of an insurance fraud scheme; The U.S. Department of Justice appoints a chief prosecutor to handle pandemic fraud.
Written By: Jennifer Liebman, CFE
Vice President and Chief Operating Officer Jeanette LeVie, CFE, looks back on 30 years with the ACFE
Jeanette LeVie, CFE, the ACFE's vice president and chief operating officer, celebrates her 30th anniversary at the leading anti-fraud training and education organization.
Written By: Jennifer Liebman, CFE
Fraud infecting commercial-loan agreements
Commercial-loan agreements can pressure borrowers and lenders to cross the line to avoid bankruptcy or fleece customers. Here are some common fraud schemes that desperate parties can use in this cat-and-mouse game.
Written By: Roger W. Stone, CFE, Philip Duffy
Fighting fraud and achieving success
As organizations and people across the globe observe International Women’s Day in March, the author talks to anti-fraud professionals about the challenges they face in the field, their successes and how they’re overcoming gender bias.
Written By: Beth Mohr, CFE
Three new members join the ACFE Board of Regents for 2022-2023 term
CFEs elect three new members to the ACFE's Board of Regents for the 2022-2023 term.
Written By: Jennifer Liebman, CFE
Wirecard's whistleblower
Pav Gill is now widely recognized as the internal whistleblower who helped expose corruption and fraud at the now-defunct German fintech Wirecard. In a little over a year, his professional and personal life was turned upside down. Gill tells Fraud Magazine his story and the lessons he learned from this bizarre journey.
Written By: Paul Kilby, CFE
Fraud examiners have a plethora of data analytics tools
It’s a fact: Data monitoring and analysis can help catch fraudsters. Here’s a primer on incorporating data analysis into your organization along with the latest ACFE tools.
Written By: Martin J. Coe, DBA, Olivia Melton
Monica Meeks, CFE
Monica Meeks is a U.S. Army veteran and veteran fraud investigator who first honed her fraud-fighting skills as a service member probing credit card fraud committed by Army officials. Now the financial services investigator for the Tennessee Department of Commerce and Insurance, she shares lifelong lessons with students and fellow veterans, educating them about fraud and the value of earning the CFE credential.
Written By: Jennifer Liebman, CFE
Does your fraud risk management program actually work, in practice?
Global anti-fraud and compliance enforcement is on the rise, and regulators want proof that fraud risk management programs are effective. Here we look at some of the hard questions organizations need to ask and some examples of how companies have updated their systems to tackle fraud in the post-COVID environment.
Written By: Vincent M. Walden, CFE, CPA
Wirecard's sentinel helps trigger anti-fraud regulations
The ACFE honors Pav Gill as the Wirecard whistleblower.
Written By: Bruce Dorris, J.D., CFE, CPA
Mirage buildings
Deficient due diligence during the pandemic has allowed real estate investment schemes to proliferate amid a boom in property prices. Consulting fraud examiners and those who work for potential investors and financial institutions can help prevent these extravagant frauds.
Written By: Joel Cohen, CFE, Ferve Khan, Esq., Camille C. Bent, Esq., Michael A. Sabella, Esq.
Fraudsters fleecing with child tax credits and QR scams
U.S. federal government agencies will never text, email or contact citizens on social media or via robocalls. But scammers will. Here’s information on the child tax credit, broadband benefit program, pandemic-related economic payments and fake QR frauds.
Written By: Robert E. Holtfreter, Ph.D., CFE
Blowing the whistle
Countries across the world are increasingly recognizing the importance of whistleblowers in the fight against corruption and fraud. Here’s some useful background for CFEs wanting to know about the latest whistleblower protections and legislation.
Written By: Tom Caulfield, CFE, CIG, CIGI, Sheryl Goodman
Cat and mouse
Digital fraud has surged as the COVID-19 pandemic only accelerated the use of computers and cell phones for everything from banking to shopping. Here’s the latest on the evolving threat landscape and what CFEs and security experts are doing to stop cybercrime.
Written By: Kevin M. Alvero, CFE
No-fault car insurance scam, tax return fraud and more
Thirteen people indicted for a $100 million no-fault car insurance scam, sisters perpetrate a tax return fraud scam and Pakistan contemplates banning cryptocurrency.
Written By: Jennifer Liebman, CFE
Green gremlins
Having an environmental, social and governance strategy has become all-important for companies. But as criticism over misleading and fraudulent claims grow, regulators are clamping down and pushing to clarify ESG disclosure rules. As they do in financial reporting, CFEs will have a big role to play in this hot but nascent corner of the market.
Written By: Paul Kilby, CFE
Banish ‘comfortable inaction’
Most organizations need vendors to conduct business, but they’re often lax in investigating firms before they use their services. Here are tips for vetting your vendors and avoiding serious fraud problems.
Written By: Joseph M. Palmar, CFE, CPA/CFF
Fraud's fertile breeding ground
Any economic disruption leaves businesses vulnerable to fraud both from within and outside an organization. Here we look at how today’s bottlenecks along global supply chains are creating the potential for financial wrongdoing in the coming months and what fraud examiners and auditors should know to prevent it.
Written By: Stephen Pedneault, CFE, CPA/CFF
Analyze potential whistleblowers with these psychology profiles
Cultivating whistleblowers is harder work than persuading traditional interviewees to talk during an investigation. Use these profiles to categorize Victims, Avengers, Samaritans and Intellectuals.
Written By: Andrew Thompson, CFE
Golden opportunities
Tom Golden’s latest thriller is not only entertaining but it’s also a handy case study of a fraud investigation. The veteran fraud investigator and forensic accountant talks to us about what he’s learned, how the ACFE made all the difference to his illustrious career and why we need more CFEs.
Written By: Paul Kilby, CFE
5 most scandalous fraud cases of 2021
Each year always brings a fresh array of fraud-related scandals, and 2021 was no different. The massive theft of COVID-relief funds continued to play out, but other notable schemes hit the headlines. Here we list the most scandalous of the lot.
Written By: Jennifer Liebman, CFE
Attack bid-rigging, price fixing and other collusion frauds
Price-fixing, bid-rigging and allocation agreements are conspiracies you should always be looking for. These experts in illegal and anti-competitive collusion show you how to detect red flags and prevent these crimes. And they give you tips on how to leverage data analysis and cross-border cooperation.
Written By: Casey Buffalini, CFE, Helen Christodoulou, Esq., Milosz Gudzowski, Esq., Sandra Talbott, Esq.
Fraud risk in a cryptocurrency world
Businesses and consumers across the globe are quickly adopting cryptocurrencies in daily transactions. And many organizations are scrambling to catch up with this evolving technological innovation. Here’s an update on this new means of exchange, key fraud risks and how CFEs can help with the responsible adoption of crypto.
Written By: Vince M. Walden, CFE, CPA
Agents of change
Over the past 20 years or so, Africa has seen an exponential growth in anti-corruption agencies as governments across the continent seek to fight what’s still considered to be an endemic problem. Here we look at the history behind ACAs, some case studies and how CFEs can assist in these efforts.
Written By: Mohammed V.S. Ashraf Khan, CFE
Are your presentations persuasive?
The ability to make a good presentation is a key skill for fraud examiners looking to advance their careers. How you convey your ideas is important. Here are some practical ways to present your thoughts, and it’s not just about putting together a visually appealing PowerPoint.
Written By: Donn LeVie, Jr., CFE
Michael Pocalyko, CFE
Michael Pocalyko found his passion for fighting fraud when a troubled public company asked him to join its board as a fixer. Since then, the CEO of SI — a Washington D.C.-based intelligence and cyber-sector professional services company — has investigated numerous cases involving governments, corporations, executive misconduct and board-level improprieties. Pocalyko warns that fraudsters are more sophisticated than ever before and to anticipate fraudsters’ creativity.
Written By: Jennifer Liebman, CFE
Supply disruptions and the need for vigilance
From paper to computer chips, products we once took for granted have become precious commodities as the global supply chain cracks under the weight of labor shortages and renewed demand in the wake of the COVID-19 pandemic. And as every fraud examiner knows, whenever there’s a need for a product or service, fraudsters are there to exploit it for their own gain.
Written By: Bruce Dorris, J.D., CFE, CPA
Reflecting on Enron and lessons learned
When I first started teaching fraud at the university level about 20 years ago, I had no idea that I was about to be handed a case study like no other. A few months later the now-infamous accounting scandal at Enron hit the headlines, and the once-celebrated energy firm collapsed in disgrace soon thereafter.
Written By: Bruce Dorris, J.D., CFE, CPA
Case of the empty crates
Fraudulent use of letters of credit has run rampant in Libya amid a chaotic civil war. We look at cases in this opaque corner of the trade finance market to better understand how fraudsters are exploiting a financial instrument that helps drive global trade but also opens doors for wrongdoing.
Written By: Milind Tiwari, CFE
Hot-ticket tokens
Non-fungible tokens are all the rage in the crypto world, potentially revolutionizing the sale of everything from art to real estate. But their complexity and the public’s poor understanding of the new technology make NFTs perfect vehicles for fraudsters.
Written By: Mason Wilder, CFE
Fraudsters misuse the area code 833 to steal PII
In North America, toll-free phone numbers have one of the area codes 800, 844, 855 and several others, including 833. Fraudsters have seized that last area code to entice would-be victims to divulge personally identifiable information. Also, here’s information on a new COVID-19 scam and a gift-card fraud that purportedly involves your boss.
Written By:
Bribery and corruption risks in acquisitions
Amid a surge in global mergers and acquisitions, regulators are increasingly holding organizations responsible for the bribery, corruption and fraud found at the entities they purchase. Data analytics is becoming an important tool in a due diligence process that’s more important than ever for companies seeking to avoid such risks.
Written By: Josh Cox, CFE
How to deal with narcissistic, toxic leaders
Every organization has them: toxic leaders who sacrifice others for their selfish needs. At the very least, these managers can make our jobs difficult or derail our investigations and, at worst, commit fraud. Here’s how to deal with them.
Written By: Murray D. Wolfe, CFE, CPA, CA
Minding your own business: Preventing payroll fraud with internal controls
Small businesses are particularly susceptible to payroll fraud, and they can go under as a result. Here’s a story about a controller who used many tricks in the books to rob a medical practice and some lessons on how to detect and avoid such scams.
Written By: Natalie S. Lewis, CFE
Twenty years later, could another Enron happen?
On Dec. 2, 2001, Enron declared bankruptcy. Governmental and media investigations led to criminal and civil trials of executives Ken Lay, Jeffrey Skilling, Andrew Fastow and many more. U.S. legislation ensued, but did the collapse of this corporation, which ruined so many lives, engender any lessons?
Written By: Sherron Watkins
Preparing for a post-pandemic fraud landscape
The COVID-19 pandemic has created a host of public health crises — and unearthed more opportunities for fraud. Scammers and fraudsters are waiting in the wings to capitalize on lax controls and vulnerable public assistance programs. Here the authors cover ways to enrich and strengthen your organization’s fraud risk management program to reduce threats from bad actors and to help spot the red flags of criminal activity.
Written By: Linda Miller, James Ruotolo, CFE
Timothy Pikas, CFE
Timothy Pikas has spent his career fighting fraud on behalf of various U.S. governmental agencies, including the Air Force Office of Special Investigations, the Nuclear Regulatory Commission and the Department of the Interior. Along the way, the 2021 Certified Fraud Examiner of the Year learned that a solid fraud case takes time to build, and he counsels fellow CFEs to keep the faith and remain patient when conducting their own fraud examinations.
Written By: Jennifer Liebman, CFE
Keeping with the times
The Fraud Risk Management Guide has provided valuable guidance to fraud examiners, company leaders and other professionals since it was published five years ago. Now, the Committee of Sponsoring Organizations of the Treadway Commission and the ACFE — the guide’s creators — will incorporate users’ feedback to produce a stronger, updated edition.
Written By: Vincent M. Walden, CFE, CPA
No truce in cyberwars
With people increasingly living their lives online, fraudsters have never had easier access to potential victims. COVID-19 has only accelerated that trend. Indeed, business is booming for cybercriminals now focused on high-value organizations. Fraud Magazine talks to cyber expert Robert Herjavec and CFEs about how best to tackle this ever-evolving threat.
Written By: Paul Kilby, CFE
Collegiate online cheating, a predictable result of COVID-19, may threaten the workplace
Cheating in online higher-ed classes existed long before the pandemic. Not surprisingly, exam fraud burgeoned when COVID forced most students to work in isolation. CFEs should consider how to minimize the chances for college cheaters to become occupational fraudsters and so limit negative effects for workplaces.
Written By: Carolyn Conn, Ph.D., CFE, CPA, Zachary M. Kelley
Phony drug rehab facilities addicted to fraud
When the U.S. Affordable Care Act was enacted in 2010, the for-profit drug rehab industry was essentially given a blank check to treat people struggling with addiction. In the decade since, many of these underregulated businesses — rife with fraud, waste and abuse — have commoditized addicts. Through the lens of a recent high-profile criminal case in California, here’s the background on the issue, and some advice from experts on how to combat this unique type of provider fraud.
Written By: Jason Zirkle, CFE
Fraudsters use states' COVID-19 lotteries to swipe PII, money
You knew that when U.S. states began holding vaccine lotteries and sweepstakes, fraudsters would get in on the action. Also, here’s what happens when crooks attack their victims — again.
Written By: Robert E. Holtfreter, Ph.D., CFE
Tania Ramirez, CFE
Tania Ramirez started her career as an internal auditor, working at such organizations as Canadian National Railway, McGill University and consultant Protiviti. She soon discovered she had a knack for uncovering dubious transactions. That talent catapulted her into the world of fraud investigations and landed her a dream job at Randstad, a global leader in the human resources services industry, where she now combines both skills to uncover cybercrimes, occupational fraud and other types of fraudulent activity.
Written By: Paul Kilby, CFE
Place 'ESG' on your radar
Organizations are increasingly striving to meet environmental, social and governance (ESG) standards, at least on paper. CFEs may be well versed in the “G” of ESG but they also need to know about the “E” and “S” to understand whether CEOs are truly sticking to the values they tout.
Written By: Vincent M. Walden, CFE, CPA
Adjusting to a new reality
The COVID-19 pandemic changed the way we work and provided an opportunity for fraudsters to scam the populace like never before. The ACFE Board of Regents looks back on its experiences and provides advice on how to fight fraud in this post-coronavirus landscape.
Written By: Paul Kilby, CFE
Global governments' urgent COVID-19 procurements are risks
Fraudsters love a good crisis. Governments worldwide established procurement procedures during COVID-19, but quick actions to save lives often bypassed standard safeguards. Here’s how government agencies during future disasters can limit and/or prevent rampant corruption and fraud.
Written By: Tom Caulfield, CFE, CIG, CIGI, Sheryl Goodman
'Thin-slicing' experience
Intuition, sensitivity to nonverbal cues, pattern recognition — our brains are capable of rapidly processing information to help us make judgments and decisions. This ability is called “thin-slicing.” It can provide another tool for fraud examiners to follow their instincts to the truth but only when we use it properly and recognize its limitations.
Written By: Donn LeVie, Jr., CFE
Deciphering the cyber threat
Cyberattacks have always made headlines. But they’re now occurring more frequently and causing widespread damage. Hackers have broadened their reach by infecting supply chains with ransomware and have recently crippled oil pipelines, meatpacking plants and grocery stores across the globe.
Written By: Bruce Dorris, J.D., CFE, CPA
What's your leadership C4Q?
The C4 quotient — a combination of curiosity, creativity, critical thinking and collaboration — increases with the freedom to explore and innovate in our workplace. Backed by psychology and neuroscience, effective leaders can foster a more engaged and productive workforce, and in turn eliminate instances of fraud and abuse.
Written By: Donn LeVie, Jr., CFE
State of capture
Thulisile “Thuli” Madonsela has probably done more than any single person in South Africa to bust the lid off widespread fraud and corruption during the term of former President Jacob Zuma. She speaks about her experiences during that time and what more needs to be done.
Written By: Paul Kilby, CFE
Revamp controls now to battle burgeoning synthetic ID fraud
Fraudsters combine stolen personally identifiable information from many different individuals to create dangerous Frankenstein identities. Guard against this growing insidious fraud and protect the IDs of your customers.
Written By: Kevin M. Alvero, CFE
Sophia Pretrick, CFE
Since becoming a CFE close to 20 years ago, Sophia Pretrick has been fighting fraud in the Federated States of Micronesia, where she grew up. Early in her career, Pretrick quickly became fascinated with how ubiquitous fraud was and the fact that preventing it could improve the lives of her fellow Micronesians. This year, the U.S. Secretary of State Anthony Blinken awarded Pretrick with the newly created International Anticorruption Champions Award in recognition of individuals who’ve worked tirelessly to defend transparency, combat corruption and ensure accountabilities in their countries.
Written By: Paul Kilby, CFE
New mission, same focus: Interview with Preet Bharara, former U.S. attorney for the Southern District of New York
Preet Bharara speaks about lessons learned, the outlook for new insider trading rules under the Biden administration, the challenges of overseeing COVID-relief funds, the difficulties of investigating Ponzi schemes and much more.
Written By: Paul Kilby, CFE
Madoff's legacy: What have we learned from the debacle?
Bernie Madoff is gone, but the effects of his crimes live on. Fraud examiners endeavor to learn from all frauds, including the world’s largest-ever Ponzi scheme. What lessons have we learned? How has the regulatory environment improved? How have Madoff’s schemes affected the anti-fraud profession?
Written By: Dick Carozza, CFE
Fraudsters find novel ways to steal money and PII
Identity-theft fraudsters with no consciences use any opportunity to find new victims. Witness attempts to rip off vaccine hunters, caring grandparents and desperate job seekers.
Written By: Robert E. Holtfreter, Ph.D., CFE
What’s the admissibility of investigators’ covert recordings in Europe? Examining courts’ sticky legal and ethical issues
Sometimes fraud examiners need to record covert surveillance in their cases. But will their audio and video recordings be admissible in court? Here we examine a high-profile bribery case to test all the legal angles in deciding the usability of evidence in Europe and, by extension, the rest of the world.
Written By: Kieran Porter, CFE
Are well-known companies more prone to financial statement fraud?
It’s logical to think that companies on the verge of bankruptcy or suffering severe financial stress might be tempted to fudge their financial statements. Yet a recent university study says that large prestigious public firms are even more prone to cooking the books. We look at why this might be the case and the need to delve into the psychology of individual perpetrators.
Written By: Paul McCormack, CFE
Pet poodle comes to the rescue in German fraud case and more
Pet poodle comes to the rescue in German fraud case. Hospital employee accused of skipping work on full pay for 15 years. Fraudsters steal millions in Hong Kong’s biggest phone scam.
Written By: Paul Kilby, CFE
Game-changing digital background checks and asset searches
Fraud examiners understand the importance of knowing whom you’re doing business with. From compliance and due diligence to investigative asset tracing, solid background-checking skills are key tools for CFEs. But beyond traditional methods, new techniques are emerging to greatly enhance business transparency — and some may surprise you.
Written By: Vincent M. Walden, CFE, CPA
Running a marathon at a sprinter's pace
The U.S. Congress has approved a record $5 trillion in aid packages so far to help Americans survive the pandemic, opening up new territory for fraudsters to ply their trade. Fraud Magazine talks to two of the top professionals leading the government’s fight against fraud and finds out why CFEs are required more than ever.
Written By: Paul Kilby, CFE
Managing insider-fraud risks in a pandemic
Insider-fraud risks are on the rise as the economic and psychological fallout from the COVID-19 pandemic takes its toll on organizations and their employees. Understanding these risks and knowing how to manage them will be an important part of many CFEs’ jobs.
Written By: Rasha Kassem, Ph.D., CFE
Houston pharmacy owner arrested in $134 million Medicare fraud scheme and more
Written By: Emily Primeaux, CFE
Gifts of mentoring
Most of us know it’s more “blessed to give than receive,” but hectic work and family schedules (and pesky pandemic problems) can keep us from imparting our knowledge. But don’t let lofty assumptions of mentorship keep you from the joy of giving newish fraud examiners the career boosts they need. Here are practical ways to get started.
Written By: Colin May, CFE
Arpinder Singh, CFE
Arpinder Singh, CFE, got his start investigating fraud when he discovered the field of forensic accountancy just as India’s economy took off following sweeping reforms in the early 1990s. Forensics proved to be an excellent career choice as corporate India increasingly focused on governance issues, including fraud detection and prevention.
Written By: Paul Kilby, CFE
Is a U.K. version of SOX compliance on the horizon?
The U.S. Sarbanes-Oxley Act of 2002 mandated strict reforms to existing securities regulations and imposed tough new penalties on lawbreakers. The U.K. might soon adopt similar legislation, which could significantly change board responsibility for fraud risk management and increase demand for anti-fraud professionals.
Written By: Vincent M. Walden, CFE, CPA
CFEs can be medical practices' best friends
Most medical office practices trust their employees to handle daily financial matters. But what do they do when they catch long-term, trusted employees stealing? Here’s information you can use if you might be looking for medical-practice fraud detection and prevention business, and want to help doctors mitigate losses and claim restitution.
Written By: Belinda M. Kitos, CFE
EFIN tax scam, selecting reputable tax preparers, weather-related scams
Unusual circumstances open opportunities for fraudsters, and 2021 is no exception. Not only has an uptick in online tax filings during the pandemic spurred new ways to cheat Americans out of their refunds, but utility scams related to winter deep-freezes are on the rise. Here’s what you should do to protect yourself.
Written By: Robert E. Holtfreter, Ph.D., CFE
Caring for the CARES Act: What comes next?
SIGPR, the U.S. office mandated to audit and investigate fraud and abuse of the $2 trillion COVID-19 aid package known as the CARES Act, is now ready to take on the task at hand. It could be a busy few years ahead.
Written By: John E. Mulvaney, Jr., CFE, CPA
Record relief money and the fight against fraud
In some of the first COVID-19 articles Fraud Magazine published nearly a year ago, we warned how the pandemic was creating the perfect storm for fraudulent activity to thrive. Sadly, those predictions have proven true as record amounts of COVID-relief money flood the economy.
Written By: Bruce Dorris, J.D., CFE, CPA
The case of Little Bo Peep: The jailhouse employee
When employment circumstances change and pressures mount, criminals might disguise red flags of misbehavior. Because past actions can be a useful indicator of future behavior, background checks provide a snapshot of an applicant’s criminal, credit and employment history. Here we discuss the importance of background checks and how to properly vet your applicants.
Written By: Theresa Hicks, CFE
Ponzi schemes and the pandemic... a perfect storm?
If 2020 wasn’t bad enough, some experts believe the COVID-19 pandemic is creating the perfect conditions for an increase in Ponzi schemes. Here’s some advice on how best to deal with this type of fraud and why these schemes persist.
Written By: Jason Zirkle, CFE
Wasted opportunities: Find and investigate waste now
Investigators and auditors spend hours looking for fraud and abuse but often overlook the third bad boy: waste. Fraud is flashy, and abuse is sinister. But waste often gets a short shrift. These CFEs encourage us to look for waste so we can save our organizations millions during these lean times.
