Fraud investigations delve into “shadow crimes.” They involve intentional deceit, concealment and frequently the illegal transfer or acceptance of funds. These criminal acts are often concealed by falsifying documentation and collusion among several parties and results in the theft of money or other valuables. Fraud is hard to detect, and searching it out requires diligence, particularly in the activities of interviewing suspects and preserving evidence.
Employee interviews are a critical element in determining if fraudulent activity has occurred. Employees should be interviewed separately, as opposed to en masse. These individuals should be asked about their professional duties and responsibilities. Employees are also asked about their contacts inside the company, as well as for calligraphy samples, which would be used to check against any signatures on potentially fraudulent documents. It may be necessary to conduct background searches for records of criminal backgrounds, bankruptcies, personal financial records and assets, as these can aid in determining if there have been any unorthodox transfers or receipts of currency or property.
As with any criminal investigation, several interview tactics can be utilised by investigators to gauge suspects. These include the narrative method, the bluff method, and the Reid technique. The narrative method is the most straight-forward form of interviewing. The technique enables the suspect to recall his or her side of the story, without any interruption from the interviewer. Frequently, the suspect may be asked to repeat the story multiple times; this is done in order to establish consistency, or the inconsistency, in the recollection. The investigator listens to the narrative, justifies facts or inconsistencies and then re-interrogates the suspect as necessary.
The bluff method is another effective way of probing suspects. The interviewer will tell the suspect that there is unequivocal evidence of guilt. For example, the interviewer will state that a reliable witness saw the suspect commit the illegal activity or that his fingerprints have been found on the forged documents, even though this information has yet to be substantiated. The tactic essentially aims to provoke the suspect into admitting his or her guilt. If the suspect is innocent, he will maintain his disbelief at the given facts.
The Reid technique is generally seen as an effective investigatory model, albeit slightly more controversial. The Reid technique involves a non-accusatory interview proceeded by carefully phrased behavior-provoking questions. The interviewer approaches the suspect in a non-threatening, understanding way; this is done in order to make the suspect feel comfortable to the point that they acknowledge and admit the crime. The focus of the technique is on eliminating innocent suspects.
Fraud investigations are not the crime scenes seen on television dramas. The evidence that is typically analysed takes the form of financial and legal documents. This form of evidence requires particular care and preservation.
Uncovering fraudulent activity requires a “connect-the-dots” approach; that is, one piece of information leads to another. All potential clues should be fully exhausted before the fraud investigator determines if illicit actions have or have not been committed. Investigators should conduct a slow and meticulous search of the documentation. All business and personal computers of a person under investigation should be reviewed, including email accounts. Phone and mobile phone records should also be inspected for any unusual activity, along with passkey or identity logs at corporate facilities. Any irregularity should be noted, gathered and placed carefully in evidence for further analysis.
Upon the procurement of veritable evidence, it is essential to establish a clear chain of custody. All evidence must be inventoried and secured to preserve its integrity. The admissibility of evidence in court is predicated upon an unbroken chain of custody. It is important to demonstrate that the evidence introduced at trial is the exact evidence collected during the investigation, and that access was controlled and chronicled.