Look Before You Leap: Forensic Investigations Financial Fraud MGT 506-1

2 Discussion Points  Whether To Conduct  Planning Phase  Covert/Discreet Phase  Transitional Phase  Open Phase  Remedial Phase

3 Whether To Investigate?  Pros Knowledge of facts needed for options Incentives for voluntary disclosure  Cons Cost – Hard & Soft Tip of Iceberg Reputation and legal liability for failing to disclose

4 Planning Phase  Assembling The Investigative Team Independence Competence Investigative Resource  Scope Inflating value  Legal Implications Investigative techniques Third party liabilities  Business Implications Discipline Morale Disclosure to law enforcement

5 Covert/Discreet Phase  Why So Important  Undercover/Sting Operations  Database Research Commercial Databases Internet  Workplace Searches  Surveillance  Computer Forensics  Field Interviews

6 Transitional Phase  War Story: Bklyn Wanna Mafia Be’s  Issues Who Where When How Contingency Planning

7 Open Phase  Investigative Mentality  Corporate Miranda Warnings  Document Gathering  Interviews  Investigative Report

8 Remediation  Quantifying damages  Negotiating subject's resignation of employment or disciplinary action  Negotiating financial recovery from the subject and other parties  Negotiating financial recovery with third party victims  Advising on business implications of investigative results  Lobbying prosecutors and other law enforcement authorities to file criminal charges against the subject  Conducting fraud audits of other business units for vulnerability to similar misconduct  Developing controls to deter recurrence  Monitoring of future business activities

9 Dimon Case Study Fraud Against Employees/Joint Venture Partners  Fraud Against Suppliers  Fraud Against Customers Government Commercial parties Consumers  Sample Schemes Antitrust Defective pricing Shipment of damaged goods