Written By: Brian Molloy, J.D., CFE, Temitope Eletu-Obido, CFE
Cobalt blues
The battery in your cellphone could be powered by cobalt derived from copper that exploited “artisanal miners” — often children — hand dug from open-pit mines in the Democratic Republic of Congo. But a new DRC government could crack down on the illegal awarding of mine licenses, permits and contracts. And blockchain could make supply chains more transparent.
Written By: Donn LeVie, Jr., CFE
Wirecard's house tumbles
Dan McCrum, an investigative reporter for the Financial Times, spent six years questioning the finances of Wirecard, Germany’s moneymaking payments processor. Fraudulent Wirecard would strike back against McCrum and his wife with smear campaigns, lawsuits and surveillance. German banks and regulators targeted him. But his efforts paid off. Read about his crazy, weird investigation.
Written By: Dick Carozza, CFE
Dichotomy of dishonesty
All of us want to look in the mirror and feel good about ourselves. But secretly we also want to benefit some from our dishonesty. Acclaimed behavioral economist Dan Ariely ponders this dichotomy every day. His research findings could help fraud examiners deter would-be fraudsters.
Written By: Dick Carozza, CFE
Deutsche Bank’s “referral fees,” China’s corruption death sentence and more
Deutsche Bank’s “referral fees,” China’s corruption death sentence and more
Written By: Emily Primeaux, CFE
Learning to speak the same fraud language
The FraudClassifier model, developed by a U.S. Federal Reserve-led industry work group, provides the payments industry with an intuitive classification approach to help fraud fighters get on the same page to understand the nature and magnitude of fraud.
Written By: Mike Timoney, CFE, Beth Reynolds
Exposing fraud at 'Germany's Enron'
Wirecard was once a fast-rising European fintech company that grew primarily through acquisitions. Now it’s dubbed the “Enron of Germany.”
Written By: Bruce Dorris, J.D., CFE, CPA
Fake calls from Amazon and Apple, vaccine scams, strengthening passwords
Amazon and Apple aren’t calling you to warn you of suspicious activity. And vaccine scammers are here. Plus don’t get lax in concocting new passwords.
Written By: Robert E. Holtfreter, Ph.D., CFE
ACFE News
New Board of Regents members, editor-in-chief, Paul Kilby and In Memoriam
Written By: ACFE Staff
Reimagining audit quality using Wirecard and PCAOB examples
The Wirecard case and recent PCAOB inspection reports on the top six audit firms highlight continued issues with audit quality and the independent auditor’s responsibility in uncovering material misstatements due to fraud. They also emphasize the need for the auditing profession to hasten improvements.
Written By: Chris Dogas, CFE, CPA
Global deforestation facilitated via fraud
Illegal logging companies in the Amazon regions, which are driving deforestation, are using multiple fraud schemes. They include fake or forged permits based on fraudulent information; corruption and collusion of and with officials who are supposed to enforce timber regulations; and front companies to avoid taxes.
Written By: Mason Wilder, CFE
Conduct data-driven investigations of suspicious employment claims during pandemic
Bad actors don’t let a good crisis go to waste. Shifting of governmental department of health mandates and the absence of systems to capture evidence of compliance have contributed to a perfect storm of fraudulent employment claims during the pandemic. But you can still find hard data to drive your investigations and defense strategies.
Written By: Vincent M. Walden, CFE, CPA
We’re remote, but we must connect
2020 is officially behind us, but its repercussions will live with us for a long time. Nothing prepared us — professionally or personally — for the pandemic. COVID-19 probably has permanently changed the ways we operate. But we’ve been resilient as we work through tremendous disruptions. We’re fighting the good fight to protect our organizations from fraud despite our limitations.
Written By: Bruce Dorris, J.D., CFE, CPA
Are data-sharing consortiums the future of anti-fraud?
More organizations are collaborating with data-sharing consortiums to safely exchange fraud risk profile information that could improve their internal prevention and detection activities. Here’s an interview with Matt Galvin, global VP of ethics and compliance at Anheuser-Busch (AB) InBev, who discusses how cross-company collaboration might affect the anti-fraud profession.
Written By: Vincent M. Walden, CFE, CPA
Cyberattacks in higher education at an epidemic level
Cybercriminals hit public institutions hard with ransomware in 2019 and 2020. Colleges and universities lost millions to fraudsters. These thieves endangered students’ records and stole PII, which they sold on the dark web. Administrators must train students, educators and staffs to avoid opening suspicious email attachments.
Written By: Cindy Greenman, Ph.D., CFE, Ross Johnston, Ph.D., CPA, Derrick Esplin, Ph.D., CPA
Alan E. Small, CFE
Alan Small, CFE, first became acquainted with fraud investigations in 1973 as a member of the Baltimore (Maryland) Police Department. His first assignment was with the criminal investigation division where he reviewed and followed the assignments of experienced detectives engaged in the investigation of high-profile cases, which included fraud.
Written By: Dick Carozza, CFE
2021 outlook for fighting fraud in Europe
The pandemic is leading to increased fraud and criminals’ evolving tactics. Fraud examiners are facing budgetary and logistical constraints, and operational limitations. Here’s how these conditions could affect European anti-fraud efforts this year.
Written By: Mason Wilder, CFE
Keys to the kingdom: Oilfield fraud
Jerry thought he had it made in the shade. As he began his company maintaining oil rigs and equipment, he'd found ways – the keys to the kingdom – to fraudulently bill his former employer as a contractor. He knew how to thoroughly exploit the system he'd helped devise. Learn lessons from this fictionalized version of an actual $2 million fraud case.
Written By: Rick Roybal, CFE
COVID-19 and utility bill scams
The pandemic is bad enough, but scammers are out there waiting to steal your money and identity via COVID-19 fraud. Here also is the newest utility bill scam.
Written By: Robert E. Holtfreter, Ph.D., CFE
Ponzi schemer flees on water scooter, shysters rent parking spots and more
Ponzi schemer flees on water scooter, shysters rent parking spots and more
Written By: Dick Carozza, CFE
5 most scandalous frauds of 2020
We were all glad to discard our 2020 calendars. Fraudsters took advantage of COVID-19 conditions, but not all of them needed an pandemic to pull off some big frauds. We've distilled a long list of cases to give you a few shockers.
Written By: Mason Wilder, CFE, Hallie Ayres
Time to shake things up
“Ikigai,” the Japanese notion of being truly fulfilled and how a person’s work relates to their purpose, spurred former paralegal Tracy Swaim to seek more. Conversations with a fraud investigator excited her about entering the field. She earned her CFE credential and now works in a job that checks all the boxes for her: mission, passion, vocation and profession.
Written By: Tracy G. Swaim, CFE
The case of the disappearing printer ink
Despite futurists’ predictions, we don’t live in a paperless business world. Printer ink and toner are still an expensive necessity. Fraudsters depend on ink costing organizations more than caviar. Here’s how to prevent this asset misappropriation and possibly save millions.
Written By: Michael Yamma, CFE, Brian Molloy, J.D., CFE
Remote but engaged
How do fraud examiners conduct fraud examinations when they often can’t meet their team members and subjects in person? These experts — during pandemic constraints — discuss their biggest investigation hurdles, maintaining professional skepticism, best practices, eDiscovery challenges, chain of custody, interviewing constraints and more.
Written By: Dick Carozza, CFE
Developing the entire fraud picture
CFEs should consider all aspects of a fraud case when calculating the impact of fraud. Here are three primary calculations when reporting the amount of fraud impact: Total exposure, fraud amount and known loss.
Written By: Alexis C. Bell, CFE
A pillar of anti-fraud education says farewell
From its early days as The White Paper to the 72-page bimonthly publication it is now, Fraud Magazine’s continued credibility and necessity to the anti-fraud profession is in part thanks to the leadership of its editor-in-chief, Dick Carozza. After 25 years at the helm, Carozza is stepping back and retiring. Here we take a look at the history of Fraud Magazine and the large role Carozza played in its success.
Written By: Emily Primeaux, CFE
Open public entities’ ledgers for transparency
Imagine if citizens, journalists, oversight agencies, and internal and external auditors were able to view all transactions of taxpayer and donors’ money online. The fraud prevention and deterrence possibilities are endless.
Written By: Ken Dieffenbach, CFE
Number-pattern tests, like Benford’s, are still valuable
From the President
Written By: Bruce Dorris, J.D., CFE, CPA
IRS telephone scams, remote-working risks and VPNs for tax pros
The IRS won’t call you or text you to threaten jail. And the pandemic has created security threats and opened new opportunities for cybercriminals. Plus, tax pros need VPNs.
Written By: Robert E. Holtfreter, Ph.D., CFE
Fraudulent T&E reports can indicate greater ethical lapses
Travel and entertainment spending is common in many industries, but it also opens the door for disgruntled or seedy employees to steal from organizational coffers. Falsified invoices, altered receipts and spending on personal luxuries can add up. Fraud examiners can use data analytics and tested fraud examination techniques to root out employees with nefarious intentions.
Written By: Matt Molchany, CFE
Prevent procurement ‘leakages’ and save precious working capital
Given the current economic climate and regulatory expectations, monitoring procurement spending for fraud, waste and abuse (aka “leakage”) is even more important. We can proactively monitor procurement data via big data analytics, which will reveal transactions that are fraudulent or diminish working capital.
Written By: Vincent M. Walden, CFE, CPA
COVID-19 ripoff, Wirecard fraud tentacles and more
Defense contractor allegedly rips off $12.8 million in COVID-19 relief aid; Singapore charges businessman for claiming he held $1 billion for Wirecard; Grand Prix CFO’s tax-defrauding racer stalls
Written By:
Doctoring the books
These case studies will help inoculate medical practices against fraud through sound ACFE principles — from financial oversight to segregation of duties.
Written By:
‘Moneyball’ leadership
Leadership is part art, part science and perhaps a bit of alchemy. Selecting individuals to lead companies has become more complex for boards of directors. CEOs must address the interests of all stakeholders — not just shareholders. Organizations should consider grooming honest and proven managers from within to help prevent and deter fraud.
Written By: Donn LeVie, Jr., CFE
Dusting your data for fraud's fingerprints: Six number patterns that fraudsters use
Fraudsters tend to steal in similar ways. Here are six number patterns you can search for and possibly find hidden fraud. Learn from the acclaimed authority on Benford’s Law on how numbers can become your best friends.
Written By: Mark J. Nigrini
Predication or not?
CFEs discuss how they know when they should devote resources to launch fraud examinations or at least preliminary investigations.
Written By: Dick Carozza, CFE
Best defense is a good offense
Use the new Anti-Fraud Playbook, produced by the ACFE and Grant Thornton, to operationalize leading guidance from the ACFE/COSO Fraud Risk Management Guide to help your organization move from theory to practice.
Written By: Sophia Carlton, CFE, James Ruotolo, CFE
Priti Amin, CFE
When Priti Amin, CFE, was young she knew she wanted to do something that helped others because honesty, trust and personal integrity were important to her. Those values compelled Amin in her journey to fight fraud. Within Vodafone Group, a global technology communications organization, Amin is the Vodafone Business fraud manager. She’s responsible for managing fraud risks for the entity, its products, services and customers.
Written By: Dick Carozza, CFE
Dealing with narcissistic interviewees
Interviewing narcissists during a fraud examination demand special skills. Here are some practical ways to interview those who have inflated self-perceptions and are missing solid self-esteem fundamentals.
Written By: Benjamin Schorn, CFE
Six candidates selected for ACFE Board of Regents’ ballot
Six candidates have been selected to compete for two positions on the 2021-2022 Board of Regents. The board sets standards to promote professionalism and to ensure the reputation of the CFE credential.
Written By: Dick Carozza, CFE
Keeping tax-supported officials around the globe accountable
National agencies are adopting income-asset disclosure management systems to help ensure transparency and accountability among high-level political and governmental officials.
Written By: Haluk Ferden Gursel
Set fire to your 'emotional intelligence'
You might be a brilliant fraud examiner, but if your “emotional intelligence” is stunted, you’ll be ineffective with those you work with and investigate. Here’s how to buck the stereotypes of your hard-wired personality, learn practical ways to change your management style and be more empathetic in your job and life.
Written By: Mandy Moody, CFE
Tasheika Hinson, CFE
When Tasheika Hinson, CFE, was 8 years old, she made a pact with her childhood friend that they’d grow up to become attorneys. Hinson would go on to become an assistant U.S. attorney at the Department of Justice and now is the head of investigations at The Vanguard Group Inc. where she leads internal investigations and partners with internal teams in its 19 offices around the world.
Written By: Emily Primeaux, CFE
DOJ asks, ‘Can you show your compliance and anti-fraud program actually works?’
The U.S. Department of Justice (DOJ) recently updated its “Evaluation of Corporate Compliance Programs,” the primary guidance for DOJ prosecutors when they assess penalties. These updates provide insights into the factors DOJ is likely to emphasize when it evaluates the effectiveness of your organization’s compliance program — should you come under scrutiny.
Written By: Vincent M. Walden, CFE, CPA
ACFE 31st Annual Fraud Conference Successful Virtual Turnaround
The ACFE had three months to plan a virtual 31st Annual ACFE Global Fraud Conference from scratch. The result is in the numbers and responses: 4,472 attended and 94 percent of the participants were satisfied. Lemonade never tasted so good.
Written By: Dick Carozza, CFE
Keeping ships afloat: Maritime fraud affects us all
On July 5, 2011, the tanker ship, Brillante Virtuoso, which was carrying 140,000 metric tons of fuel oil, was drifting within Yemeni waters. Later in the day, a small boat with seven armed men approached the vessel. The men, who claimed to be a “security team” to escort the tanker through the Gulf of Aden from the Arabian Sea, hijacked the ship and demanded that the vessel proceed to Somalia.
Written By: Anastasia Nazarova, CFE
Ritchie-Jennings Memorial Scholarship program accepting applications
Ritchie-Jennings Memorial Scholarship program accepting applications; ACFE Board of Regents expels two members
Written By:
Manhunters: How we took down Pablo Escobar
In this excerpt from “Manhunters: How We Took Down Pablo Escobar,” retired U.S. Drug Enforcement Administration agents Steve Murphy and Javier Peña each share harrowing encounters with possible Escobar henchmen during their time in Colombia investigating and hunting the notorious drug lord.
Written By: Steve Murphy, Javier Peña
Heed the call to educate the next generation
The recipient of the 2020 Educator of the Year Award, who owned a CPA firm for decades, had a lifelong desire to teach students forensic accounting and fraud examination at a university. In 2015, he got his chance. Now, he’s challenging ACFE members to do the same.
Written By: Lawrence J. Hoffman, CFE, CPA/CFF
Murder, money laundering and the demise of Pablo Escobar
Retired U.S. Drug Enforcement Administration agents Steve Murphy and Javier Peña — the inspirations behind the hit show “Narcos” on Netflix — tell the tale of their time in Colombia, investigating and capturing notorious narcoterrorist and Colombian drug lord, Pablo Escobar. Not everything you see on TV is true, but their story comes pretty close.
Written By: Emily Primeaux, CFE
Navigating a misshapen world
January of this year now seems like a quaint time. Since then, the world has stretched in bizarre ways, and it probably won’t ever resume its previous shape. The Board of Regents want to encourage you as your organizations need your anti-fraud skills more than ever.
Written By: Dick Carozza, CFE, Emily Primeaux, CFE
Unemployment benefits identity theft, contact-tracing scams and more
Fraudsters add to COVID-19 woes by ripping off unemployment benefits. And, of course, they’ve figured out how to profit from contact-tracing programs. Plus, employers must reduce risk of data loss and theft after layoffs and furloughs.
Written By: Robert E. Holtfreter, Ph.D., CFE
COVID-19 loan fraud, gaming the system and more
This Lambo loan is a no-no; 6 former NFL players allegedly try to game the system; Czech your investors before you give them cash
Written By: Emily Primeaux, CFE
Analyzing Wirecard case via temptation, opportunity, entitlement and boldness
Once a poster child for Germany’s fintech sector, Wirecard — along with its ambitious CEO — was exposed as a massive fraud that seduced investors. Learn how to analyze the case by emphasizing four attributes.
Written By: Steve Morang, Sanya Morang
Develop your crisis leadership skills to motivate others amid chaos
You can learn “charismatic/crisis-response” leadership characteristics to help your people continue their jobs without wavering. Crisis leadership requires intensely focused, committed actions to try to eliminate uncertainty, fear, panic and chaos.
Written By: Donn LeVie, Jr., CFE
Peña and Murphy challenge us to rise up in our battles
As I listened to the stories of former U.S. Drug Enforcement Administration agents, Javier Peña and Steve Murphy — the inspirations behind the Netflix series “Narcos” — I sensed their passion for catching Pablo Escobar and other drug traffickers. Despite enduring constant danger and peril, they seized the mission to disrupt the narcotics trade in Colombia.
Written By: Bruce Dorris, J.D., CFE, CPA
All that glitters
If resources are valuable, fraudsters will use them to commit crimes. And they love to misuse gold, diamonds and other glittery materials from the depths of the earth. Here’s how countries are battling the schemes and what it all means for fraud examiners.
Written By: Mason Wilder, CFE
Recovering illicit assets offshore might become a bit easier
The British Overseas Territories (such as The Cayman Islands) and the British Crown Dependencies traditionally have been jurisdictions fraudsters use to hide proceeds of crime. However, recent legislation on the Islands could make it easier to conduct investigations into fraud and white-collar crime.
Written By: Kenneth M. Krys, CFE, CA
Mass-screening interview pivotal in targeting gunnery sergeant
At a U.S. military base, 2,400 rounds of government ammunition were missing. This NCIS special agent suspected a Marine Corps gunnery sergeant, but he needed definite proof. The special agent used an unusual mass-screening interview to discover evidence that ultimately led to the gunnery sergeant’s conviction.
Written By: Daniel Wessel, CFE
2020 Report to the Nations: Organizations opting more for civil litigation, internal punishment
According to the ACFE’s 2020 Report to the Nations, organizations are favoring civil litigation and internal punishment over referring their fraud cases to law enforcement. Organizations opting for civil litigation increased to 28% in 2020 from the average of 23% for the past decade. Similarly, referrals to law enforcement have dropped from 69% in 2008 to 59% in 2020.
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Be alert for overpay wire-transfer scam and COVID-19 small-business loan frauds
Fraudsters, disguised as potential customers, are sending phishing emails to businesses to foist on them a con game. And scammers are claiming to be approved lenders under the U.S. SBA Paycheck Protection Program, which is part of the Coronavirus Aid, Relief, and Economic Security Act.
Written By: Robert E. Holtfreter, Ph.D., CFE
Supply-chain fraud is alive and escalating
The last time you probably thought about supply chains was during the early days of the COVID-19 crisis when the toilet-paper shelves were empty. But that TP had to wend its way through a complex journey from pulp mills to your home that involved many parties and chains of events. Disrupt just one step — say because of pandemic fears or fraud — and the chain breaks. Here’s how to help prevent supply chains from fraudulent acts and mitigate them when they do break.
Written By: Robert E. Holtfreter, Ph.D., CFE
Health care providers can protect PII by obeying EU's GDPR
Fraud examiners who work for health care providers should know the stipulations of the EU’s General Data Protection Regulation to protect patients from data breaches. The law also applies to U.S. organizations that provide care for EU citizens.
Written By: Robin Singh, CFE, LPEC, CFAP
Sudhir Gidwani, CFE
Sudhir Gidwani, CFE, says in 1984 he first found tremendous joy piecing together the jigsaw puzzle of unearthing fraud during his investigation of the collapse of a major local bank in Hong Kong. “As my experience in fraud and corruption investigations developed, I became more passionate about what I was doing,” he says.
Written By: Emily Primeaux, CFE
Better understanding fraudsters' justifications
One of the greatest challenges in our field is to think like the fraudsters we’re trying to stop. It’s not easy for CFEs to live inside crooks’ minds, but it’s important to put on those “glasses” and try to see our organizations from the fraudster’s mindset.
Written By: Bruce Dorris, J.D., CFE, CPA
Unemployment fraud, another COVID-19 scam out of California and more
Thousands falsely charged with unemployment fraud; another COVID-19 scam out of California; Fraud in the Wake of COVID-19: ACFE Benchmarking Report
Written By: Emily Primeaux, CFE
Flying the company jet too close to the sun
Residents of C-suites and boardrooms who exhibit the “Icarus complex” often initially soar but ultimately plummet from lofty heights and take their companies with them. Here’s how organizations can identify them in the hiring process and prevent disaster.
Written By: Donn LeVie, Jr., CFE
Anti-fraud pros are best-suited to assess organizational cultures
Anti-fraud professionals are uniquely positioned to diagnose sick occupational cultures. Here are answers about workplace cultures that can help head off fraud before it occurs.
Written By: Peter Hughes, Ph.D., CFE, CPA
Fraud schemes and investigations amid the COVID-19 pandemic
The COVID-19 crisis is forcing companies to tackle significant operational, financial and strategic challenges. And some employees might be tempted to engage in embezzlement schemes or even manipulate financial statements, among other improper acts, to address their immediate financial needs.
Written By: Anthony Campanelli, Kevin Corbett, Christopher Georgiou
Forensically preserving electronic evidence during a lockdown
During the COVID-19 lockdowns, how did fraud examiners manage evidence collection? Learn from forensic technology industry experts about collecting custodian information and remote data preservation.
Written By: Vincent M. Walden, CFE, CPA
Twisted rationalization
Fraud examiners tend to de-emphasize the rationalization factor — to the detriment of prevention efforts. Here’s some of the science behind would-be fraudsters’ justifications and how we can use it practically to deter their crimes.
Written By: Bret Hood, CFE
Ignore waving red flags? Pay the cost
Organizations can’t afford to be oblivious. Anti-fraud professionals are trained to be skeptical. They should teach their “trust but verify” skills to all in their spheres. Here are some cases in which the players didn’t see (or refused to acknowledge) flaming-red flying flags and paid the cost in loss of cash and reputations.
Written By: Jeff G. Matthews, CFE, CPA
Daphne's message lives on
For years, journalist Daphne Caruana Galizia probed the activities of Malta’s ruling elite. She shared her findings — drug smuggling, money laundering, government corruption — on her blog, “Running Commentary,” and was regularly intimidated for her work. In 2017, she was murdered in a car bombing in Malta. Thousands have mourned her and demanded justice. Her son, Matthew Caruana Galizia, shares his mother’s story and how he and other investigative journalists worldwide are honoring her legacy.
Written By: Emily Primeaux, CFE
Coronavirus stimulus check scams, infamous hacker charged and more
Coronavirus stimulus check scam, infamous Russian hacker charged and Georgia man attempts to fraudulently capitalize on pandemic.
Written By: Emily Primeaux, CFE
Insights without exposure
How should fraud examiners and legal professionals meet compliance standards but also keep individuals’ and organizations’ data private? “Differential privacy” is a system of cybersecurity that proponents claim can protect data far better than traditional sanitizing or anonymizing methods.
Written By: Vincent M. Walden, CFE, CPA
Severe water issues in Australia worsened by fraud
Traditional corruption frauds — bribery, kickbacks and conflicts of interest — are affecting water management and availability in Australia. Droughts, fires, and floods are raising the stakes.
Written By: Mason Wilder, CFE
The overlooked factor
A business can legitimately sell its outstanding invoices for a percentage of their face value to receive money quickly to expedite cash flow. The process allows nearly $3 trillion in transactions per year worldwide. However, invoice factoring is vulnerable to fraudsters. This case shows red flags and susceptibilities.
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Scammers using FedEx and COVID-19 ruses to collect PII
In separate scams, fraudsters target would-be victims who are worried about packages they might never receive plus COVID-19 threats. The criminals play on fears to harvest personally identifiable information.
Written By: Robert E. Holtfreter, Ph.D., CFE
Mark Lee Greenblatt, CFE
Mark Lee Greenblatt, CFE, says he’s learned the importance of being fair, independent and objective — as an individual and as a leader within his organization. “In the inspector general community, we have a special responsibility as the independent oversight mechanism within our departments, and I’ve learned that we can be effective only if we operate with integrity,” says Greenblatt, inspector general at the U.S. Department of Interior.
Written By: Emily Primeaux, CFE
Telemedicine fraud ripe during COVID-19 pandemic
Telemedicine isn’t a new concept. It’s become an integral element of health care delivery. However, it’s prone to fraud opportunities because of the absence of direct patient contact. U.S. federal loosening of regulations during the pandemic has opened the door for more telemedicine visits and potential for fraud.
Written By: Robert A. Richman, CFE
New Regents join board during its semi-annual meeting and Board of Regents expels member
Lyn Cameron, CFE; Kenneth R. Dieffenbach, CFE; and Victoria Meyer, CFE, took their oaths of office as newly elected members of the Board of Regents during the board’s semi-annual meeting on Feb. 6 at ACFE Global Headquarters in Austin, Texas.
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Win, win, win in fraud-case competition
Drexel University’s Fraud and Internal Control Case Competition (FIC3) lifts anti-fraud concepts off textbook pages and ingrains them into students’ lives. Learn how to help higher-ed institutions develop similar competitions.
Written By: Barbara Murray Grein, Ph.D., CPA, Frank Pina, CFE, CPA, CFF
Benford's Law still works
Can Benford’s Law practically identify fraud? It’s one of many tests you can use to discover fictitious numbers in supposedly random datasets, such as monetary amounts of purchase transactions. In this case, a comptroller successfully uses Benford’s Law to search for anomalies in warranty claims.
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The power of one
Daphne Caruana Galizia had the same dogged pursuit of fraudsters and the desire to bring them to justice that you do. She was an investigative journalist in Malta who was unwavering in her pursuit of allegations of corruption by government officials and businesspeople in her country. Tragically, she lost her life because of that pursuit.
Written By: Bruce Dorris, J.D., CFE, CPA
‘A wink and a nod’ can’t rename high-tech government bribes
Raushi Conrad was a longtime, well-liked U.S. federal government high-tech specialist. He bucked the stereotype of the aloof, arrogant IT worker. But an anonymous email led to an investigation that showed he’d committed a one-man $1 million internal fraud scheme that involved chicken restaurants, computer viruses and “wink-and-a-nod” briberies. Here’s how to fend off similar high-tech crimes.
Written By: Colin May, CFE
Fraudsters are exploiting blockchains and digital currencies
Fraudsters are beginning to find the cracks in the armor of blockchains and cryptocurrencies. Initial coin offerings, Simple Agreements for Future Tokens and fake currencies are vulnerable areas. Here’s practical information for warning your organizations and clients.
Written By: Sri Ramamoorti, Ph.D., CFE, CPA, CIA, Sarah J. Webber, J.D., CPA, Mira Khalil
Fraudsters don’t stand a chance against Superman
Incidences of fraud and counterfeiting are escalating in most high-stakes collectibles markets — take art fraud, coin fraud and wine fraud, for example. But the vintage comic-book industry stands impervious even as comic book values soar.
Written By: Stephen Fishler
Coronavirus fraudsters add to the anxiety and misery
The growing pandemic of coronavirus disease 2019 (COVID-19) is a global concern. It threatens to disrupt everything from international travel and supply chains to health care operations and the global economy. Like other natural disasters, the outbreak has also become an opportunity for fraudsters to cash in on public fears.
Written By: Jason Zirkle, CFE
Meet Taz Kalolwala, CFE
Taz Kalolwala has worked her way up the corporate ladder during the course of her career, but it’s her people skills and team-nurturing abilities that sets her apart. She advises fellow CFEs to remain humble and continuously seek help from other anti-fraud professionals.
Written By: Emily Primeaux, CFE
Group dynamics can breed reluctant fraudsters
Once fraud becomes part of an organization’s culture, it can spread and affect employees like a virus. But why would persons with apparently high ethical standards transform into fraudsters? And how can we counteract these fraud viruses?
Written By: Benjamin Schorn, CFE
Compliance issues?
Employees in the trenches are tired of management talking to them like non-compliant kids. Instead, ask them to think with the curiosity, courage and clarity of kids. Here are ways to elicit anti-fraud compliance by understanding operating environments, clearly stating instructions, avoiding proscriptive rules and more.
Written By: Rupert Evill, CFE
Study illicit ‘exfiltration’ and cryptocurrency to prevent fraud
Cryptocurrencies and cybercriminals aren’t going anywhere. Here’s how some fraud examiners discovered systematic patterns of attacker activity at a bank and instituted controls that protected the institution and helped a cryptocurrency exchange prevent future attacks.
Written By: Patrick A. Westerhaus, CFE, CPA
Avoiding the DOJ's red flags of collusion
The U.S. Department of Justice appears to have collusion in its crosshairs with its formation of a procurement and collusion strike force. Here are typical schemes and red flags in the context of new DOJ guidance.
Written By: Vincent M. Walden, CFE, CPA
New phishing scams, fake FTC letters and more
Nothing’s sacred. Cybercriminals are now faking those “https” secure websites. Don’t fall for them plus assorted new phishing scams and fraudulent Federal Trade Commission letters.
Written By: Robert E. Holtfreter, Ph.D., CFE
Siddharth Kher, CFE
Siddharth Kher, CFE, first learned about the anti-fraud profession when he was working at Amazon. His curiosity piqued when he searched the internet for anti-fraud specialization courses and discovered the ACFE.
Written By: Emily Primeaux, CFE
The smoke detector
Howard Wilkinson smelled smoke when he was a trader for the Estonian branch of Danske Bank. The fire he discovered is a $230 billion debacle — possibly the largest-ever money-laundering scheme. Wilkinson’s investigative skills could help accelerate European reforms.
Written By: Dick Carozza, CFE
Archeological frauds threaten Peruvian cultural heritage
Peruvian fraudsters take advantage of victims’ gullibility and interest in pre-Columbian Andean history plus the vulnerability of powerless indigenous peoples and rampant corruption to commit archeological frauds that exploit and denigrate cultures.
Written By: Mason Wilder, CFE
‘Massive’ Ponzi scheme, Jordan Belfort sues and bettor makes bad gamble
‘Massive’ Ponzi scheme, Jordan Belfort sues and bettor makes bad gamble
Written By: Emily Primeaux, CFE
Walking through the side door
A euphemism is an almost automatic and alternative method we use to phrase possibly negative things in a less harmful fashion. Fraudsters use euphemisms to rationalize their crimes. Fraud examiners can use them to elicit confessions or detect fraud in an organization. Here’s what you need to know to spot euphemisms and when fraudsters are using them to mask nefarious deeds.
Written By: Bret Hood, CFE
CFEs elect three members to 2020-2021 Board of Regents
Fellow Certified Fraud Examiners elected Lyn Cameron, Kenneth R. Dieffenbach and Victoria Meyer to the 2020-2021 ACFE Board of Regents from candidates selected by the Board’s nomination committee. The three new regents took office at the Board’s meeting in February at ACFE headquarters in Austin, Texas. They replaced Ryan C. Hubbs, Tony Prior and Elizabeth Simon who’ve served their terms.
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One step forward, two steps back
Fraud examiners are always working to persuade management to search for internal fraud and adopt wise prevention controls. However, anti-fraud professionals can only give their best counsel and then work hard for a good outcome. Here are a fraud examiner’s early successes in a case and later frustrating management decisions. Regardless, he’s not daunted.
Written By: Jason Shepard, CFE, ARM
Why audits fail
A bond of trust joins auditors with all who depend on the accuracy and completeness of their findings. But venal executives, captured regulators and compromised auditors can subvert that bond, betray confidence and dissipate capital. This article offers key insights and best practices to help CFEs — including those who are auditors — expose and mitigate threats to audit reliability.
Written By: Robert Tie, CFE
5 most scandalous fraud cases of 2019
The ACFE believes that large, noteworthy fraud cases like Enron or Bernie Madoff will live on in infamy and provide valuable lessons for fraud fighters and the general public. That is why we, along with input from our members, have selected the following five stories as the most noteworthy frauds of 2019. The stories were chosen based on the amount of money lost, the number of lives impacted and/or the relevance to the anti-fraud profession.
Written By: Emily Primeaux, CFE
Fooling the senses for profit
Deepfakes are no longer just amusing YouTube videos. Fraudsters are beginning to use them for business email compromises. Cyber experts say phone scams, sham celebrity endorsements, biometric fakes and bogus evidence could quickly follow. Now’s the time to advise your organizations.
Written By: Mason Wilder, CFE
Fraud could jeopardize U.S. DOD’s use of ‘OTA’
The U.S. Department of Defense (DOD) is trying to ameliorate its deteriorating global advantage by using its Congress-granted “Other Transaction Authority” when working with vendors. But OTAs might allow fraud, waste and abuse to creep in. Here’s how the DOD can improve.
Written By: Stephen M. Speciale, CFE
Demystifying AI in anti-fraud and compliance efforts
Artificial intelligence and machine learning seem to be included in most technology discussions. But what do these potential technologies really mean for fraud examiners and compliance professionals?
Written By: Vincent M. Walden, CFE, CPA
Attack of DoS/DDoS
Fraudsters are doing more than shutting down sites by flooding them with millions of automated inquiries. They’re infecting websites with malware that unsuspecting users are downloading on their devices. Here’s how to advise your organizations and clients to protect domain name servers that will prevent loss of revenue, productivity and reputation.
Written By: Robert E. Holtfreter, Ph.D., CFE
Influencer bootcamp
Most people don’t like being stuck in obscurity in their profession. They want recognition and compensation for their value. Here’s how to build a reputation or professional brand as an influencer in your anti-fraud field.
Written By: Donn LeVie, Jr., CFE
Jules Kroll hired staffers with diverse skills to prevent and fight fraud
Jules Kroll didn’t start out to create one of the largest investigative firms in the world. However, he did recognize the need for such a service for corporations and governments after he battled corruption against his father’s printing business.
Written By: Bruce Dorris, J.D., CFE, CPA
Always on duty
An anonymous whistleblower hotline should be a critical weapon of any organization’s anti-fraud arsenal. Fraud examiners should understand some of the key success factors that make hotlines good tools in fighting fraud.
Written By: Kevin M. Alvero, CFE
ACFE benchmarking report: 58% cite inadequate anti-fraud staffing and resources
In a new ACFE research study, In-House Fraud Investigation Teams Benchmarking Report, 58% of anti-fraud professionals say their organizations have inadequate levels of anti-fraud staffing and resources.
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Fraud in the News
$50 million by age 50 could get lawyer 50 years; he’s just not that into you; not the outcome these execs were hoping for
Written By: Emily Primeaux, CFE
Rachel Jolicoeur, CFE
Trust your instincts, keep digging, look for patterns and know how to navigate technology to find anomalies. These are the skills Rachel Jolicoeur, CFE, has learned over the course of her career.
Written By: Emily Primeaux, CFE
Indefatigable investigator
Jules Kroll assembles diverse professionals — fraud examiners, forensic accountants, academics, investigative journalists, former prosecutors and attorneys — to fight fraud. That’s been his modus oprandi since 1972. As chairman and cofounder of K2 Intelligence, he continues that course.
Written By: Dick Carozza, CFE
Beware of ‘boss gift card,’ Medicare equipment scams
Fraudsters always find new ways to rip off consumers. They’re stealing money via gift cards, back- and knee-brace schemes and your American Express credit card.
Written By: Robert E. Holtfreter, Ph.D., CFE
Happy 80th birthday to the term ‘white-collar crime’
You might not know it, but today is an important day for you. On Dec. 27, 1939 — 80 years ago — criminologist Dr. Edwin Sutherland, while speaking to the American Sociological Society, coined “white-collar crime” and placed the cornerstone in the foundation for the fraud examination profession.
Written By: Dick Carozza, CFE
Fraud Week spurs anti-fraud training and support across the globe
Anti-fraud professionals know that while it’s best to catch fraud as soon as possible, it’s even better to stop fraud before it happens — which is why active fraud prevention is a critical part of anti-fraud strategies for organizations of any size. The ACFE established International Fraud Awareness Week (Fraud Week) to give organizations a dedicated time to spread anti-fraud education with employees and within their communities.
Written By: Sarah Hofmann, CFE
Demystifying networking
Like it or not, networking is key to professional success. Unfortunately, keeping our heads down and doing great work just isn’t enough to further our careers. Here are tips from a wise introvert on how to build your network.
Written By: Bethmara Kessler, CFE
Learning the art of fraud examination
CFEs love fraud examinations that move in a linear fashion — from the general to the specific, gradually focusing on the perpetrator through evidence analysis. But life, of course, seldom moves in a straight line.
Written By: Dick Carozza, CFE
Playing dodgeball with yet more scams
Think you’re completing your tax return? Think again. That frightening call from the Social Security Administration? Not who you think it is. And believe you’re getting the protection and settlement from the Equifax breach? Buyer, beware.
Written By: Robert E. Holtfreter, Ph.D., CFE
Dive into the dark web to protect your organizations and clients
As Emily Wilson, CFE, points out in her cover article, content on the dark web is designed to be hidden from search engines and from casual users. We can’t simply stumble across dark web sites by accident, Wilson writes. However, we might be surprised to learn that the dark web, which conjures images of abhorrent crimes, also stores legitimate common data and allows legal transactions.
Written By: Bruce Dorris, J.D., CFE, CPA
Fraud in the News
Dating app maker sued for fraud, three parents sentenced in college admissions scandal and drugmaker targets dementia patients.
Written By: Emily Primeaux, CFE
The truth about the dark web fraud trade
The dark web is often seen as a mysterious and malevolent creature — built out of the myths and legends created by popular media and clickbait headlines. In reality, the dark web is home to a vibrant and thriving criminal ecosystem with a resilient fraud trade at the center of the action. Here’s what fraud examiners should know when they enter the underbelly of the internet.
Written By: Emily Wilson, CFE
Con artists hack your brain ... with your permission
When we have fewer emotional challenges, preoccupations and mental clutter we’re more actively aware of our surroundings. Our sharpened minds will be attuned to sights, sounds and other sensory input that can alert us to con artists’ attempts to hijack our emotions, our valuables and our dreams. Here’s practical information that you can give to your management, colleagues, families and friends.
Written By: Donn LeVie, Jr., CFE
Bernardin Assiene, CFE
Bernardin Assiene, CFE, found his passion for fighting fraud when he was tasked to investigate a financial fraud in the fuel distribution network at a major multinational American oil company in 1998. “The experience I gained and the lessons I learned shaped the rest of my career,” he says.
Written By: Emily Primeaux, CFE
Global review and update
Fraud moves like waves globally — disrespecting borders and nationalities. However, regions often have common crimes and recurring problems. Here’s a review of some of what we’ve covered since the column’s inception in 2018 plus recent developments.
Written By: Mason Wilder, CFE
Character traits of the effective fraud examiner
Fraud examination is often challenging work, which involves various investigative skills. Be more successful in your engagements by focusing on these four traits that are shared by effective fraud examiners.
Written By: Joshua Wiesenfeld, CFE
Medical businesses' unique conditions double the vulnerability
A typical medical practice operates with controlled chaos, generous trust of staff and two separate financial accounting software programs — all breeding circumstances for fraud. Here’s how to identify internal fraudsters’ schemes and apply remedies (even if you don’t work at a medical practice).
Written By: Belinda M. Kitos, CFE
Igniting anti-fraud research via ACFE Foundation
On March 14, the Institute of Fraud Prevention (IFP) merged with the ACFE Foundation, which expanded the Foundation’s mission beyond college scholarships to cutting-edge, anti-fraud research that’s accessible to all CFEs. The IFP will now be known as the ACFE Research Institute. ACFE members and other anti-fraud professionals are the beneficiaries.
Written By: John Warren, J.D., CFE, Vincent M. Walden, CFE, CPA
Nine candidates selected for ACFE Board of Regents' ballot
Nine candidates have been selected to compete for three positions on the 2020-2021 Board of Regents. The board sets standards to promote professionalism and to ensure the reputation of the CFE credential.
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Using future anti-fraud tech tools wisely
Fraudsters wield technology like weapons to commit their crimes. Fraud examiners must match and supersede their foes with advanced high-tech tools. Here are the results of a recent ACFE survey that show how anti-fraud professionals are using technology and their plans for the future.
Written By: Andi McNeal, CFE, CPA
Seniors, scams and identity theft
It started with a phone call on Dec. 21, 2018. An 84-year-old Florida woman (we’ll call her June) received a call from a man who said he was attorney Thomas Wilson. He informed June that her grandson had caused an automobile accident, and the driver of the other car apparently was a pregnant woman who miscarried as a result of the accident. He said she was suing June’s grandson.
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Soft fraud's hard-dollar impact in workers' compensation
On Feb. 10, 2015, Nova Healthcare Management pleaded guilty to felonious workers’ compensation fraud and agreed to repay Texas Mutual Insurance Company more than $6 million. The investigation revealed that Nova Healthcare Management (also known as Nova Medical Centers or Nova) overbilled Texas Mutual for physical therapy by billing services as more expensive one-on-one therapy when it actually provided group therapy.
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Illegal wildlife trade in southern Africa facilitated via fraud
Poachers and hunters are committing fraud to enable slaughter of big game in southern Africa and shipping their trophies — or horns and tusks — over borders. One CFE is valiantly working to reverse the accelerating carnage and corruption.
Written By: Mason Wilder, CFE
Tax season has ended but scams haven't
Fraudsters have invented new themes on old schemes. They threaten to suspend Social Security numbers or tell victims they owe money to fake government organizations.
Written By: Robert E. Holtfreter, Ph.D., CFE
Municipalities become new focus of ransomware attacks
In August, the FBI began investigating a ransomware attack that struck 23 small local governments in Texas. Within these mostly rural municipalities, inhabitants have been unable to access birth and death certificates online, pay utility bills or engage in any city business or financial operations.
Written By: Hallie Ayres
Don't depend on a handshake
Once someone is entrusted in a fiduciary relationship, an opportunity is created for that person to become less trustworthy, or worse, a thief. Whether structuring a new fiduciary role to prevent fraud or investigating fraud after it has occurred, breaches of fiduciary duty are great sources of work for fraud examiners.
Written By: Stephen Pedneault, CFE, CPA/CFF
Let's provide anti-fraud training to possible sentinels
Tyler Shultz, our 2019 Sentinel Award winner, wasn’t a CFE. He was a young, idealistic, budding scientist who helped unravel one of the most prolific frauds in years. His intuition led him to start questioning what was going on at Theranos, a blood-testing company founded in Silicon Valley.
Written By: Bruce Dorris, J.D., CFE, CPA
Stepping up and standing out
When ACFE Founder and Chairman Dr. Joseph T. Wells, CFE, CPA, stepped up to the podium at the 30th Annual ACFE Global Fraud Conference in Austin in June, the ACFE’s accumulated history accompanied him. As he accepted his induction into the ACFE Hall of Fame, he received it as a representative of the thousands who, but for his foresight, probably never would’ve received fraud examination education and skills.
Written By: Dick Carozza, CFE
Voting for new Board of Regents begins November, Ritchie-Jennings Memorial Scholarship Program accepting applications, In Memoriam and Board of Regents expels two members
In this ACFE News article, Fraud Magazine discusses how voting for the new Board of Regents begins in November, the Ritchie-Jennings Memorial Scholarship Program is accepting applications, Mary Sue Smith, a member of the ACFE since 2004, died June 13, and the Board of Regents expelled two members.
Written By: ACFE Staff
Transforming corporate cultures by placing CFEs in top echelons
During an interview at the 30th Annual ACFE Global Fraud Conference, the Board of Regents opined on how to change corporate cultures, new corporate compliance guidance, ethics vs. profits and more.
Written By: Dick Carozza, CFE
Don't miss opportunities to help organizations during fraud aftershocks
An organization discovers devastating, costly fraudulent activity. It’s now waffling on spending money on a proactive fraud prevention plan. But while the fraud still stings, now’s the time for a consulting CFE — internal or external — to pitch substantive anti-fraud measures that could save the organization.
Written By: Paul McCormack, CFE
It's not just VCRs they're after anymore
Fraud examiners and auditors at most organizations are cognizant of the risks of tangible assets mysteriously vaporizing. But it’s so much more difficult to keep track of proprietary digital information such as trade secrets, customer lists, product details, marketing strategies and PII.
Written By: Sean Mcgrath, CFE, CPA
Fraud in the News
Influencer marketing fraud, tax-credit fraud and restaurateur defrauds.
Written By: Emily Primeaux, CFE
Norman DeBoer, CFE
The ACFE presented Norman DeBoer, CFE, the Certified Fraud Examiner of the Year award at the 30th Annual ACFE Global Fraud Conference in June. DeBoer, a detective with the Waterloo (Ontario, Canada) Regional Police Service for 29 years, completed in 2018 the precedent-setting $12 million financial advisor fraud case of Daniel P. Reeve, who received a 14-year prison sentence.
Written By: Dick Carozza, CFE
Avoiding bias in your fraud risk management program
Complex business environments require fraud examiners to have diverse skills and holistic points of view to properly address the plethora of business risks. Escape your biases. Consider multiple sets of guidance to stay apprised to increase business transparency and dismantle silos of information.
Written By: Vincent M. Walden, CFE, CPA
Teaming with anti-fraud pros of many stripes
Opportunistic fraudsters often have an advantage over CFEs: They can freely and spontaneously select co-conspirators by skill, position and corruptibility. To level the playing field, CFEs can work more closely with other types of anti-corruption practitioners. Their experience and techniques, when combined with ours, frequently produce extraordinary synergies that outfox versatile criminals.
Written By: Robert Tie, CFE
Whistleblower helped dismantle biotech juggernaut Theranos in his 'zero-strategy' defense
Tyler Shultz, Theranos whistleblower and ACFE Sentinel Award Winner, explains where things went wrong at the infamous blood-testing company and why he couldn’t sit back silently — even at the potential expense of his relationship with his grandfather, George Shultz, and facing the prospect of likely litigation.
Written By: Emily Primeaux, CFE
Anti-money laundering for registered broker-dealers
The fact that the SEC continues to pursue AML violations, and in one instance sought a $23 million penalty, emphasizes that broker-dealers have a continuing incentive to comply with AML obligations.
Written By: Charles Riely, Jing Xun Quek
Three ‘gotcha’ job interview questions
We’ve all dreaded answering unanticipated job interview questions. When you’re caught off guard or just aren’t prepared, the tendency is to go with the first answer that pops into your head. Your response usually does little to improve your chances of continuing in the hiring process.
Written By: Donn LeVie, Jr., CFE
Medical identity theft growing exponentially
Medical identity theft is the fastest-growing form of identity fraud. Crooks use a myriad of ways to defraud federal governments and vulnerable patients. Here are the schemes and ways to avoid becoming a victim.
Written By: David A. Picard, CFE
Deshietha Partee-Grier, CFE
Deshietha Partee-Grier, CFE, says she lives by an Eleanor Roosevelt quote: “Great minds discuss ideas. Average minds discuss events. Small minds discuss people.” Deshietha loves discussing ideas and the interplay among her colleagues as they fight money laundering and other types of financial crime. But work isn’t sufficient for her. She mentors high school girls when she’s not nurturing her five children with her husband and working on an MBA.
Written By: Emily Primeaux, CFE
Smarter tech necessitates smarter fraud examiners
Modern technology advances quickly. What’s innovative and fresh one day can be quickly outdated and short-lived in just a few months. As smart devices get smarter, business and industry depend more heavily on them and the data they store, which makes fraud examinations more challenging and complex.
Written By: Bruce Dorris, J.D., CFE, CPA
Keep ahead of fluid global anti-fraud regulations
The compliance landscape forever shifted after the Enron and WorldCom debacles, among others. Don’t let accelerating corporate governance changes leave your organization and clients unprotected. Here’s how anti-fraud regulations evolve in phases around the globe, a review of compliance history plus practical action plans.
Written By: Mani Padmanabhan, CFE
Fear not the breach!
Cybersecurity expert Theresa Payton says don’t wait until you’re in the middle of a breach to formulate plans. Practice digital disasters. Develop a playbook so everybody knows their roles. Line up your external helpers. Devise your communication strategy. Then, if you’re breached, cooler heads will prevail.
Written By: Dick Carozza, CFE
ACFE associate general counsel's motto for traveling light also applies to life
The ACFE, with members around the globe, has contracts, compliance requirements, intellectual property issues and other matters that ACFE Associate General Counsel Jacob Parks, J.D., CFE, happily handles. “Fraud and corruption are the nemeses of a fair society, which was especially clear after the financial crisis of the late 2000s,” he says. “The ACFE’s mission of fighting fraud worldwide was appealing to me after I saw how much harm was due in large part to deceptive practices on a wide scale.”
Written By: Emily Primeaux, CFE
Dark world of oil theft and fraud
Oil theft and fraud affects everybody — not just those in far-away nations — because it enables everything from terrorist attacks to human trafficking. The author outlines thieves’ techniques and what countries are doing to battle this multibillion-dollar scourge.
Written By: Anastasia Nazarova, CFE
Fraud in the news
According to the May 15 ABC News article by Julia Jacobo, “96 people charged in Texas marriage fraud scheme to get Green Cards,” Houston fraudsters are responsible for granting citizenship to Vietnamese nationals who paid hefty fees. Police say ringleader Ashley Yen Nguyen operated a well-organized marriage scam — charging between $50,000 to $70,000 for a marriage license. As a result, nearly 150 people fraudulently obtained green cards to become permanent U.S. residents.
Written By: Randi Zimmer, CFE
Practice makes imperfect
Everybody loved Dr. Brian. He appeared to be the perfect professional, spouse, parent and friend. But he fooled everybody. At least for a while. Here’s how he, as the lead administrative physician of a once-thriving practice, skimmed and embezzled more than $25 million in 20 years.
Written By: Judy D. Wright, Ph.D., CFE, Jack L. Oliver, CFE, CPA
Drafting ISO 37002 — new global standard on whistleblowing management systems
The International Organization for Standardization (ISO) is developing new guidelines for whistleblowing management systems — ISO 37002. These international standards are scheduled for completion by the end of 2021. This article describes the background of ISO 37002, its scope and its added value for organizations around the globe.
Written By: Jan Tadeusz Stappers, LL.M.
ACFE Foundation awards scholarships in 25th year of Ritchie-Jennings Memorial Scholarship Program
The ACFE Foundation has awarded $55,000 to college and university students through the Ritchie-Jennings Memorial Scholarship Program for the 2019-2020 school year. Each recipient also will receive a one-year ACFE student membership.
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2018 FTC numbers paint worsening fraud picture
Three million fraud complaints in 2018. That’s what the Federal Trade Commission received — many of them for identity theft. When we look at the stats since 2001, we see the fraud problem is worsening.
Written By: Robert E. Holtfreter, Ph.D., CFE
Romance fraud, cryptocurrency risks and money laundering in Asia Pacific
The Asia Pacific region has become a hotbed for cyber romance scams. Hong Kong cybercrime alone has risen 565% since 2012. The region’s global financial centers also face increasing concerns about cryptocurrency and blockchain money laundering fueled by North Korean cybercrime.
Written By: Mason Wilder, CFE
An intern's front-row seat to fraud
This former intern learned firsthand about fraud when her boss and mentor, the senior accountant, was arrested for embezzlement and credit card fraud. The author helped discover the crimes at the nonprofit business.
Written By: Bethany Faford
Global fraud is the same — legal systems aren't
Fraud examiners are increasingly tackling complicated cases that simultaneously involve several nations. We must look for legal guidance for our organizations’ cross-border operations. Here’s a start.
Written By: Dr. Joseph T. Wells, CFE, CPA
Shutting the lid on beverage container deposit fraud
Container deposit fraud is more than just buddies transporting some empty soda bottles across state lines. We’re talking about multimillion-dollar tax fraud schemes. Here’s how to prevent them.
Written By: L. Christopher Knight, CFE, CPA
Bad leaders? Increased fraud
Do you want to make sure you have more fraud in your organization? Then hire bad leaders and poorly train them with outdated methods. Here’s how to avoid employee disengagement by changing attitudes and behaviors.
Written By: Donn LeVie, Jr., CFE
New Regents join board during its semi-annual meeting
Eric R. Feldman, CFE, and Bethmara Kessler, CFE, took their oaths of office as newly elected members of the Board of Regents during the board’s semi-annual meeting on Feb. 7 at ACFE Global Headquarters in Austin, Texas.
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Justice at all costs
Bill Browder assumes the mantle of his fallen friend, Sergei Magnitsky, as he ferrets out fraud and corruption around the world and searches for $230 million in allegedly stolen laundered Russian funds. Despite the risks, this human-rights activist says he can’t look the other way.
Written By: Mandy Moody, CFE
Create your luck to fight fraud
Fraud examiners often stumble upon unsought information. Here’s how to train yourself to find that info so you can detect other potential frauds, obtain evidence, recover fraud-related losses, identify and correct deficiencies, and more.
Written By: Richard G. Brody, Ph.D., CFE, Elena Klevsky, Ph.D., CPA, Ryan Knight
Can economic sanctions lead to fraud?
Countries routinely use sanctions on nations to deter and penalize bad behavior. But what if economic restrictions cause criminals to seek the anonymity of alternative currencies? We possibly could see increases in fraud, money laundering and terrorism financing. Or not. The jury’s still out. Here’s what fraud examiners and law enforcement can do as nations move to their own parallel virtual and traditional monetary systems.
Written By: Milind Tiwari, CFE, Adrian Gepp, Ph.D., Kuldeep Kumar, Ph.D.
Don't take this fraud for granted
The U.S. federal government disburses billions in grants annually to worthy recipients. These awards aim to make life better by promoting research and development, finding new disease treatments plus improving education, infrastructure, housing and much more. Of course, big money attracts fraudsters. Here we examine three main types of schemes and how fraud examiners can prevent and deter grant fraud. We also dissect the government’s latest anti-fraud guidance.
Written By: Ken Dieffenbach, CFE
Fraud in the news
Yale dad uncovers college admissions scandal; West Coast ATM skimmers arrested; flooring company pays millions in penalties
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Cyber incidents
As cyber incidents become more complex, your organization’s ability to perform sufficient investigations must adapt. We explore pitfalls that businesses commonly struggle with as they deal with cyber incidents.
Written By: Shawn Fohs, CISM, Chip Guy, CFE, Vincent M. Walden, CFE, CPA
Getting to the truth
We are now at a tipping point in the field of lie and truth detection. Peer-reviewed research and high-stake applications are showing that we need two main skillsets to perform better than the average human and the polygraph: 1) recognizing deceptive behavior via multi-channel analysis and 2) using unexpected prompts in interviews to elicit truth.
Written By: Cliff A. Lansley, Ph.D.
Health care suspicions? Better call a fraud examiner
In an episode of the popular television crime drama “Better Call Saul,” a lawyer stumbles upon a case of health care fraud. In real life, fraud examiners are leading the fight against these types of widespread fraud schemes by gathering evidence, analyzing documents and separating fact from fiction.
Written By: Rick Ruffing, CFE, CPA, Rachel Brooks, CFE, CPA
Formjacking, Netflixphishing and new Medicare card scams
Shopping online is almost second nature now, right? But you could be jeopardizing your identity by just entering information into web page forms. Learn about “formjacking,” how fake Netflix sites are phishing for your PII, Medicare scams and more.
Written By: Robert E. Holtfreter, Ph.D., CFE
Middle East fraud and corruption enigma
Fabulous wealth, staggering poverty, political imbalances and ancient tribal cultures can worsen fraud and corruption. But some organizations and governments in the Middle East are beginning to take tougher stances.
Written By: Mason Wilder, CFE
Want to be an expert witness?
Here’s brutal honesty from CFEs who’ve spent decades as expert witnesses. Prerequisites: thick skin, penchant for over-preparedness and meticulousness, ability to think quickly, poise and a supply of heavy-duty deodorant.
Written By: Dick Carozza, CFE
Moral equilibrium
Doing good deeds is generally recognized as positive. However, these gestures sometimes can be part of a psychological process to license and compensate for aberrant behaviors. A fraud examiner who’s aware of the potential psychological ramifications of these deeds might be able to proactively interdict fraud schemes and mitigate losses of these schemes.
Written By: Bret Hood, CFE
Lessons from 1MDB
Members of the board of 1MDB — a Malaysian federal strategic investment fund — and top Malaysian government officials plus private citizens allegedly illegally syphoned and laundered billions from the fund. Here’s how they escaped controls and lined their pockets.
Written By: Grace Y. Mui, Ph.D., CPA, Huat Lai Thye, CPA
Kendrick Thomas, CFE
As a criminal investigator and training & operations manager at the U.S. Army Criminal Investigation Command in Fort Hood, Texas, Kendrick Thomas, CFE, credits his expanding knowledge of white-collar crime to the connections he’s made as a Certified Fraud Examiner.
Written By: Emily Primeaux, CFE
Using data analytics to find fraud under those shells
Fraudsters increasingly are using shell companies to commit everything from asset misappropriation and money laundering to bribery and corruption schemes. Audit committees want fraud examiners to make sure their organizations aren’t victims. Here’s how to use fraud data analytics to sniff out illegal shells.
Written By: Leonard Vona, CFE
U.K.'s 'Unexplained Wealth Orders' puts teeth into money-laundering fight
The United Kingdom is a haven for dirty money. Some estimate that money launderers might be hiding 90 billion pounds per year — primarily through high-end real estate. The “Unexplained Wealth Orders,” introduced in 2018, might be stanching the flow.
Written By: Mason Wilder, CFE
At 25 years of experience, 5 don'ts and 5 do's
A pensive 25-year fraud examiner shares lessons on working well with colleagues and thriving in the profession. Though much has changed in a quarter of a century, foundational rules will always be in style.
Written By: Phillip V. Poma, CFE
Stopping the clock on employee time theft
Time thieves can become time fraudsters in the right conditions. Protect your employees and organizations by suggesting to top management and human resources departments that they embed sophisticated time-tracking software, procedures and training.
Written By: Jacob A. Mathews, CFE, CPA, Thomas J. Mattus
Fraud in the News
Hackers target DNA tests, elder abuse fraud costs soar and home goods giant accused of securities fraud.
Written By: Randi Zimmer, CFE
Lisa Osofsky's passion for fighting fraud on two continents
The ACFE bestows our Cressey Award annually on someone who’s demonstrated a lifetime of achievement in the detection and deterrence of fraud. This year’s winner couldn’t be more deserving. Lisa Osofsky, the director of the U.K.’s Serious Fraud Office (SFO), has devoted a lifetime of service to fraud awareness on a global scale.
Written By: Bruce Dorris, J.D., CFE, CPA
Why do employees blow the whistle?
Sentinels face few positive reasons for reporting questionable activity or fraud. They often lose their jobs, health, reputations and family stability. Yet every year a handful of whistleblowers step out from the crowd. Here are some reasons why they do it.
Written By: Robin Singh, CFE, LPEC, CFAP
Fraudsters targeting your phone, college prep and paycheck
Do you even answer your cellphone anymore? Fraudsters are sending phone messages with spoofed area codes, numbers and names. Here’s how to avoid the scammers plus information on college test prep scams and online payroll check thefts.
Written By: Robert E. Holtfreter, Ph.D., CFE
Evaluating startups for fraud
The startup world contains ample pressure, opportunity and willingness of entrepreneurs to rationalize decisions to secure market share and deliver on the promises they made to investors. Rarely do the teams that conduct due diligence for VCs and PE firms include someone with experience in detecting and investigating fraud.
Written By: Paul McCormack, CFE
Dual citizenship, single focus
Lisa Osofsky views her dual citizenship as an advantage at the SFO. She’s worked in the anti-fraud private and public sectors, and in the U.S. and U.K. judicial and prosecutorial systems. She intends to use proactive techniques, global cooperation and the latest financial tools to make the U.K. an inhospitable environment for fraudsters.
Written By: Tim Harvey, CFE, JP
The synthetic ID you can't see
Criminals are using a new form of fraud called credit privacy numbers (CPN) to defraud financial institutions and game credit bureaus. Fraud examiners will have to pool their resources and use investigative skills to connect the dots between credit bureaus and banks, and find new ways to combat this plague.
Written By: Jesse Gossman, CFE
CFEs elect Eric R. Feldman and Bethmara Kessler to Board of Regents
Certified Fraud Examiners elected Eric R. Feldman, CFE, and Bethmara Kessler, CFE, to the 2019-2020 ACFE Board of Regents. Fellow CFEs elected them from six candidates selected by the Board’s ACFE Nomination Committee. Feldman and Kessler took office at the board’s meeting in February at ACFE headquarters in Austin, Texas.
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CFE used ACFE student membership to propel career
ACFE student member and CFE shares her journey as a young professional navigating the collegiate to on-the-job path using the help of the ACFE.
Written By: Linh Dang, CFE
Canadian casino money laundering exposes greater fraud problems
A report on money laundering in Canadian casinos by drug-trafficking gangs exposes more than just gamblers showing up with bundles of $20 bills. Here’s a lesson for fraud examiners whose blinders might force them to focus on just one type of fraud.
Written By: Mason Wilder, CFE
Who's more susceptible to fraud?
We know how the Fraud Triangle helps explain the conditions that lead people to commit fraud. But what about the factors that could cause some to be predisposed to fraud? Here are some practical principles to consider when you’re working with fraud victims.
Written By: Donn LeVie, Jr., CFE
Accelerating anti-fraud innovation
As your fraud risk landscape changes, so does the need to adapt and innovate. We explore how organizations are “operationalizing” anti-fraud innovation and continuous improvement.
Written By: Vincent M. Walden, CFE, CPA, Eric Johnson
Journalist finds strength in numbers to keep truth alive
Pulitzer Prize-winning investigative journalist Bastian Obermayer isn’t afraid of investigating the global elite. He’s spent his career digging into the uncomfortable truths of Nazi war criminals, abusive Catholic priests and crooked politicians. Obermayer set into motion the largest collaborative event in the history of journalism when he initiated the Panama Papers. He’ll receive the ACFE’s Guardian Award and speak at the 30th Annual ACFE Global Fraud Conference in Austin, Texas, June 23-28.
Written By: Emily Primeaux, CFE
What really motivates people to be honest in business?
What really motivates people to be honest in business? That’s just one question economist Alexander F. Wagner is asking in his research. This University of Zurich professor will speak on some of his developing answers at the 2019 ACFE Fraud Conference Europe March 27-29 in Zurich.
Written By: Dick Carozza, CFE
Change-of-banking-details scheme defrauds quietly
Beware fraudsters who want to masquerade as your service providers. They’ll steal purchasing information, change bank account details and trick you into paying them.
Written By: Kashmita Reddy, CFE
Unified truth seekers expose fraud and corruption
The initial exchange of the Panama Papers began at Bastian Obermayer’s parents’ home in Germany. His wife and kids were sick with stomach bugs, and he was graciously cleaning up one mess after another. In his words, it was a “really bad day.” He couldn’t know that one strange email would change his life, his newspaper and investigative journalism forever. The subject line read, “Interested in data?”
Written By: Bruce Dorris, J.D., CFE, CPA
If the shoe fits ...
My career journey has been a wonderfully long and winding road through incredible roles in a wide range of industries. I’ve audited, investigated and led large global teams of people whose services kept businesses running, including IT, finance, human resources, marketing, procurement and more. I’ve been lucky enough to work with leaders and teams that have inspired me to learn crucial career lessons along the way. As I think about those lessons, I’ve distilled them down to my top three.
Written By: Bethmara Kessler, CFE
Did ‘psychic’ Maria Duval make a deal with the devil?
Burgeoning fraud against consumers is affecting millions. Two young investigative journalists at CNN recently reported an immense global mail fraud scheme targeting senior citizens.
Written By: Steve C. Morang, CFE
In Memoriam
Janet O. Hicks, a member of the ACFE since 2016, died August 13, 2018. “She was a wonderful colleague with a warm and friendly personality,” said Professor Ned Benton, her mentor, in the August/September 2018 issue of the John Jay News.
Written By: Mason Wilder, CFE
During tax season beware risks of losing your identity
You’re ahead of the curve — you’ve filed your tax return early, but then you discover that a fraudster has stolen your PII and already filed one in your name. You’re a victim of the stolen identity federal income tax refund fraud scheme.
Written By: Robert E. Holtfreter, Ph.D., CFE
Emerging markets conundrum
Organizations are expanding into promising emerging markets. But they’re often encountering market volatility, geopolitical risks, weakening currency and fluctuations, and complex local laws, which can cause fraud and corruption risks. Here’s how to avoid some pitfalls.
Written By: Arpinder Singh, CFE
Nigel Palmer, CFE
Nigel Palmer, CFE, might be a native of Wales (and a dedicated rugby player), but he’s quite comfortable in the Middle East and Africa. As a former Royal Marines Commando, he learned strategies that he still applies to challenging fraud battles as security director at Mars, Inc.
Written By: Emily Primeaux, CFE
5 most scandalous fraud cases of 2018
The ACFE has found that large, noteworthy fraud cases — like Enron or Bernie Madoff — will live on in infamy and can provide valuable lessons for fraud fighters. That’s why we, along with input from our members, have selected these five stories of 2018 as the most scandalous frauds of 2018. We chose the stories based on money lost, lives impacted and relevance to the anti-fraud profession.
Written By: Sarah Hofmann, CFE
Why don't auditors find fraud?
Organizations continue to be at risk because their auditors and accountants often don’t know about, or continuously look for, fraud red flags. And they don’t apply additional audit procedures to offer reasonable assurance that financial statements are free of misstatements due to fraud. Let’s help them and engage everybody in this good fight.
Written By: Ralph Summerford, CFE
Erik Anderson, CFE
Fighting fraud for Erik Anderson, CFE, is so much more than conducting an examination. “I fight fraud by making sure what we’re doing is right,” says Anderson. “Whether I’m on the front lines of an investigation or using the principles of a fraud examination to better understand the risk to the organization, being a good fraud examiner is about challenging yourself to stand up for what’s right and seeking that out with passion.”
Written By: Emily Primeaux, CFE
Kathe Swanson's courage in a small town
Most of our event speakers instruct from the knowledge they have in specific areas of fraud examination. But Kathe isn’t trained in law enforcement, auditing or compliance. She’s someone who noticed something wrong and had the guts and determination to shine a light on it.
Written By: Bruce Dorris, J.D., CFE, CPA
Old-school tenacity
Digital analysis and search apps are invaluable. But nuanced interviewing, with an eye to discerning audiences, can yield solid evidence.
Written By: Megan Tiller, CFE
Dirty contracts
Contract and procurement fraud, collusion and corruption can rob profits from victims. Bid riggers conspire to eliminate fair and open competition and allow some to monopolize industries. Here’s some help in detecting common contract and procurement fraud schemes, and improving the integrity of the contract-award process.
Written By: Charles Piper, CFE
Charging anti-fraud costs to investigated business units might backfire
Consider keeping investigative charges within corporate security and other anti-fraud functions. You might then increase reporting of fraud and other crimes.
Written By: David P. Frizell, Jr., CFE
In Memoriam
Ileana Colón Carlo, a member of the ACFE Board of Regents from 1995 through 1996, and comptroller of Puerto Rico from 1987 to 1997, died March 19 at age 69.
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Six candidates selected for ACFE Board of Regents' ballot
Six candidates have been selected to compete for two positions on the 2019-2020 Board of Regents. The board sets standards to promote professionalism and to ensure the reputation of the CFE credential.
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Ripple effects of fraud
We often focus on a fraud’s perpetrator, the conditions that allowed the fraud, plus the victim business and its owners. In this case, the authors cover the bases but also discuss the forgotten aspect: how the fraud affects so many more who live in the concentric circles around the fraudster.
Written By: Zachary M. Kelley, Trevi Kelley, Cecily Raiborn, Ph.D., CFE, CPA
Dixon's quiet hero
The ACFE’s 2018 Sentinel Award recipient had no intention of changing her orderly life as the city clerk of Dixon, Illinois. And then she found a secret account in city ledgers that led to discovery of Comptroller Rita Crundwell’s astounding $53.7 million fraud. Kathe Swanson’s life will be forever marked by her simple heroic decision.
Written By: Dick Carozza, CFE
South Asia follows parallel roads of burgeoning economy and escalating fraud
It’s a familiar story. A country or region finally is prosperous, but inevitably fraud and corruption increase. Here are some infamous South Asian cases and ways the region has battled what affluence wrought.
Written By: Mason Wilder, CFE
Fraud in the News
Scandal at the Vatican, health scams and ex-Enron CEO Jeffrey Skilling released from prison to a halfway house.
Written By: Randi Zimmer, CFE
Dr. Joseph T. Wells, CFE, CPA, named among ‘Most Influential People in Security’
ACFE founder and Chairman Dr. Joseph T. Wells, CFE, CPA, is among professionals named this year’s Most Influential People in Security by Security magazine.
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Escape the analytics software 'black box'
New developments in forensic data analytics are breaking down traditional barriers to access, transparency and usability. You don’t need an advanced degree to use “data blending” software.
Written By: Vincent M. Walden, CFE, CPA
Spoofed emails enable purchase-order fraud
This case involved a Nigerian crime ring that stole Apple computers and devices by impersonating U.S. defense officials. Make sure purchase orders pass the “smell test,” and call agencies to confirm.
Written By: Bob Bates, CFE, CPA
Jewelry magnate on the run after fraud exposed
Nirav Modi supposedly was one of the richest men in India. He came from a respected family and had close connections to the government. Could he really have pulled off a huge banking fraud to finance his business ventures?
Written By: Steve C. Morang, CFE
Elder financial abuse
When I started my career as a CFE, my background had been primarily in auditing and accounting, and most of my cases were corporate matters. Fraud victims were usually corporate entities looking to quantify a loss and mitigate the lapse in controls. I rarely encountered an individual who suffered a real loss because of a fraud scheme.
Written By: Robert Loh, CFE
Mentoring can move your career forward faster
Whether you’re at the beginning of your career — or second career — or you’ve had years of fraud examination experience, consider entering into a mutually beneficial mentor-mentee professional relationship. This article is for both of you and everybody in between.
Written By: Donn LeVie, Jr., CFE
Victimization of the Massachusetts State Police
If the oldest, largest and arguably most prestigious law enforcement agency in New England can become a victim of multiple frauds, what does that say about your organization’s exposure?
Written By: Lawrence P. III, CFE
ACFE research director finds inspiration from passionate CFEs
When Andi McNeal, CFE, CPA, was in graduate school finishing up her master’s and researching doctorate programs, she read an article written by Dr. Joseph T. Wells, CFE, CPA, founder and Chairman of the ACFE, in the Journal of Accountancy that mentioned the fraud examination course he was teaching at the University of Texas at the time. “I was trying to find a path to focus my doctoral studies on fraud — the intersection of accounting and human behavior has always fascinated me — and I ended up emailing Dr. Wells to find out if he had any suggestions or guidance about where I could find a Ph.D. program in white-collar crime,” she says.
Written By: Emily Primeaux, CFE
Africa needs solid education to fight fraud
When corruption thrives and dirty money is kept in offshore accounts, Africa’s high levels of poverty remain. How do we reverse the trend? The solution lies in reviving countries’ primary educational standards and increasing fraud awareness and education.
Written By: Sandra Damijan, Ph.D., CFE
Fraud fighters power up at the 29th Annual ACFE Global Fraud Conference
More than 3,000 anti-fraud professionals gather at the largest anti-fraud conference in the world to power up their knowledge, networks and careers.
Written By: ACFE Staff, Emily Primeaux, CFE
Integrity is more than a robust code of conduct
Fraud examiners have implemented codes of conduct and compliance programs for decades in their organizations and agencies. Management challenges them to measure the returns on those programs and add an adjective like “integrity” to a list of potential fraud risks. But the overarching question is, “Are our people doing the right things at the right times for the right reasons?”
Written By: Bruce Dorris, J.D., CFE, CPA
Dave Cotton, CFE
The ACFE presented Dave Cotton, CFE, the Certified Fraud Examiner of the Year award at the 29th Annual ACFE Global Fraud Conference in June. Cotton, who’s the chairman at Cotton & Company, LLP, has played a significant role in developing best practices in anti-fraud controls.
Written By: Emily Primeaux, CFE
What's your integrity agenda?
This article explores how to assess the strength of an organization’s integrity capabilities and operationalize integrity processes with contributions from Professor Eugene Soltes, Ph.D., of Harvard Business School, plus Jon Feig, CPA, and Andrew Reisman, J.D., of Ernst & Young LLP’s Forensic & Integrity Services practice.
Written By: Vince M. Walden, CFE, CPA, Eugene Soltes, Ph.D., Jon Feig, CPA, Andrew Reisman, J.D.
Shadow of the American dream
Fraud examiners should consider an enhanced set of Fraud Triangle factors for executives: greed, pride and entitlement. But the question remains, why do these behaviors manifest in executives who might be associated with fraud?
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They empathize because they do what you do
The ACFE Board of Regents offer their counsel and ruminate on the dynamic anti-fraud profession during the 29th Annual ACFE Global Fraud Conference.
Written By: Dick Carozza, CFE, Emily Primeaux, CFE
Fraud in the News
Sports-memorabilia fraud, and cheating and housing scams.
Written By: Randi Zimmer, CFE
Nordic nations' corruption fight remains strong
A recurring theme of scandals bringing down Iceland prime ministers illustrates citizens’ intolerance toward corruption. Yet are attitudes, protests and political repercussions enough to reverse the trend of worsening corruption in Iceland and other Nordic nations?
Written By: Mason Wilder, CFE
Avoid the "blue" in Bluetooth
Bluetooth can connect your phone to your car so that you can use the car’s stereo system. But vulnerabilities expose users to crooks wanting to steal personally identifiable information (PII). The column also covers phone hacking, another popular method of stealing PII.
Written By: Robert E. Holtfreter, Ph.D., CFE
U.S. Navy corruption on the high seas
The $35 million “Fat Leonard” corruption scandal threatens to decimate an entire generation of experienced U.S. Navy officers. What unfolds is the rise and fall of the defense contractor who bought off Navy brass with meals, liquor, women and bribes.
Written By: Steve C. Morang, CFE
Revelatory robots
Data analytics has been helping organizations detect fraud for years. But the future of fraud prevention and detection is looking toward new technologies, like artificial intelligence and machine learning, to stop fraudulent behavior before it costs companies millions.
Written By: Emily Primeaux, CFE
Future of fraud in a blockchain world
You can’t escape blockchain. The topic’s in the media daily. It’s at the forefront of digital disruption and innovation discussions among leading businesses. We’ve seen blockchain technology applications in banking, currencies, supply chain, contracts and dozens of other areas.
Written By: Vincent M. Walden, CFE, CPA
Predicting bad behavior
Though fraud-risk teams worldwide don’t have psychics on staff (that we’re aware of), they can rely on predictive analytics to ascertain the future and assess the probability that third parties will commit fraud — or already have committed undiscovered frauds.
Written By: Allan Sammy, CPA, CGA, CIA, Vladimir Yasenovskiy, Ph.D.
Hook, line and sinker
Did you think phishing campaigns were passé? Well, what’s past is prologue. Phishing attacks, which have increased 30 percent in each of the last three years, are still responsible for most data breaches. Here’s how to understand and prevent them from crippling your organization.
Written By: Robert E. Holtfreter, Ph.D., CFE
A doping dichotomy
A man in Los Angeles was determined to make a documentary that showed the anti-doping system in sport was a fraud. A man in Moscow helped construct that fraud. When Bryan Fogel and Grigory Rodchenkov met in 2015, neither could have guessed they’d land together in the middle of a dangerous geopolitical crisis that would expose decades-long corruption, shake up the Olympics and, ultimately, produce the riveting documentary, ICARUS.
Written By: Dick Carozza, CFE
'Meta-model of fraud'
The Fraud Triangle is tried and true, but we might need more to understand our cases. The authors describe a “meta-model of fraud” that combines the “why-based” Fraud Triangle with the “what-based” Triangle of Fraud Action to better explain fraud cases. We might never know exactly why fraudsters commit crimes, but we can always gather facts and evidence to help prevent and deter fraud.
Written By: Scott Fleming, Ph.D., CPA, CMA, Jonathan T. Marks, CFE, CFF, CPA, Richard Riley, Ph.D., CFE
Johanna Duenser-Mardook, CFE
Johanna Duenser-Mardook, CFE, who’s always loved solving puzzles, says the fight against fraud is a never-ending puzzle to identify missing pieces in cases or internal controls. As the vice president, business initiative fraud policy manager at Citi, Duenser-Mardook says she thrives on closing loopholes that help prevent serious damage to a person or business, financially or otherwise.
Written By: Emily Primeaux, CFE
Power of presence
Leaders at all levels should daily use such high-level soft skills as collaboration, creativity, curiosity, problem-solving, communication skills, conflict management skills, strong work ethic, adaptability, social awareness, empathy, emotional intelligence (the arbiter between the rational brain and emotional brain) and clear self-expression (the ability to clearly express ideas, thoughts and opinions in a variety of media).
Written By: Donn LeVie, Jr., CFE
Swiss whistleblowers pay the price
Whistleblowers are “in.” We regularly hear spectacular U.S. stories of employees blowing the whistle on organizations and receiving large federal payouts from prosecution of multimillion-dollar fraud cases. But what’s the whistleblower situation in Europe and, more specifically, my home base, Switzerland?
Written By: Audrey Milesi, CFE, AML, ACCA
End of the trail
Between 1998 and February 2009, accountant James T. Hammes embezzled more than $8.7 million from his employer, G&J Pepsi-Cola Bottlers Inc. He was indicted shortly thereafter on 75 counts — including 38 for wire fraud and 36 for money laundering — but wasn’t arrested until May 16, 2015. Why did it take so long to arrest Hammes? After the FBI had questioned him in 2009 about the theft, he left his family and life, and began hiking the Appalachian Trail (AT).
Written By: Colin May, CFE, Scott Morantz, CPA
Fraud in the news
App spam, terrorist financing via suitcases on flights and a psychic fails to see fraud in her future.
Written By: Randi Zimmer, CFE
Are you going to make a federal case out of it?
Employees who handle cash in small towns often have few safeguards, so it’s easy for fraudsters to abscond with millions over several years. Here’s how to prevent and deter these supposedly trusted and longtime staffers and how to prosecute them under federal laws.
Written By: Sarah Malcom, CFE, CPA, Tom Mayhall, CFE, CPA
Are the prices of cryptocurrencies being manipulated?
Investors and regulators are concerned that cryptocurrencies are highly susceptible to price manipulation. This danger is particularly pronounced for the hundreds of small, thinly traded “altcoins” that have popped up in the wake of the success of bitcoin and Ethereum. In February, the Commodities Futures Trading Commission (CFTC) issued an advisory warning investors that these small virtual currencies are targets for pump-and-dump schemes.
Written By: Jordan Underhill, J.D., CFE
Beyond the spreadsheet into global intrigue
Bryan Fogel has most likely never performed a ratio analysis on corporate financial statements or testified in court during a fraud trial, but the story he told through the Academy Award-winning documentary, ICARUS, resonates with what we do as fraud examiners.
Written By: Bruce Dorris, J.D., CFE, CPA
W-2 spear phishing taking a toll, plus phone hijacking
With the W-2 email phishing scam, the scammers ask payroll or human resources staff members for copies of W-2 forms for all employees. The forms contain a wealth of PII, including names, addresses, Social Security numbers, salary, wage and withholding information. The criminals use the pilfered information to file fake income tax returns and sometimes follow up with a request to wire transfer money to an account.
Written By: Robert E. Holtfreter, Ph.D., CFE
Fraud on Fyre
Few fraudsters have marketed their schemes on social media as effectively as the organizers of the catastrophic Fyre Festival. They branded the event as “the cultural experience of the decade” for wealthy millennials who were willing to spend thousands of dollars for an exclusive VIP weekend.
Written By: Steve C. Morang, CFE
General Data Protection Regulation (GDPR)
The EU General Data Protection Regulation (GDPR) defines personal data as information relating to an identifiable individual, directly or indirectly. That word “indirectly” is important. By having indirect identification in scope, the regulation acknowledges that the traces one leaves behind online aren’t always the obvious descriptors like names and addresses.
Written By: Courtney Howell
She didn't avert her eyes from 1MDB corruption
Clare Rewcastle Brown just couldn’t ignore the corruption. “I could see it was a massive and underreported scandal of vast proportions,” Brown says in the cover article, written by Sarah Hofmann, CFE. “I asked why no one was covering it, and for some time I hoped someone else would. Then I realized all the local people who knew about it felt disempowered.”
Written By: Bruce Dorris, J.D., CFE, CPA
Pablo Santamaría Cisneros
Pablo Santamaría Cisneros, CFE, believes that a deep digital transformation is happening in the anti-fraud profession. “New cybersecurity and fraud threats are coming,” he says. As global anti-fraud senior manager at BBVA in Madrid, Spain, Santamaría is tackling these new threats by using data-driven business models and advanced analytics while adapting BBVA’s strategies to work with professionals, tools, methodologies and knowledge in the global community.
Written By: Emily Primeaux, CFE
A practical take on fortifying anti-fraud training
In my November/December 2017 column I wrote that academia should expand traditional forensic accounting programs so our future professionals can respond well to contemporary fraud issues. Many universities do include additional training on identifying and understanding fraudulent activities and are hiring more instructors with practical experience.
Written By: Sandra Damijan, Ph.D., CFE
Chile's anti-corruption model raises Latin American standards
In 2017, Odebrecht, a Brazilian construction company, admitted to using bribery and corruption to secure more than 100 projects in 12 countries in Latin America, which generated illegal gains of about $3.3 billion. Odebrecht’s corruption reached the highest levels of government: The web of bribes implicated Latin American presidents, senators and officials.
Written By: Liseli Pennings, CFE
Impersonating the good guys
Susan West was perplexed when she received an email from the Internet Crime Complaint Center (IC3) notifying her that she was eligible for restitution after internet fraudsters had ripped her off. She didn’t remember that she’d been a victim. But she followed the directions to claim the restitution by clicking on an attachment, downloading a form that she filled out with her personally identifiable information (PII) and emailing it to the “IC3.”
Written By: Robert E. Holtfreter, Ph.D., CFE
‘Machine learning’ fights fraud behind cash registers
A global “quick-service” (i.e., minimal table service) restaurant business with thousands of locations accelerated its employee theft-and-error detection rate at the cash register by approximately threefold. Enhancements included the risk analysis of geographic regions, stores, employees and point-of sale (POS) transactions plus integrating “machine learning” for improved fraud detection.
Written By: Vincent M. Walden, CFE, CPA
Fraudulent facets
Diamond fraudsters dupe consumers of all types, including savvy investors and collectors. The global diamond trade, like many other collectable markets, is at the mercy of the absence of transparency. Buyers must cautiously scrutinize gemstones and other low-utility/high-value objects. Here are practical ways for fraud examiners to avoid rip-offs.
Written By: Donn LeVie, Jr., CFE
Confronting the challenges of cross-border fraud examinations
As your organization grows, its business could expand into new nations. You might be conducting fraud examinations in cultures with unfamiliar social customs, laws and judicial systems. As I covered in part one in the January/February issue, you should have a solid cross-border investigative plan before you tackle a case with roots in several different countries.
Written By: Robin Singh, CFE, LPEC, CFAP
Lone brave journalist exposes 1MDB corruption
Independent journalist Clare Rewcastle Brown, at the risk of her safety and without the protection of a news organization, has exposed the flow of billions of public Malaysian dollars from the government’s 1MDB development fund to the country’s top leaders and many others. She says democracies need strong, cynical, courageous media to help protect the public against the powerful.
Written By: Sarah Hofmann, CFE
Power up at the 29th Annual ACFE Global Fraud Conference
Fraud fighters don’t successfully detect and deter fraud on their own — they use resources, contacts and the experiences of others to help save millions of dollars each year to their organizations. More than 3,000 anti-fraud professionals will gather in Las Vegas, Nevada, June 17-22, 2018, for the 29th Annual ACFE Global Fraud Conference to power up their network, boost their skills and recharge their careers.
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Fraud in the News
'Pharma Bro' sentencing, Theranos CEO charged and beer fraud
Written By: Randi Zimmer, CFE
A case of 'Grande Frode' at BT Italy
The “Project Crane” investigation into alleged bullying and other inappropriate behavior of BT Italy executives uncovered the multi-year accounting fraud. In October 2016, BT estimated the fraud to be 145 million pounds. That number grew to 530 million pounds in just four months, and BT would lose more than 8 billion pounds in market capitalization as its shares entered a free fall.
Written By: Steve C. Morang, CFE
Trust us... we wouldn't lie to you
An accounting firm took on a new client from the advice of a good friend, but it didn’t conduct proper due diligence. Big mistake. During an inventory, the client’s CEO repeatedly lied to the author — a fraud examiner — and the external auditors he worked with. Here’s how to avoid fraudulent clients and keep your sanity.
Written By: Stephen Pedneault, CFE, CPA/CFF
Tipsters not trusting the system?
Anonymous hotlines and tip-reporting structures are useless, of course, if informants don’t trust them. Employees won’t blow the whistle if they fear reprisals. So, their concerns often don’t enter case-management systems and frauds continue. Here’s how to earn back their trust, take them seriously and transform raw tips into valuable fraud examinations.
Written By: Jonathan T. Marks, CFE, CFF, CPA
Anonymous shell companies rising
Criminals have learned, through trial and error, that anonymous shell companies can pass scrutiny. Authorities and entities don’t question them, the fraudsters blend in and they don’t appear to be risky. They represent the next big sale, the new low-cost supplier or the helpful business agent. And organizations are eager to work with them. It’s time to start reversing this trend.
Written By: Ryan C. Hubbs, CFE, CIA, CCEP
ACFE Austin Chapter arranges ‘James D. Ratley Day’ in Austin, Texas
ACFE Austin Chapter officers presented a proclamation from the Austin, Texas, mayor naming March 31, 2018, “James D. Ratley Day” to Ratley on the front porch of the historic Gregor Building at the ACFE Headquarters.
Written By: Dick Carozza, CFE
You can't monitor what you can't measure
Fraud examiners and compliance professionals have used continuous monitoring with evidence-based, anti-fraud prevention and detection analytics programs for many years. Historically, the volumes of data generated by businesses have far outpaced the ability of risk-oriented business functions to manage that data, and the inherent risks evident within it, but this is changing.
Written By: Vince M. Walden, CFE, CPA, Ey Fraud Investigation & Dispute Services, Anheuser-Busch Inbev
Fed up
"Hello. This is John Wilson calling from the Federal Reserve Bank of New York Grants Department. You have been selected to receive a $9,000 federal grant based on your clean criminal history and the fact that you have paid your taxes on time. To claim your grant is very simple. You will need to pay a $250 processing fee to the Federal Reserve Bank of New York …” Would you have hung up?
Written By: Kristin Owens, CFE, Robert Amenta, CFE
A ticking time bomb?
Fraud Magazine recently spoke with veteran CFEs Ján Lalka in the Czech Republic, Jonathan T. Marks in the U.S., and Sean McAuley in Scotland about how fraud examiners can help organizations develop secure, workable whistleblowing programs. This article explains why they're essential and, in some cases, a matter of life and death.
Written By: Robert Tie, CFE
Improving fraud risk management with an enhanced Fraud Triangle
The Fraud Triangle has long illustrated the core principles of the ACFE’s training in understanding how fraud occurs. Here the authors suggest a revised Fraud Triangle that considers a more detailed look at a fraudster’s personal characteristics in addition to the rationalization component of the original triangle.
Written By: Douglas M. Boyle, DBA, CPA, CMA, F. Todd Dezoort, Ph.D., CFE, Dana R. Hermanson, Ph.D., David T. Wolfe, CPA, CFF
Studying employees' pressures, rationalizations at an NGO
I was interested in the psychological aspects of fraud, so I conducted research that delved into the pressures and rationalizations of employees, which are closely linked with employee happiness and job satisfaction. I examined these in the context of a local non-governmental organization (NGO) in a developing country in Southeast Asia.
Written By: Steve Johnson, DBA, CFE, CPA, CA
Initial coin offerings
Initial coin offerings (ICOs) are a recent phenomenon used for funding companies that are developing new digital currencies and associated technologies. However, companies offering ICOs are often eager to skirt securities regulations and disclosure requirements, leaving potential investors with vague or misleading information — and fraudsters with new opportunities.
Written By: Jordan Underhill, J.D., CFE
Jadon Fox, CFE
Jadon Fox, CFE, head of fraud control services at Taylor Fry, has analyzed countless transactions using sophisticated technologies and techniques, but he’s most proud of his relentless pursuit of dreams that live outside of the office. “My wife and I’ve always wanted to live overseas,” says Fox. “So, six years ago we sold our dream house, traveled 9,000 miles from home, settled in Australia where we knew no one and I began a job at Commonwealth Bank.”
Written By: Emily Primeaux, CFE
Europol is uniting EU against fraud
Why do we have so much trouble preventing and deterring fraud across borders? You know the answer: lack of cooperation. However, most European law enforcement organizations don’t want to compete with each other. They want to help each other deter and prevent crime. But they need some overarching force to help them work together. That’s where Rob Wainwright and Europol come in.
Written By: Dick Carozza, CFE
Uber’s C-suite set poor tone at the top
In the January/February issue, we examined how Uber and its competitors have changed the hired car industry — and thereby changed the industry’s fraud profile. Here in part two, we take a deeper dive into some of Uber’s fraud, ethics and compliance issues that the business and mainstream press highlighted in 2017.
Written By: Steve C. Morang, CFE
CFEs elect Ryan Hubbs, Tony Prior and Elizabeth Simon to be Regents
Certified Fraud Examiners elected Ryan C. Hubbs, CFE, CIA, CCEP; Tony Prior, MBA, CFE; and Elizabeth Simon, CFE, CPA, to the 2018-2019 ACFE Board of Regents from nine candidates selected by the ACFE Nominations Committee. Hubbs, Prior and Simon took office at the board’s meeting in February at ACFE headquarters in Austin, Texas.
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Let’s support the sentinels
In our cover story, author Robert Tie, CFE, says Merriam Webster’s Thesaurus offers such synonyms for “whistleblower” (for obvious reasons, we prefer “sentinel”) as “betrayer,” “rat” and “snitch.” And he writes that these aren’t just words in a book; they’re manifestations of beliefs that incite and legitimize retaliation for perceived breaches of trust.
Written By: James D. Ratley, CFE
Grandparents' scam revisited and jury-duty fraud
The grandparents' scam, which began about 10 years ago, is still claiming victims regardless of alerts from the media and government agencies. I’ve reported on this scam, but it’s important to address it again because fraudsters, of course, have devised a new-and-improved version that makes the voices of the targeted “grandchildren” even more believable.
Written By: Robert E. Holtfreter, Ph.D., CFE
African corruption prevalent, but we see rays of hope
Africa’s environment promotes corruption because of its reliance on skimming, bribes and asset misappropriation within governments that are ineffective and can’t provide services and resources to their populations. Some countries in Africa have the highest levels of corruption in the world according to the Transparency International’s Corruption Index of 2016.
Written By: Liseli Pennings, CFE
Reaching for returns
U.S. public pension plans are facing an unprecedented crisis with an estimated shortfall of $1.378 trillion needed to pay benefits to retirees. Most pension funds have taken on higher-risk investments to seek increased returns. The rise and fall of the Dallas Police and Fire Pension System because of these non-traditional investments provides a cautionary tale with important lessons for CFEs.
Written By: Monique G. Harley, CFE
Wildlife traffickers eye money laundering
Wildlife trafficking has been defined as “any environment-related crime that involves the illegal trade, smuggling, poaching, capture or collection of endangered species, protected wildlife (including animals and plants that are subject to harvest quotas and regulated by permits), derivatives, or products thereof.” The Convention on the International Trade in Endangered Species of Wild Flora and Fauna (CITES) bans wildlife trafficking.
Written By: David Feige
When thinking about fraud, consider your risk
"We don't have a lot of fraud." This unrealistic, and in my experience common, sentiment can lead to costly and disastrous outcomes. The fact is, organizations don't know how much fraud they have because fraud is invisible until they discover it. If you assume you have very little fraud, you'll pay for it.
Written By: Linda Miller
'Value propositions' and 'set-up statements' are persuasion tools
Whether you’re promoting your expertise to a potential client, marketing a product to a possible customer or pitching an idea to your manager (or your spouse), you should first pique their curiosity before moving forward. You do that with a value proposition or positioning statement. (Business types once called it a unique selling proposition, but most have set it aside for this term that promotes value instead.)
Written By: Donn LeVie, Jr., CFE
Anatomy of denials
Learning these principles will help you distinguish between good and poor denials and make you a better fraud examiner, executive and decision-maker.
Written By: Joe Koenig, CFE
Darknet denizens slither past the law
The darknet is the latest example of technology that’s become a breeding ground for criminal activity. Combating virtual crime in this subset of the deep web is exceedingly difficult because of its anonymity. However, here are some ways law enforcement and fraud examiners are fighting these elusive miscreants.
Written By: Charles Rabeno, Ed.D., CFE
Uber faces fraud challenges in industry it redefined
Apart from drawing the scorn of industry regulators across the globe, Uber has been at the center of multiple fraud and workplace harassment allegations and numerous U.S. Department of Justice (DOJ) investigations. According to one Uber executive I talked to, who requested anonymity, the DOJ is conducting no less than six current investigations involving Uber.
Written By: Steve C. Morang, CFE
Student members invited to apply for annual conference scholarships
The ACFE scholarship award committee encourages all student members to apply for free main conference registrations to the 29th Annual ACFE Global Fraud Conference, June 17-22 in Las Vegas, Nevada.
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Ransomware continues to evolve into new variants
Ransomware, which morphed from scareware fraud around 1998, isn’t abating. Fraudsters are still holding electronic devices ransom with creative variants and extorting money and personally identifiable information. Here are some of the historical and current developments plus ways to help others avoid ransomware.
Written By: Robert E. Holtfreter, Ph.D., CFE
Staying cool in the deposition hot seat
Don’t let your performance suffer as an expert witness during a deposition because of an overbearing attorney asking the questions. Here are tips on how to keep your cool and do a great job for your client.
Written By: Eric A. Kreuter, Ph.D., CFE, CPA, CGMA
‘Profit & Loss-of-One’
Compliance professionals’ ultimate objective is a world in which employees receive only trainings and communications that are relevant to their roles, at exactly the right time (before they encounter compliance issues that require their attention) and in the right amount.
Written By: Ey Fraud Investigation & Dispute Services
A front-line perspective on European anti-fraud training at the IACA
In my November/December 2017 column I wrote that I’d like to share ideas on anti-fraud trainings and related issues to bring together practitioners, academics and students from around the world. Here I’ll focus on anti-fraud training needs in Europe. The International Anti-Corruption Academy (IACA) in Laxenburg, Austria, was formed to overcome shortcomings in anti-fraud knowledge and practice.
Written By: Sandra Damijan, Ph.D., CFE
Confronting the challenges of cross-border fraud examinations
You might eventually work on an internal fraud examination within your global organization that could cross several borders. You can immediately assume, of course, that your examination will be byzantine. If you don’t possess expert knowledge on international laws, procedures and cultural norms you’ll have to add team members who do.
Written By: Robin Singh, CFE, LPEC, CFAP
ACFE and ADAA bring regional fraud conference to Abu Dhabi
Hundreds of anti-fraud professionals will gather at the 2018 ACFE Fraud Conference Middle East, Feb. 25-27 hosted at Jumeirah at Etihad Towers by the ACFE and Abu Dhabi Accountability Authority (ADAA).
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Internet of Things
It’s all connected. From comic-book enthusiasts to conspiracy theorists to new-age acolytes — many believe that those seemingly random dots do connect. And now the “Internet of Things” (IoT) might start us down that road.
Written By: Robert E. Holtfreter, Ph.D., CFE
Survey helps begin conversation on using biometrics to deter financial aid fraud
New and different concepts can cause fear or hesitancy. However, biometric ID is no longer new and different; it’s proved efficient, effective and secure. The technology is part of everyday life for those younger than the baby-boom generation and probably for most baby boomers. Organizations that offer financial aid could increase security and a protection against fraud in their application processes by requiring a combination of a thumb and/or fingerprints plus numeric passcodes such as Social Security numbers.
Written By: Dahli Gray, DBA, CFE, CPA, CGMA, John Tahlier
Small town, huge fraud, insightful documentary
Kelly Richmond Pope, Ph.D., CFE, CPA, an associate accounting professor, has produced and directed a riveting documentary, “All the Queen’s Horses,” about Rita Crundwell’s historic $53 million embezzlement from the city of Dixon, Illinois.
Written By: Dick Carozza, CFE
Tom Golden, CFE, CPA
“I’ve often said in mentoring staff that no matter how smart you are, no one’s successful without someone else giving them a hand up the ladder of success,” says Tom Golden, CFE, CPA. Golden, a professional speaker, author and retired partner at PricewaterhouseCoopers (PwC), now focuses on speaking engagements and the debut of his new novel but says he owes a debt to all who have helped him during his professional career.
Written By: Emily Primeaux, CFE
Fraud in the News
Student loan fraud, tighter enforcement on robocalls and college email phishing on the rise.
Written By: Randi Zimmer, CFE
Key considerations in post-incident financial statement audits
Imagine an organization in the middle of an accounting investigation related to the recording of fictitious revenues. The organization’s external auditors have now come to perform the year-end audit and opine on the current year’s financial statements. The organization, as it should, informs the external auditors of the investigation. These auditors naturally begin to ask questions about the investigation.
Written By: Roger Seifert, CPA, ABV, CFF, Jamal Ahmad, J.D., CFE, CPA/CFF
Anti-fraud training
In 2016, we surveyed 18 Swiss companies — only banks and insurers — about their anti-fraud training programs.1 The findings can be benchmarks for organizations and provide insights into how to enrich programs. Much of our study’s results are easily transferable to any industry in any country.
Written By: Fabia Wenger, Alexander Schuchter
Fraudsters’ slick olive oil switch
You’re in the grocery store, and you’re pleased with yourself. You’ve just chosen a beautiful bottle of extra-virgin olive oil labeled with a picture of verdant Italian olive groves. Unfortunately, the liquid in that bottle also contains soybean, corn, sunflower, cotton, hazelnut, peanut and palm oils. Olive oil fraud is rampant. Here’s how the oily criminals commit their crimes and how to prevent them.
Written By: Donn LeVie, Jr., CFE
Taking down the giant
I've met many whistleblowers in my time, and what’s always resonated with me is that they persist despite nearly impossible odds. Dr. Sam Foote, a physician with a genius mind and audacious spirit, persisted when he found himself facing Goliath: the Phoenix Veterans Affairs (VA) Health Care System. When scandal rocked the department in Arizona, he didn’t back down.
Written By: James D. Ratley, CFE
The doctor who took on Goliath
Dr. Sam Foote didn’t plan to be a whistleblower. He didn’t even plan on being a doctor, let alone one in the U.S. Veterans Affairs Department (VA) during the height of scandal in Arizona. But the moon landing in 1969 altered the course of his future and potentially the lives of thousands of U.S. veterans.
Written By: Emily Primeaux, CFE
Nine candidates selected for ACFE Board of Regents' ballot
Nine candidates have been selected to compete for three positions on the 2018-2019 Board of Regents. The board sets standards to promote professionalism and to ensure the reputation of the CFE credential. “The committee has a very difficult task paring down the final selections from a vastly qualified group of CFEs,” said James D. Ratley, CFE, president of the ACFE and chairman of the ACFE Nominations Committee. “I would like to thank all the applicants who participated in this very important annual event.”
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3 countries, 3 murders and 1 CFE's determination to speak for those who can't speak for themselves
Jeff Filliter was working at a bank in Canada when he was flown to Mexico City to investigate the murder of a 41-year-old branch manager who was last seen entering the back seat of a black Jaguar after work a few days earlier. What Filliter, a CFE and investigator of more than 40 years, relayed to attendees at the 2017 ACFE Fraud Conference Canada in Toronto earlier this month was a story straight out of a Netflix series. The six-year, multijurisdictional fraud and money laundering investigation is also the subject of Filliter’s newly released book, The Shallowest of Men.
Written By: Mandy Moody, CFE
‘Juice jacking’ plus music gift cards
Juice jacking is a form of cyberattack in which a malicious hacker can gain access to personal or sensitive corporate data stored on a personal or business-issued mobile device or inject malicious code into it when an unsuspecting victim uses a compromised public charging station at an airport, business center or hotel at a conference or other public place. All travelers, especially frequent ones, are at a heightened risk of this type of data breach that can lead to increased identity theft activity.
Written By: Robert E. Holtfreter, Ph.D., CFE
Adding anti-fraud training to your curricula
Recent economic crimes have only highlighted the need for more qualified anti-fraud professionals. Many universities and colleges across the U.S. now offer courses that provide such training for students. The ACFE Anti-Fraud Education Partnership supports this growth by providing expert training to accounting, auditing and other business students plus educational tools and resources to instructors.
Written By: Sandra Damijan, Ph.D., CFE
Arson and fraud mix in a deadly combo
Fraud is a non-violent offense, right? Most times. But this is the story of how fraudulent economic arson in a small suburban neighborhood in Indianapolis, Indiana, turned deadly. Community members are reassembling their lives. Here are lessons from the investigation for discovering evidence on arson-for-profit cases.
Written By: L. Christopher Knight, CFE, CPA
ACFE publishes updated benchmarking report
Organizations throughout the world use benchmarking data to evaluate how their performance, structure and operations compare to those of their peers. Benefits of benchmarking include assessing operational efficiency, pinpointing knowledge gaps and identifying areas for potential improvements.
Written By: Andi McNeal, CFE, CPA
Five personality faces of procurement fraud risk
Here are five employee faces to look for when trying to prevent procurement fraud, abuse and noncompliance. Their aberrant behavior can lead to manipulated purchasing systems plus major financial and reputational losses, potential litigation and/or contract termination.
Written By: Tom Caulfield, CFE, CIG, CIGI, Sheryl Steckler, CIG, CICI
Wendy Evans, CFE
“It’s fascinating to me how CFEs each have a different ‘investigative fingerprint,’ ” says Wendy Evans, CFE, senior corporate ethics investigator at Lockheed Martin. Evans’ investigative fingerprint first formed when she began her career as a radio reporter. She says she honed her ability to take a broad subject and condense it into concise sets of 30-second sound bites.
Written By: Emily Primeaux, CFE
Fraud in education, part 2
Unlike the bank, retail, health care and insurance sectors, discovery of fraud in education is still evolving. School reform, growth of for-profit universities, expansion of distance learning programs, restriction of student loan debt forgiveness and school vouchers represent just a few challenges impacting the landscape.
Written By: Tonya J. Mead
Pharma Bro's trial a test for fraud prosecution
Martin Shkreli’s fraudulent activity as a hedge fund manager led to his arrest, trial and conviction on securities fraud. This is the first fraud trial since Bernie Madoff’s to garner such media attention, public interest and academic discussion. But that wasn’t just because of Shkreli’s reputation for frequently and outlandishly using social media or his lawyer quoting Lady Gaga in his opening statement.
Written By: Steve C. Morang, CFE
How the wheels came off the Wells Fargo stagecoach
The author, a former Los Angeles Times reporter, provides a first-person account of how his newspaper broke the Wells Fargo scandal — how employees opened millions of unauthorized deposit and checking accounts, often transferring funds from consumers’ existing accounts without their knowledge or consent.
Written By: E. Scott Reckard
In Memoriam
Longtime ACFE member, Michael G. Kessler, CFE, one of the New York-area’s foremost forensic accountants and private investigators, died June 6 at age 65 after a long battle with cancer.
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Jim Ratley: The real deal
I’m taking over this column just this once to tell you that ACFE President James D. Ratley’s autobiography, “Policing Fraud” is finally out. It’s a terrific read as you’ll see for yourself. But even in his own words, the book can’t quite capture Jim’s essence. If there’s anyone who knows, it would be me — we’ve been together over 31 years.
Written By: Dr. Joseph T. Wells, CFE, CPA
When travel for business becomes fraudulent pleasure
Many organizations allow business-traveling employees to report certain expenses and receive reimbursement for these costs. Unfortunately, this can lead to expense reimbursement fraud. This fraud is a form of asset misappropriation in which an employee steals or misuses their organization’s resources.
Written By: Sujatha Dwaraganath
$100 million mystery behind Mr. Oh's embezzlement
On February 22, Swiss-based global engineering group ABB announced it was the victim of a $100 million internal embezzlement scheme in its South Korean subsidiary. The money and the alleged perpetrator vanished, and an international manhunt is so far unsuccessful. To the best of my knowledge, this is the largest case of employee embezzlement.
Written By: Steve C. Morang, CFE
Where heroes unite
More than 3,000 anti-fraud heroes gather at the largest anti-fraud conference in the world to learn new techniques in their fight against fraud.
Written By: Emily Primeaux, CFE, Dick Carozza, CFE
CFEs earn 31 percent more than their non-credentialed counterparts
Fraud is a global problem, so companies worldwide continue to recognize the need for anti-fraud professionals. The 2017/2018 Compensation Guide for Anti-Fraud Professionals, a members-only resource, shows the ACFE’s ongoing effort to gather data that anti-fraud professionals need to ensure their careers are moving in the right direction.
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A truth about fraud
It doesn’t matter what kind of organization makes the news — whether it’s a manufacturing plant, a sales and marketing company, an importer, a nonprofit, a university or a government entity — when someone behaves badly, someone else usually knows. Fraudsters seldom stop to consider the effects of their actions for their organizations and the people who are witnesses to and/or complicit in the fraud, nor do they let potential consequences change their behavior.
Written By: Laura Downing, CFE
Business email compromise fraud
Once fraudsters have identified the individual who has the authority to perform wire transfers, fraudsters search social media websites and phishing emails to learn more about this person before they precede with the BEC scam. They can gain an accurate understanding of the roles that individuals perform in a business and the messaging procedures for wire transfers.
Written By: Robert E. Holtfreter, Ph.D., CFE
Policing fraud
Long before James D. Ratley, CFE, helped form the ACFE with Founder and Chairman Dr. Joseph T. Wells, CFE, CPA, he had worked with the Dallas Police Department as a street cop, and on the vice squad, in internal affairs, the child abuse unit and other departments. In 1985, he was part of a joint task force assembled to investigate possible widespread fraud at the Dallas/Fort Worth International Airport (DFW). In this excerpt from his autobiography, “Policing Fraud: My Journey from Street Cop to Anti-fraud Leader,” Ratley describes some of the skills he’d later apply and teach as an ACFE leader. — ed.
Written By: James D. Ratley, CFE
Rick Schumacher, CFE
Rick Schumacher, CFE, says he’s always wanted to achieve a more complex understanding of rationalization. He spent years as a cross-cultural communication specialist in the U.S. military, but says he felt a need to link that knowledge to fraud and misconduct. “I started looking to broaden my exposure at a large, multinational organization with a footprint in international markets,” he explains. Schumacher found that at Nissan Motor Corporation as a senior global compliance investigator.
Written By: Emily Primeaux, CFE
The Fraud Triangle on trial
Dr. Donald Cressey’s Fraud Triangle has endured because it’s correct and simple. However, the ACFE has never stated that the triangle can explain every case of fraud. So, be careful when you use the Fraud Triangle in court. The judge might reject it. The Fraud Triangle is a useful tool to help us understand why and how people commit fraud, but it’s not a scientific theory.
Written By: John D. Gill, J.D., CFE
Fraud in education
It’s rare when former students fraudulently entering the U.S. are turned over to the federal government for prosecution. However, technically, the consequence should lead to permanent inadmissibility to the U.S. because of prior fraud or misrepresentation, according to the Immigration and Nationality Act of 1965.
Written By: Tonya J. Mead
The challenge of the chase
The ACFE Board of Regents ponder the exciting, frustrating and exquisite challenges of the fraud examination profession during the 28th Annual ACFE Global Fraud Conference.
Written By: Dick Carozza, CFE, Emily Primeaux, CFE
Secure your fraud zone defense
Congratulations! You have a fraud hotline, but now what? It’s useless without investigation and communication. The author outlines his experiences creating a fraud mitigation program for his multibillion-dollar company.
Written By: Grant R. Wahlstrom
Theranos
Although the Theranos saga is far from over — the company is fighting multiple lawsuits and regulatory actions — I’ll limit my analysis to the “Mad Money” interview. It provides us with valuable insights into how we can apply our interviewing skills as fraud examiners not only to the standard-type fraud examinations we deal with daily but also to unusual high-profile “personality cases” like Theranos.
Written By: Steve C. Morang, CFE
Poor bank account management yields fraud
In our firm’s recent assignments, we’ve faced several fraud schemes at our client companies because of poor bank account management. We’ve been amazed at the lack of internal controls. We observed these frauds on several continents, regardless of the maturity of company internal controls. In some cases, companies have lost a great deal — in finances and reputation. Executives in these companies, including the boards, have, of course, reacted strongly.
Written By: Damien Chaminade, CFE
Erin Reitz, CFE
Erin Reitz, CFE, knew early on that she wanted to work as an investigator in financial crimes and has worked tirelessly during her career to help people who are unable to help themselves. She’s now a senior fraud risk analyst at the Federal Reserve Bank of Cleveland, a job that allows her to work with a team to help protect financial institutions and revenue collection for the U.S. Treasury.
Written By: Emily Primeaux, CFE
See something, say something
The facts discussed in this article are based on the information provided in the indictment. All persons and entities are innocent until proven guilty. — ed.
Written By: Renee Flasher, Ph.D., CFE, CPA, CMA
College summer job search ripe for fraud
College student employment scams have been common for many years and continue to proliferate because of their profitability. Students learn about these fraudulent “job opportunities” by visiting college employment websites at which fraudsters post phony ads or send via emails to their school accounts.
Written By: Robert E. Holtfreter, Ph.D., CFE
Investigating financial crimes against vulnerable adults
Family members, friends and caregivers often prey on defenseless adults. Here’s a “starter kit” to aid CFEs on how to gather and analyze financial, medical and real estate records; present cases to prosecuting authorities; and conduct successful interviews.
Written By: Annette Simmons-Brown, CFE
ACFE Foundation awards scholarships in 23rd year of Ritchie-Jennings Memorial Scholarship Program
The ACFE Foundation has awarded $52,500 to college and university students through the Ritchie-Jennings Memorial Scholarship Program for the 2017-2018 school year. Each recipient also will receive a one-year ACFE student membership.
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Why do they do it?
Harvard business professor Eugene Soltes is on a years-long quest to discover why topflight executives become white-collar criminals. His conversations with close to 50 convicted criminals so far have led to insights on hubris and humility — not just in them but in all of us.
Written By: Dick Carozza, CFE
Making the case for anti-fraud training in higher education
Identity theft, impostor scams, increased exposure through free Wi-Fi, ransomware, phishing schemes, spearfishing — these are no longer topics confined to fraud examiners or industry specialists. College students find themselves victims of fraud in increasing numbers.
Written By: Patricia A. Johnson, MBA, CFE, CPA
Dissecting the minds of fraudsters
Eugene Soltes, a Harvard Business School professor, wants to know why some C-suite executives appear to risk everything to commit fraud. Middle management and employees further down corporate ladders might do it because they’ve found a ready source of cash to ease their economic problems. However, top-flight business people seldom lack for anything; their organizations often reward them spectacularly. Why would they need to steal?
Written By: James D. Ratley, CFE
Letters from prison tell the story of a $1.65 million insurance fraud
Fictitious insurance claims filed by Joshua Miller, owner of a Syracuse hearing-aid dispenser, cost the New York state insurance fund $1.65 million. Learn how he, and others, edged the system to commit the crime.
Written By: John E. Little, CFE, CPA, Megan E. Sutton
Serendipity in interviews
In part one, experienced CFEs described how preparation and flexibility are the keys to good interviews. Here they discuss how they can discover surprising new evidence by asking incisive questions and waiting for serendipitous moments. We also cover question typology, body language, moving toward admissions and more.
Written By: Dick Carozza, CFE
Fraud isn't rocket science
What do pizza chains, horror movies and ski lodges have in common with rockets, satellites and space stations? The U.S. National Aeronautics and Space Administration (NASA) has paid for all these things, whether knowingly or unknowingly.
Written By: Sarah Hofmann, CFE
Espionage, exploding capacitors and fraud
Delayed responses to impending financial disasters can send shockwaves through investor and shareholder communities, and can create cracks in the pillars of corporate ethics and fiduciary responsibility. Here we explore how one high-profile company waited too long to respond to faulty vendor parts on computer motherboards, which led to compounded market share loss, accounting irregularities, customer lawsuits and an SEC investigation.
Written By: Donn LeVie, Jr., CFE
Two CFEs expelled
On Feb. 22, 2017, the ACFE Board of Regents voted to permanently expel Jeffrey Hughes, CFE, of Lawrenceburg, Tennessee, in accordance with the recommendation of the ACFE Board of Review for violating Article II of the ACFE Code of Professional Ethics. The decision was based on Hughes’ convictions for “Theft of Property - $250,000 or More” and “Theft of Property - $10,000-$60,000,” both felonies under Title 39 of the Tennessee Code.
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Mistakes to avoid when looking for your first anti-fraud position
You have to decide if an anti-fraud life is your path. I knew it was for me, so I didn’t give up when faced with initial rejection. I can help you avoid some of the common mistakes when trying to enter this promising field.
Written By: Xavier Hurley
In Toshiba's scandal, blame samurai code
The Toshiba Corporation has struggled since at least 2008 to meet its financial targets. In 2015, the company made a shocking admission: Because of its struggles, Toshiba had committed a multi-year $1.22 billion accounting fraud that culminated in the resignation of CEO Hisao Tanaka in July of that year. What made this most surprising was that Toshiba had been perceived as “a totem of strong and virtuous Japanese corporate governance.”
Written By: Steve C. Morang, CFE
Nuts & bolts of health care fraud examinations
Health care fraud examinations can be laborious. Discovery of evidence can be elusive. You need the most reliable sources and resources. Here’s a practical sampling of some of the best places to start from a fraud examiner who’s worked scores of cases.
Written By: Charles Piper, CFE
The FCPA
Fraud is a global problem with no geographic boundaries. While there are many differences in laws and practices from country to country, the biggest challenge to becoming a true citizen of the world is understanding, and appreciating, cultural differences. Students are encouraged to study abroad during their college years to develop global perspectives. Studying the U.S. Foreign Corrupt Practices Act (FCPA) and its effect on business helps students and faculty develop global points of view.
Written By: Patricia A. Johnson, MBA, CFE, CPA
Sun, sea ... and travel fraud?
Travel scams have been around for years, and fraudsters continue to come up with new versions. Vacationers need to be especially careful from the beginning when they book their travel plans and throughout their entire vacations as fraudsters wait to hijack their personally identifiable information (PII) and use it for identity theft purposes.
Written By: Robert E. Holtfreter, Ph.D., CFE
Placide Schmidiger, CFE
I see many similarities between ski jumping and being a CFE,” says Placide Schmidiger, CFE, head of corporate special investigations at a global logistics company in Switzerland. He says that both require immense preparation. “When I ski jump, I must be prepared mentally and physically. I also analyze the particularities of the jumping hill, the wind and snow conditions, the condition of my equipment, and so on.”
Written By: Emily Primeaux, CFE
Banking on experience
Jennifer Shasky Calvery, the recipient of the 2017 ACFE Cressey Award, fought fraud for 20 years in the U.S. federal government — most recently as the FinCEN director. Now she uses her experience to tackle money laundering and other crimes in the international banking world.
Written By: Dick Carozza, CFE
Shutting down the laundromats
Jennifer Shasky Calvery has been fighting money laundering and other crimes for years — first at the U.S. federal government and now as the Global Head of Financial Crime Compliance at HSBC Bank. Before joining HSBC in 2016, she was director of the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) for four years after a 15-year career at the U.S. Department of Justice. She’ll be receiving the ACFE Cressey Award at the 28th Annual ACFE Global Fraud Conference.
Written By: James D. Ratley, CFE
Teamwork connects the dots to draw a picture of fraud
All fraud cases leave trails. It’s like a kid’s connect-the-dots puzzle. At first glance the puzzle looks like a bunch of randomly scattered spots. But you draw a line linking the specks in the proper sequence that reveals a clear outline of a picture. However, unlike the typical puzzle, in which the dots are usually located in one area, related dots in fraud cases are often scattered throughout multiple jurisdictions, financial institutions, bank accounts, transactions, witnesses, suspects and so on.
Written By: Dorothy Riggs, CFE
New Regents join board during its semi-annual meeting
Alexis C. Bell, CFE, PI, and Vidya Rajarao, CFE, CA, took their oaths of office as newly elected members of the Board of Regents during the board’s semi-annual meeting on February 22 at ACFE headquarters in Austin, Texas.
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Audio recording physician exams
Here’s a simple way to help prevent health care fraud. Patients, with their doctors’ consent, can audio record doctor visits with their smartphones. Audio recordings can verify bills submitted for health care services. And medical providers can upload and store audio files in patients’ electronic medical records to help ensure the veracity of physicians’ diagnoses and interventions.
Written By: Kathleen A. Nicholls
Preparing for a SWIFT message investigation
SWIFT messages are often the most significant primary sources of information for investigators conducting forensic inquiries into possible money laundering, sanctions violations and other forms of financial malfeasance. But while SWIFT messages are standardized, they aren’t very user-friendly, and investigators can encounter a number of potential issues when they extract, process, store, and analyze them.
Written By: Jim Bracken
Preparation and flexibility are keys to good interviews
We asked some experienced CFEs to ponder their interviewing philosophies and techniques. Their responses are diverse and thought-provoking. Now let us know what you think.
Written By: Dick Carozza, CFE
The dynamic duo of cognitive dissonance and moral disengagement
Do employees make conscious decisions to commit fraud, or are they so morally disengaged that they don't associate their actions as unethical or unlawful? Does moral disengagement negate their responsibilities because they don't understand the negative effects of their acts?
Written By: Felicia Riney, D.B.A.
CFEs elect Alexis C. Bell, CFE, PI, and Vidya Rajarao, CFE, CA, to the 2017-2018 ACFE Board of Regents
Certified Fraud Examiners elected Alexis C. Bell, CFE, PI, and Vidya Rajarao, CFE, CA, to the 2017-2018 ACFE Board of Regents from six candidates selected by the board’s nomination committee. Bell and Rajarao took office at the board’s meeting in February at ACFE headquarters in Austin, Texas.
Written By: ACFE Staff
Auditing an organization's governance and ethics
An internal auditor usually analyzes an organization’s ethics when it has an important impact on other key governance aspects, such as risk management, compliance, strategy and how it conducts its business. Strong ethics helps an organization perform better. Here are some practical difficulties that auditors might face when auditing an organization’s governance (not an exhaustive list):
Written By: Nikola Blagojevic, CFE, CISA
Career opportunities in gaming enforcement and investigation
Gambling is an attractive entertainment option for some, but it can also be a hotbed for money laundering, organized crime and other illicit activity. That means, of course, job opportunities for CFEs in a growing field. Can CFEs help deter bad actors from defrauding gaming operations?
Written By: Colin May, CFE
Spying on a master spy
The FBI had tasked Eric O’Neill to investigate Robert Hanssen, a 25-year FBI veteran and suspected spy for the Russians, but he’d have to do it face to face as Hanssen’s office assistant. O’Neill’s courageous work helped bring Hanssen down and end the greatest security breach in U.S. history.
Written By: Dick Carozza, CFE
Getting published isn’t just for academics
As professional anti-fraud practitioners we should take a page out of academics’ playbooks and get published too. You don’t have to publish in academic scholarly journals. You can share your ideas in many trade and practitioner journals, magazines or newsletters, including Fraud Magazine.
Written By: L. Christopher Knight, CFE, CPA
Not so savvy
Technical support scams are very lucrative because fraudsters have a captive audience of electronic device users who know the importance of keeping updated with recent security software and, as a result, will normally listen to spiels about an offer to do a “free” check to spot malware on their computer or “new” software products that they can purchase that supposedly will fix current or future security problems. But, alas, good things sometimes have dire consequences.
Written By: Robert E. Holtfreter, Ph.D., CFE
Glean practical applications from these incisive papers
This column offers a diverse sampling of four recent research studies that might benefit your daily efforts to curb fraud, improve detection and contribute the most value to your limited time. The brief review of these research studies extracts some of the most practical aspects of recent academic literature with a link to each paper for you to obtain more details.
Written By: Jeff Henning, Ph.D., CFE, CPM
Besides greed, what motivates insider traders?
Scott London, a senior partner at a Big 4 accounting firm, shared inside secrets to help a buddy in a tight financial spot. After following the rules for 26 years, why would he commit fraud? Insider traders — mostly males — do it for the money, of course, but they’re also influenced by hubris, feelings of conquest, playing seduction games and adrenaline highs.
Written By: Andrew Snyder, LMFT, CSAC
Spy vs. spy
Here's the situation. You’re a new FBI undercover field operative. But the bureau has called you into headquarters, put a suit and tie on you, and ordered you to take a desk job as the assistant to a longtime FBI special agent and computer systems expert. You’ll be locked in a soundproof, two-office vault to do one thing: covertly surveil this man suspected of being a master spy for the Russians.
Written By: James D. Ratley, CFE
Obtaining financial records with a ‘Subpoena Duces Tecum’
Frequently, CFEs who investigate financial crimes are tasked with obtaining financial records from banks, credit unions, credit card companies, investment houses, mortgage lenders and other institutions to help determine whether a financial crime has been committed and the dollar dimension of the crime.
Written By: Annette Simmons-Brown, CFE
Duplicitous duality
What happens when a CFE’s friend falls into fraud? This veteran interviewing expert grapples with the duality of a young Jekyll and Hyde who became a fraudster, next an informant and finally back into deep deception.
Written By: Don Rabon, CFE
Jeanette LeVie, CFE, vice president and chief operating officer, celebrates 25 years at the ACFE
When the ACFE first started, it was called the National Association of Certified Fraud Examiners and it didn’t operate globally. In LeVie’s 25 years, she’s seen substantive growth domestically and abroad.
Written By: Emily Primeaux, CFE
Tough life lessons from the Bernie Madoff Ponzi scheme
On Sept. 9, 2016, Audible released the first episode of “Ponzi Supernova: Madoff Speaks,” a six-part series hosted and reported by Steve Fishman. The series focuses on the $65 billion Ponzi scheme at Bernard L. Madoff Investment Securities LLC, spearheaded by Madoff, which crumbled with the 2008 financial crisis. As many have said before me, this is a great series for fans of the “Serial” podcast, but for anti-fraud professionals this also serves as an in-depth look into a disturbing case of widespread, unchecked fraud.
Written By: Courtney Howell
Chris Blunt, CFE
“Strive to be great even when others doubt your capabilities,” says Chris Blunt, CFE, senior fraud investigator at Toyota Financial Services. Blunt has lived by this motto throughout his career, even when an injury on the job became motivation to work his way into the fraud-fighting field. Realizing he could contribute more to the corporate environment, Blunt applied for an entry-level job at Toyota and worked his way to a senior-level position. And he credits obtaining his CFE credential for helping him get there.
Written By: Emily Primeaux, CFE
Finding procurement fraud red flags
Have you ever been asked to review procurement practices for your organization or as a third party? Procurement is prone to corruption and bribery and can cost large organizations millions of dollars annually. Here I shed light on some of the best tools and techniques fraud examiners can use to combat procurement fraud.
Written By: Vladimir Chugunov, CFE, ACCA, CIA
The future is now in higher education
As tools for teaching and methods of delivery have evolved, so has anti-fraud education. The members of the ACFE Higher Education Advisory Committee are interested in advancing anti-fraud education in colleges and universities.
Written By: Patricia A. Johnson, MBA, CFE, CPA
A bitter tasting
Some wealthy wine aficionados are comfortable spending millions on supposedly rare vintages. But if they discover that they’re holding hundreds of bottles of worthless wine they might try to unload it to less sophisticated collectors, and bogus wines will continue to circulate. Here are some cases to illustrate the problem and ways to investigate the fraud.
Written By: Donn LeVie, Jr., CFE
Volkswagen’s Dieselgate
On Sept. 18, 2015, the U.S. Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to German automaker Volkswagen Group. The EPA contended that Volkswagen had intentionally programmed diesel engines to activate certain emissions controls only during laboratory emissions testing.
Written By: Steve C. Morang, CFE
The grand scheme of things
We all know fraud isn’t a new phenomenon. But what plays in the news can surprise even the most skilled anti-fraud professional. Cases of multimillion-dollar companies entangled in fraud now take precedence over other kinds of criminal activity. But is the high-stake game of fraud limited to multimillion-dollar organizations?
Written By: Felicia Riney, D.B.A.
Winning the risk game
Organizations can prevent massive, paralyzing frauds. And they can detect small frauds before they become massive frauds. Practical anti-fraud support is available in the new COSO/ACFE Fraud Risk Management Guide.
Written By: David L. Cotton, Sandra Johnigan, Leslye Givarz
Educating millennials and Generation Z
Higher education must keep pace with changes in the world, and anti-fraud educators are no exceptions. While much has been written about changing delivery of courses and new ways of learning for millennials and Generation Z, actually altering traditional methods has been a slow process.
Written By: Patricia A. Johnson, MBA, CFE, CPA
The witness prep survival guide for CFEs
For the uninitiated, witness prep (shorthand, of course, for witness preparation) is a standard practice in which civil and criminal trial attorneys meet with all the witnesses they’ve subpoenaed to testify in their cases. They review the cases and the witnesses’ anticipated testimony, and ... do that, over and over and over again.
Written By: Annette Simmons-Brown, CFE
Finding fraud in bankruptcy cases
HFCC, a fertilizer and chemical applicator, went bankrupt. Investigations discovered the owner committed bank fraud, financial statement fraud and performed fraudulent conveyances or fraudulent transfers. However, a judge ruled that the author and the company’s outside CPA didn’t prove the company was insolvent during all the transfers, which limited the penalties. Here the author proposes a better way to establish the date of the insolvency of an entity and thus recover more fraud proceeds.
Written By: Roger W. Stone, CFE
Too much of a good thing?
Our natural inclinations tell us that the more information we have, the better decisions we can make, according to the author. However, thanks to one grocery store study, the opposite might be true. Read how a jam taste test proves that information overload can actually stymie a fraud examination.
Written By: Bret Hood, CFE
Board of Regents' Disciplinary Actions
Summary of recent ACFE Board of Regents' disciplinary actions
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Procurement predicament
This aerospace case history illustrates how fraudsters are able to easily commit procurement fraud because they can hide behind “veils of trust” they have with organizations’ employees and victims. Here’s how to thrust back the curtains and let the light shine in on cozy arrangements.
Written By: Tom Caulfield, CFE, CIG, CIGI, Sheryl Steckler, CIG, CICI
Following the money isn't a cliché
Fraud examiners use many investigative techniques in the course of a fraud examination including, but not limited to, document review and analysis, public records checks, surveillance and interviews. Seasoned CFEs will tell you they spend a great deal of time and effort in the document review — the investigation and analysis of paper trails, which provide us with many leads as we follow evidence in fraud schemes.
Written By: L. Christopher Knight, CFE, CPA
Dauntless digger
Investigative reporter Andrew Jennings, the 2017 ACFE Guardian Award recipient, has been chasing bad men around the world for more than three decades. He’s dug into the crimes of the members of the International Olympic Committee. And his discoveries at FIFA have led to the eventual indictment and convictions of scores of fraudsters. And he’s still ready with the shovel.
Written By: Dick Carozza, CFE
Conniving school superintendent not so super
Activities at school districts typically generate local media coverage. In the case of the Simptomkin School District, the local newspaper ran an article about superintendent Smith’s annual performance review. The article noted that during his tenure, Smith’s scores on his reviews had steadily declined. The article also said that he’d been the subject of a police investigation resulting from his electronic communications with a female student.
Written By: Jenell West, CFE, CPA, CIA
The many recipes for financial statement fraud
I’ve thoroughly enjoyed writing this column for you. I hope it was useful. Fraudsters have more ways than ever to cook the books, and CFEs need to be diligent in monitoring and investigating the financial and nonfinancial reporting of companies. At one time, we thought financial reporting fraud didn’t have a lot of variety. But now this couldn’t be further from the truth.
Written By: Gerry Zack, CFE, CPA, CIA
Secrets
In two unrelated but sadly similar cases, Harvey and Larry carried on secret, sexually aberrant lives that were decidedly at variance with their known, socially respectable lives. Unfortunately, Harvey and Larry encountered extortionists who exploited their secrets, which cost each man thousands of dollars and one his life.
Written By: Annette Simmons-Brown, CFE
An auto insurance fraud primer and more
Auto insurance fraud is a global fraud phenomenon with billions in losses. This primer will cover the basics plus an innovative way to combat it: social network analysis (SNA). SNA tracks claims patterns among individuals, vehicles, and locations involved in accidents, as well as supports entities such as repair shops, law firms and medical clinics. The result? Evidence discovery.
Written By: Subhash Satyal, MISAM, CFE, CPA (Canada), Pavol Zavarsky, Ph.D., CISSP, CISM, CISA, Shaun Aghili, D.B.A., CFE, CIA, CISSP-ISSMP
Marcel Simonis, CFE
“Fighting fraud isn’t a career for individualists or opportunists,” said Marcel Simonis, CFE. “Fighting fraud is a team effort that includes a lot of hard work, and involves employees with complementary skill sets who can effectively communicate, listen and share their opinions, and work collaboratively to achieve the best results for the business.”
Written By: Emily Primeaux, CFE
Canada fighting fraud with new laws, enforcement
Canada’s history and reputation as a “fraudster’s playground” might finally be coming to an end as regulatory and enforcement authorities enter a more well-rounded anti-fraud regimen. In the past, Canada’s approach to fraud was plagued with inadequacies, which left investors vulnerable and victims with little chance of recovery.
Written By: Brigeeta Richdale, J.D., CFE, Charlotte Teal
The chief was a thief
What tears at the fabric of a small town? Theft, betrayal and a loss of confidence in the very institutions that make the town a great place to live. This is the story of how a small gap became a gaping hole in oversight, management and internal controls, which resulted in a theft of more than $250,000.
Written By: Colin May, CFE
Health care analytics
Why is it such a challenge to control opioid abuse? It’s a combination of the sheer number of pharmacy claims and the woefully outdated manual methods used to review them. The slow, labor-intensive process of manually inspecting spreadsheets, even those generated from a database, can lead to false positives. It also uses time and resources that should be spent tracking down those who are actually committing FWA. The sheer size of data can cause processing time and infrastructure issues, and overwhelm the system.
Written By: Rena Bielinski, Pharm.D., A.H.F.I.
Spear-phishing scam targets teacher identities
According to the ITRC, fraudsters sent emails to New York teachers from two school districts purportedly from their superintendents asking them to send their PII, including Social Security numbers. One employee complied. Instant compromise. Phishing schemes, the most common of fraudsters’ mechanisms for stealing PII and using it for identity theft purposes, come in two types: mass driven and custom made.
Written By: Robert E. Holtfreter, Ph.D., CFE
Do numbers lie?
Corporate management has significant latitude in choosing what numbers to report and when. But business pressures can cloud their judgment. This article examines how using accounting gimmicks and manipulating financial statements might satisfy investors but can cross into fraudulent territory.
Written By: Tom Baugher, J.D., CFE
Tax preparers gone wild
In part one of this two-parter, we examined the schemes of Bonnie G, a self-styled tax preparer who worked out of her basement creating federal and state income tax returns for her clients that contained lies cut from whole cloth to falsely qualify her clients for tax refunds and induce them to continue using — and paying for — her services. Here we’ll examine the simpler but equally effective (or lucrative) scheme of Donnie Z., another tax preparer who never made it out of the basement.
Written By: Annette Simmons-Brown, CFE
Inventory inflation schemes come in many flavors
In this edition, I’ll examine some recent cases involving improper accounting for inventory resulting in overstated assets. As with so many of the companies in the cases I profile, the players in two of the three cases were motivated primarily by a desire to meet published or internal goals for gross profit.
Written By: Gerry Zack, CFE, CPA, CIA
A clueless organization?
As reported in the media on September 9, Wells Fargo negotiated a deal to settle a lawsuit filed by the U.S. Consumer Financial Protection Bureau, the Office of Comptroller of Currency, and the City and County of Los Angeles. As part of the $185 million settlement Wells Fargo didn’t admit to any wrongdoing. However, it did confirm to the regulators and media that employees had opened more than two million checking, savings and credit card accounts without customer approval.
Written By: Steve C. Morang, CFE
Six candidates selected for ACFE Board of Regents' ballot
The ACFE Nominations Committee has selected six candidates to compete for two positions on the 2017-2018 Board of Regents. The board sets standards to promote professionalism and to ensure the reputation of the CFE credential.
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Catch her if you can
Kathleen Daly, Ph.D., professor of criminology and criminal justice at Griffith University in Brisbane, Australia, coined the term “pink-collar crime” in her 1989 article, “Gender and varieties of white-collar crime,” in the academic journal, Criminology, to describe the growing number of lower- to mid-level office women — bookkeepers, office managers, accountants, clerks — who steal from their employers.
Written By: Kelly Paxton, CFE, PI, SMIA
Once upon a time
Whether we’re teaching how to interview, give expert witness testimony or prepare clients’ reports, storytelling is an integral component. How can we provide memorable experiences for our students while making sure that we cover foundational information successful fraud examiners need to know?
Written By: Patricia A. Johnson, MBA, CFE, CPA
Canadian microcap stock manipulation often escapes detection
Although CFEs might not regularly come across microcap stock manipulation, it’s important to be aware of the methods and motivations behind this significant criminal activity. (A microcap is a publicly traded company whose stock might be worth only pennies, which causes prices to be volatile and easier to manipulate.)
Written By: Paul Garside, CFE
To snare a menace
Identity theft attracts fraudsters because they can steal significant amounts with extreme anonymity, and victims and law enforcement can seldom pursue them. However, the authors describe an investigation that yielded the arrest and prosecution of a fraudster who used “synthetic identity theft” and other crimes to steal millions. Learn about their practical methods and a stunning twist.
Written By: Anthony Valenti, CFE, Stephen Korinko, CFE, CPP
Joining forces to manage fraud risk
The ACFE has collaborated with the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to produce the Fraud Risk Management Guide (FRMG) to help organizations focus their anti-fraud efforts.
Written By: ACFE Staff
Hiding in plain sight
Lives Well is a fictional name for a real perpetrator of transaction laundering. It’s the kind of company that flies through automated application checks for most financial products because this thoroughly modern-day enterprise is nothing but a front — an empty shell company hiding a dark secret.
Written By: Albert James Galloni
Should you start an ACFE student chapter?
As a former student member of the ACFE, I can’t think of a better way for budding fraud examiners to explore the profession than as members of university ACFE student chapters. They not only learn valuable anti-fraud skills, but they meet professionals and make contacts that can lead to internships and jobs.
Written By: A. Blair Staley, Colin May, CFE
When do non-GAAP metrics become fraudulent publicity?
For years, companies reported their figures under GAAP or IFRS standards. But what happens when a company commingles the GAAP/IFRS-based financial information with other performance metrics in its reports and press releases? These extra measures have no standards, and no one audits them — perfect conditions for fraud.
Written By: Gerry Zack, CFE, CPA, CIA
Cristiane Soares, CFE
“My greatest achievement is my ability to reinvent myself as I encounter different points in my life,” says Cristiane Soares, CFE, senior investigator at TD Bank. Soares reinvented herself when she moved from her home country of Brazil to Canada to study English.
Written By: Emily Primeaux, CFE
Stanching intellectual property flow
Ryan Duquette, CFE, CFCE, author of the cover article, quotes studies that show that half of all departing employees leave with confidential company information — either deliberately or unintentionally. That’s sobering. How are your organizations deterring the fraudulent flow of intellectual property out the door?
Written By: James D. Ratley, CFE
Utah's 'White Collar Crime Registry'
The Utah legislature began to fight back against affinity fraud in 2011 when it modified the Utah Uniform Securities Act to include harsher penalties for those who used positions of authority to defraud others or who preyed on adults who are impaired because of age, mental or physical disability. The battle continued in 2015 with the White Collar Crime Registry (WCCR).
Written By: Chelsea M. Dye, J.D., Ronald Mano, Ph.D., CFE, CPA
Looking at fraud through a global lens
As technology continues to shape the world, advances in travel and communications have made international business easier to conduct. Anti-fraud professionals can reap the benefits of these advances to help prevent and detect fraud. But heed this caveat: The playing fields are changing. Border-crossing frauds are presenting new challenges to fraud examiners.
Written By: Sarah Hofmann, CFE
27th Annual ACFE Global Fraud Conference
In one week in June, more than 3,000 fraud fighters met in Las Vegas to fill up their tanks and charge their batteries with hours of practical anti-fraud techniques and networking with peers. And to revel in their value to the anti-fraud profession.
Written By: Dick Carozza, CFE
When the Wright Brothers became fraud examiners
The world knows Orville and Wilbur Wright as the team that designed, built and flew the first successful powered flight in a heavier-than-air machine. However, few know that Wilbur and his older brother, Lorin, once came to the aid of their father, Bishop Milton Wright, an itinerant “circuit” preacher, to expose suspected financial abuse in the United Brethren Church.
Written By: Donn LeVie, Jr., CFE
Insider threats!
Don’t let departing employees leave with valuable intellectual property. Use digital forensics in daily workflows before they resign and in exit interviews to prevent IP theft rather than potentially be involved in litigation after they’re gone.
Written By: Ryan Duquette, CFE, CFCE
Strengthening the link between the classroom and practice
Future fraud fighters, whatever their specialties, benefit greatly from having opportunities to practice skills such as interviewing and expert-witness testimony. Who better than a practitioner to help bring these activities to the classroom?
Written By: Patricia A. Johnson, MBA, CFE, CPA
Tech support and BEC scams explode
According to the FBI’s Internet Crime Complaint Center (IC3), in most cases the fraudsters claim to work for cable or internet companies and offer to resolve technical problems with victims’ routers, modems, digital cable boxes or connections to the internet.
Written By: Robert E. Holtfreter, Ph.D., CFE
Your biggest problem? People.
Organizations in every industry sector — private and public — need to step up to the plate and develop comprehensive risk management strategies that include strong ongoing data protection and security awareness programs to help protect the PII and other sensitive information of their customers, clients and employees.
Written By: Robert E. Holtfreter, Ph.D., CFE, Adrian Harrington
Let's do some brainstorming
What happens when you fill a boardroom with highly intelligent people and ask them a few questions about fraud topics? You yield 90 minutes of insights that can’t be contained in one article. In this article, the Board of Regents discuss new frauds on the horizon, data breaches, new practices and training millennials as practitioners.
Written By: Dick Carozza, CFE, Emily Primeaux, CFE
Tax preparers gone wild
Many naïve taxpayers — who believe that all tax preparers have to be certified, licensed or regulated in some way — place their entire trust in supposed experts to handle one of the most serious dimensions of adult life.
Written By: Annette Simmons-Brown, CFE
Out of the frying pan and into the fire
Crime, of course, doesn’t pay. And committing another crime in an attempt to resolve the financial consequences from the first will only dig the perpetrator into a deeper hole. In Dixon’s case, she narrowly avoided jail time for her initial fraud at Classen, but she’s now serving time for the Tompkins County probation violation and could serve even more from the drug charge in Nebraska.
Written By: John E. Little, CFE, CPA
Scammers targeting students with loans, bankruptees, LinkedIn users and more
Fraudsters, who find bankruptcy information and contacts in public records, are effective because they prey on the fears of stressed, panicked victims.
Written By: Robert E. Holtfreter, Ph.D., CFE
The virtual future of money laundering
While today’s leading virtual currencies, like bitcoin, may or may not pass the test of time, the underlying technology is here to stay. Innovators are taking us into a new realm in the exciting (and to some, terrifying) world of virtual currency. How do we prevent criminals from abusing the system in this still fairly new technology?
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More than words
Unaoil, a Monaco-based oil consulting company, was recently exposed in a media investigation for potentially supporting or facilitating bribes on behalf of large multinational firms in the oil and gas industry. The Unaoil case provides several lessons on using forensic email reviews to help gather evidence or indications of fraud, misconduct and regulatory non-compliance.
Written By: Sundaraparipurnan Narayanan
Constructing hotlines that employees can trust
In our cover article, "Top 10 factors leading to hotline distrust: Understanding why no one calls," authors Ryan Hubbs and Julia Kniesche write that whistleblowers have always been subject to false allegations, retribution from management and even dismissal.
Written By: James D. Ratley, CFE
Charles Washington, CFE
Charles Washington, CFE, has learned over his many years in the anti-fraud profession that it takes tenacity, patience and good communication to discover and remediate fraud. As a director – global security, Americas, Washington is responsible for drug diversion and drug discount pricing fraud investigations at Pfizer.
Written By: Emily Primeaux, CFE
Ask me a question, part 2
In this column, we’ll discuss the details of how instructors can prepare in-class practical applications so students can develop and practice their interviewing skills. I’ll supply the specific steps of preparation and execution of the in-class practical interview exercise. (See sample copies of the scenario outline and related documents discussed below at fraudscenarios.com.)
Written By: Tim Shanahan, Patricia A. Johnson, MBA, CFE, CPA
Immunize your organization
A major finding of this study is that contrary to public opinion data breaches have hit organizations of all sizes and in every type of industry. Nobody is safe. Immunize your employees to prevent the insidious infections.
Written By: Adrian Harrington, Robert E. Holtfreter, Ph.D., CFE
A CFE reflects on his approaching 25th anniversary
As I walked up to the podium to make a presentation at a fraud seminar at the Rutgers University Business School, I looked out into the audience. I saw students, law enforcement veterans, New Jersey ACFE Chapter members, auditors and accountants. And I wondered how many sitting there were going to be our future CFEs.
Written By: Edward R Smith, CFE, LPD
Shell shocked
The leak of the huge cache of offshore data in the Panama Papers reveals decades-old shell companies — many of which fraudsters have used to launder money and hide crimes. How can fraud examiners use the data? Will the revelations cause governments to overcompensate with overbearing regulations? Or will the exposé ultimately be ignored because unethical systems are so entrenched?
Written By: Dick Carozza, CFE
A passion for fighting corruption
Alexandra Wrage, founder and president of TRACE International and a former member of FIFA’s Independent Governance Committee, shares her thoughts on last year’s FIFA scandals, the recent release of the Panama Papers and the keys to tackling global corruption through anti-bribery and corruption compliance support.
Written By: Emily Primeaux, CFE
Traditional investigative approaches in China can lead a company into a sinkhole
Guest columnists Howard Wang and Kent Kedl posit that traditional investigations don’t work well in China because of ingrained features of China’s business and legal environment. They suggest changes that will help foreigners in their fraud examinations.
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Dirty digital dollars
Cybercrime and identity theft have evolved into a sophisticated global economy. Perpetrators use the anonymity provided by digital currency and the internet to hide themselves, their criminal acts and their gains. This nine-year cybercrime investigation case illustrates one of the few law enforcement successes in fighting these crimes.
Written By: John Bandler, Esq., CFE, CISSP, GCIH
Why not getting the job offer isn't all that bad (it's fixable)
What? You didn’t get that job offer you were hoping for, even though you followed all the right strategies and tactics (hopefully the ones I’ve previously recommended in this column)? Well, you have no control over some of the variables in the hiring process, such as the economy, the fraud examination profession and regulatory compliance that stymies job growth, among others.
Written By: Donn LeVie, Jr., CFE
ACFE Foundation awards scholarships in 22nd year of Ritchie-Jennings Memorial Scholarship Program
The ACFE Foundation has awarded $55,000 to college and university students through the Ritchie-Jennings Memorial Scholarship Program for the 2016-2017 school year. Each recipient also will receive a one-year ACFE student membership.
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It's all about customer service
This column’s cases deal with improper accounting for special arrangements made with customers. Companies go to great lengths to meet sales goals, including offering special incentives for customers to buy their products. But the accounting rules provide a framework for how and when such incentives should be reflected in a company’s financial statements.
Written By: Gerry Zack, CFE, CPA, CIA
'I didn't commit that crime!'
Financial identity theft occurs when someone misappropriates your personal information to open new accounts, or uses your existing bank or credit accounts to make purchases. A newer type of identity theft — criminal identity theft — is spreading across the country and can be even more damaging than having a criminal destroy your credit rating.
Written By: Robert K. Minniti, CFE, CPA, CVA, CFF
Top 10 factors leading to hotline distrust
Because of worldwide laws, hotline-reporting programs are ubiquitous. But many fail because employees don’t trust them. Here’s how to ensure you have a quality system that concerned employees will use without fear of retribution.
Written By: Ryan C. Hubbs, CFE, CIA, CCEP
She-wolves in shepherd's clothing
Greed is everywhere. It pollutes all industries and organizations, including those dedicated to helping the poorest and most vulnerable of our society. And it breeds fraudsters within these organizations who have profound canniness and precisely zero moral queasiness when selecting their victims. Fraudsters like Emma and Kate.
Written By: Annette Simmons-Brown, CFE
Ask me a question, part 1
Budding fraud examiners, of course, need to learn how to conduct effective interviews. Most major fraud examination textbooks discuss the interviewing process and many are excellent primers. The ACFE and other organizations produce excellent training videos.
Written By: Tim Shanahan, Patricia A. Johnson, MBA, CFE, CPA
Greedy company president sinks family-owned firm
In early 2013, employees of a trucking company were trying to use their health care benefits, but their doctors and hospitals were rejecting them. Their insurance carrier was denying their claims. Their paychecks showed their employer had been deducting their shares of medical insurance premiums, but their insurance cards were worthless.
Written By: Robert J. Gunderson, CFE
How to write 'right'
Writing skills are essential in this profession. The most successful fraud examiners, investigators, attorneys and business people are those who can write clearly, articulately and persuasively using facts they’ve uncovered in the course of the fraud examination.
Written By: Colin May, CFE
Bridging the language gap
When fraud examinations cross borders and cultures, interpreting services are crucial. Here you’ll learn what to do before, during and after an interaction with a foreign-language speaker and how to effectively communicate through the use of an interpreter.
Written By: Mitchell R. Davidson, CFE, CPA, CMA, CIA
A sobering decision
Let’s say you find an accounting regulation violation that your organization might have ignored for years. You bring your concerns to your boss who agrees you’ve discovered a problem. Other accounting department staff members concur until they figure out the restatement costs. You stew over this and realize that your organization is breaking the law.
Written By: James D. Ratley, CFE
How to be the team leader who gets results
Sometimes the seemingly subtle yet damaging impact of poor leadership can make it difficult to identify as a root cause. In other cases, it’s clear something is wrong, but the leaders are in denial of their shortcomings and will attribute all other possibilities to explain their ineffectiveness.
Written By: Ken Bailey, Ph.D., CFE, MHP
Blazing a trail for the Benford's Law of words, part 2
In part 2, the author applies his unique letter analytic techniques to a variety of examples, including keyword searches and predictive analysis using benchmark data. The aim? Finding fraud in the words.
Written By: Richard B. Lanza, CFE, CPA, CGMA
Moving fraud awareness from the back room to the boardroom
The ACFE’s Report to the Nations on Occupational Fraud and Abuse has led to the classification and analysis of thousands of occupational frauds. But, perhaps, more importantly, it has shown organizational management and the public the dire need for well-planned fraud awareness, deterrence and prevention programs.
Written By: Dick Carozza, CFE
He fought Halliburton and won
Tony Menendez, CFE, found some questionable accounting practices at Halliburton. When he realized the company was knowingly violating Securities and Exchange Commission rules — and the SEC wasn’t going to investigate — he brought a whistleblower claim against Halliburton for violating his rights under the Sarbanes-Oxley Act. After a nearly nine-year fight, he was vindicated.
Written By: Dick Carozza, CFE
Employees are the weakest links, part 1
This study shows that untrained employees are the linchpins for most data breaches. Organizations can help prevent them if they're filled with savvy and aware employees at all levels.
Written By: Robert E. Holtfreter, Ph.D., CFE, Adrian Harrington
New Regents join board during its semi-annual meeting
Sidney P. Blum, CFE, CPA/CFF, Leah D. Lane, CFE, and Nancy E. Rich, CFE, took their oaths of office as newly elected members of the Board of Regents during the board’s semi-annual meeting on February 25 at ACFE headquarters in Austin, Texas.
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Telephone and phishing scams taking their toll
Fraudsters know that we sometimes get rushed and make mistakes when we dial telephone numbers. So they’ve purchased hundreds of telephone numbers, including those of the toll-free variety, that are similar to common business numbers — except for one digit.
Written By: Robert E. Holtfreter, Ph.D., CFE
A whole lot of hanky-panky going on
During my six-plus years as a regional bank fraud investigator I’ve delved into a legion of cases categorized as romance or sweetheart scams. You might believe that only simpletons fall prey to romance hustles, but con artists don’t discriminate. Victims are male, female, young, middle-aged, elderly, benighted, well-bred and of various races, creeds and nationalities.
Written By: Dorothy Riggs, CFE
Jala Attia, CFE
"I’m passionate about educating people about health care fraud and creating a fire in others that will ultimately fuel the fight for future generations," says Jala Attia, CFE. "Many people don’t realize the extent of the problem we’re facing."
Written By: Emily Primeaux, CFE
When 'fair value' isn't so fair
Fair value is one of the more complicated and controversial areas of accounting. Some assets and liabilities are initially recognized at their fair values, and some of those are subsequently adjusted to account for changes in fair value.
Written By: Gerry Zack, CFE, CPA, CIA
Smartphone security
While it’s crucial that CFEs are aware that mobile devices — smartphones and tablets — bring fraud risks to organizations, it’s also critical that they know the risks of using their own mobile devices in professional settings.
Written By: Nikola Blagojevic, CFE, CISA
Denying illicit revenue
Crimes such as counterfeiting or trafficking in drugs, humans or arms always will have a global and local impact. It doesn’t matter whether they occur in a low-income housing project in the U.S., a jungle in Bolivia, or a business district in New York, Panama, Costa Rica or Puerto Rico — even the most modest enterprise has global impact, requires transnational border crossings and has an endgame.
Written By: Michael A. Cole, CFE
Memorable cases, part 2
ACFE faculty members share more notable cases from the trenches with practical principles that you can apply.
Written By: Dick Carozza, CFE
Joseph B. Wells, CFE
Joseph B. Wells, CFE, not only shares his name with ACFE founder and Chairman, Dr. Joseph T. Wells, CFE, CPA, but also experience as FBI special agents.
Written By: Emily Primeaux, CFE
Female fraud fighters are leading the charge
On March 8 we celebrate International Women’s Day. Since the inception of the ACFE in 1988, female membership has grown tremendously. We can be proud that the anti-fraud profession has become an ideal place for ambitious women fraud fighters who can use their unique qualities.
Written By: Emily Primeaux, CFE
Identifying prescription abuse via fraud analytics
People are dying from drug overdoses in increasingly alarming numbers. They’re from poor, middle-class and wealthy communities. The deaths have jumped in nearly every county just in the U.S. — driven largely by an escalating increase in addiction to prescription painkillers and heroin.
Written By: Erwin Acuna, CFE, Erik Chase, CFE, CPhT
Why no top execs prosecuted after the Great Recession?
Jed S. Rakoff, U.S. district judge for the Southern District of New York, says in our cover article that the reasons for the government’s lack of prosecutions ranged “from the diversion of FBI agents to other priorities to prosecutors’ increasing unfamiliarity with how to pursue such cases.”
Written By: James D. Ratley, CFE
Incoming millennial fraud tidal wave
When you hear about “millennials,” also known as “Generation Y,” what’s your reaction? Do you cringe or do you smile? Do your eyes roll thinking about their alleged feelings of self-entitlement, or do you breathe a sigh of relief knowing their technological expertise has helped you work through important problems?
Written By: Bret Hood, CFE
CFEs elect Sidney P. Blum, Leah D. Lane and Nancy E. Rich to Board of Regents
Certified Fraud Examiners have elected Sidney P. Blum, CFE, CPA, CFF; Leah D. Lane, CFE; and Nancy E. Rich, CFE, MPA, to the 2016-2017 ACFE Board of Regents from nine candidates selected by the Board’s nomination committee.
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XFINITY, Amazon, Facebook and Wal-Mart identity theft scams
Online scams abound! Cybercrooks aren’t resting as they work to pry cash from your wallets and purses. The Identity Theft Resource Center (ITRC) recently reported scams involving XFINITY, Amazon, Facebook and Wal-Mart.
Written By: Robert E. Holtfreter, Ph.D., CFE
They're attacking you
You have to tell your students that the good guys are losing the battle to hackers. Organizations are vulnerable, and criminals are perpetrating vast amounts of online fraud daily. Here’s what you can teach them.
Written By: Jonathan Nichols, Patricia A. Johnson, MBA, CFE, CPA
Blazing a trail for the Benford's Law of words, part 1
Fraud examiners have used Benford’s Law for years to detect anomalies and possible fraud in organizations’ ledgers and journals. Now the author is researching a method to analyze letters of the alphabet in business documents — “Letter Analytics” — to find fraud patterns. His new approach could expedite fraud examinations.
Written By: Richard B. Lanza, CFE, CPA, CGMA
Chapters raise nearly $18,000 in ACFE Scholarship Fundraising Challenge
For the second year, the ACFE challenged its local chapters to raise funds for the ACFE Foundation’s Ritchie-Jennings Memorial Scholarship program. Chapter leaders once again answered to call to help college students continue the fight against fraud.
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The big four
In this column, we hear from a seasoned fraud fighter and educator who has some excellent advice on skill building for new CFEs and students. You can discover how to develop these essential core traits through a mentor relationship or by observing those professionals you admire.
Written By: L. Christopher Knight, CFE, CPA, Colin May, CFE
Truth revealed
Senior U.S. District Judge Jed S. Rakoff, keynoter at the upcoming 27th Annual ACFE Global Fraud Conference, hasn’t shied from vividly chastising Wall Street and the U.S. government in the wake of the Great Recession.
Written By: Dick Carozza, CFE
Use my easy method to produce and protect your passwords
Passwords are an integral part of our lives. We use them to gain access to our phones and computers and to withdraw cash or pay bills. They help keep our personally identifiable information and finances safe.
Written By: Tim Harvey, CFE, JP
Small-and-lean entity learns to deter fraud after $690,000 loss
Jordana Stroud excelled at fundraising. From as early as anyone could remember she had a knack for getting people to part with their money for a good cause. She paid her way through Indiana University by fundraising on behalf of various nonprofit organizations and earned a bachelor’s degree in nonprofit management.
Written By: Robert Hogan, CFE
Numbers manipulator describes Enron’s descent
Nearly 15 years ago the actions of Enron’s C-suite executives led to the company’s demise. In this interview with Andrew Fastow, former Enron CFO, read how the toxic corporate culture and his rationalizations behind “finding the loopholes” led to one of the largest and most well-known cases of corporate fraud and corruption.
Written By: Emily Primeaux, CFE
Fraud Week 2015
International Fraud Awareness Week 2015 last November was another great opportunity for fraud fighters around the world to educate the public about preventing and deterring fraud.
Written By: Sarah Hofmann, CFE
Won't get fooled again, but they'll try
With a nod to Pete Townshend and The Who, many auditors have expressed their determination to not get fooled again after being deceived by creative fraudsters. One of the underlying questions in many of the cases I’ve profiled is: “What did the auditors do?”
Written By: Gerry Zack, CFE, CPA, CIA
Inaugural ACFE Middle East Fraud Conference reinforces global fight against fraud
Under the kind patronage of His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, the Deputy Ruler of Dubai and Chairman of the Financial Audit Department, and hosted by the FAD of Dubai, the inaugural conference brought together more than 400 anti-fraud professionals to learn the latest anti-fraud techniques and tools.
Written By: Emily Primeaux, CFE
Getting ahead of the risk
When your work duties revolve around auditing or the detection of fraudulent behavior, the Fraud Triangle model is a useful resource in identifying potential offenders or situations. But what if your duties involve risk assessment or training? The Fraud Triangle can also provide a visual analysis of future business decisions and the building blocks of instructor-led training.
Written By: Leslie D. Reed, CFE, CP
Roving signature stamp
Pamela Johnson, a low-level accounts assistant, had a hidden gambling problem and the trust of the Tompkins Consolidated Area Transit. Here’s how she exploited her employer’s confidence and how the external auditors actually discovered the devastating three-year fraud.
Written By: John E. Little, CFE, CPA, Jason H. Grossman
Nicole Biskop, CFE
“Get started on your journey! Don’t wait until the perfect job opportunity comes your way,” says Nicole Biskop, CFE, project officer for the DOJ in Sydney, Australia. “Reflect on your experiences, skills and motivation, and decide on the direction you want to take in your career."
Written By: Emily Primeaux, CFE
Fraud examiners and investigative journalists
David Barboza, a business correspondent for The New York Times, is the 2016 Guardian Award recipient because he exposed corruption at high levels of the Chinese government, including billions in secret wealth owned by the prime minister’s relatives.
Written By: James D. Ratley, CFE
Fraud examination 2025
Fraud examiners must think innovatively to stay ahead of fraudsters and prevent fraud from growing exponentially. We all know this, but this maxim challenges practitioners and educators because the business environment is changing rapidly.
Written By: Patricia A. Johnson, MBA, CFE, CPA
Submitting case reports to prosecutors
Much of our days are consumed with the meat-and-potatoes, real-time components of fraud examinations: taking reports; interviewing suspects, victims and witnesses; obtaining financial records, other pertinent documents and media; analyzing all of the information; and developing conclusions of possible criminal offenses.
Written By: Annette Simmons-Brown, CFE
Lack of integrity burdens society and opens portals to fraud
Integrity is the quality of always doing what you know you should do. Think about it. How many of the things that you know you should do, do you always do and never skip? How you would feel about yourself if you consistently did what you know you should do?
Written By: W. Steve Albrecht, Ph.D., CFE, CPA
Business email scam rampant
Fraudsters target businesses working with foreign suppliers and/or businesses that regularly perform wire-transfer payments. The crooks use social engineering or computer intrusion techniques to compromise real business email accounts and create unauthorized transfers of funds out of business bank accounts.
Written By: Robert E. Holtfreter, Ph.D., CFE
Memorable cases, part 1
ACFE faculty members share some notable cases from the trenches with practical principles that you can apply.
Written By: Dick Carozza, CFE
Back home to the ACFE
After 16 years as a U.S. special agent, Liseli Pennings, CFE, returns to the ACFE to help worldwide agencies fight fraud and work efficiently with private sectors.
Written By: Dick Carozza, CFE
Uncovering hidden billions in China
New York Times reporter David Barboza — a keynoter at the 27th Annual ACFE Global Fraud Conference — discovered at least $2.7 billion in assets controlled by relatives of the former Chinese premier. Read how he found the smoking guns among public records.
Written By: Dick Carozza, CFE
Statistical sampling
With large caseloads and limited resources, fraud examiners need to be able to effectively and efficiently complete fraud examinations. A case is easier, of course, when we’ve isolated the fraudsters, discovered what they’re doing and how they’re committing the crimes.
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Practical open-source tips for tracking global scammers
Most frauds, of course, cross borders. In previous columns we've looked at romance scams, the 419 con and lottery fraud — all of which fraudsters still use to extract money from the vulnerable and gullible.
Written By: Tim Harvey, CFE, JP
Fakes, forgeries and dirty deals
The opaque and unregulated global art market is vulnerable to forgeries, tax fraud, insurance fraud and money laundering. Here are details on how fraud examiners can detect and investigate crimes in this murky corner of creative commerce and why circumstances are often in the fraudster’s favor.
Written By: John Powers, CFE
ACFE’s team 'Toned at the Top' raises nearly $2,500 for Susan G. Komen Race for the Cure
On Sept. 26, 2016, 28 ACFE staff members, their friends and family participated in their first-annual Susan G. Komen Race for the Cure in Austin, Texas. This one-day event raises funds and awareness for the breast cancer movement, celebrates breast cancer survivorship and honors those who’ve lost their battles with the disease. Team "Toned at the Top" raised $2,466 for the event.
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2015 ACFE Asia-Pacific Fraud Conference tackles the big fraud questions
“When the ACFE was founded in 1988, the life of the Certified Fraud Examiner was not as complicated as it is today,” said Jim Ratley. “The computer was still in limited use, and we were just beginning to hear a new term: ‘the Internet.’ There was also a new device sitting on people’s desk called the fax machine. Little did we know how technology was about to change our profession.”
Written By: Emily Primeaux, CFE
Dipping into the cookie jar
Companies sometimes employ cookie-jar reserves during periods of strong financial performance as cushions for the inevitable future periods when performance will decline.
Written By: Gerry Zack, CFE, CPA, CIA
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