Fraud is defined by Black's Law Dictionary as a generic term, "embracing all multifarious means by which human ingenuity can devise, and which are resorted to by one individual to get an advantage over another by false suggestions or suppression of the truth, and includes all surprise, trick, cunning, or dissembling, and any unfair way by which another is cheated." No absolute assurance can be given that fraud exists or does not exist because fraud remains concealed until some event or transgression uncovers its possible existence.Once the possible existence of fraud is discovered, other frauds can be used to conceal it.For these reasons, a fraud examiner may not express any opinion that any enterprise is free of fraud.
From the Investigative Perspective - Fraud is hidden.There is no absolute assurance that a fraud does or does not exist. To prove that a fraud has not occurred, one must endeavor to prove that is has occurred. To prove that afraud has occurred, one must endeavor to prove that it has not occurred. The final determination as to whether fraud exists is the responsibility of the courts and juries.
In order to prove that a financial statement is accurately stated, tests are normally conducted in an attempt to prove they are not.To prove cash is in balance, for example, a test is conducted (counting the cash) in an attempt to find an error, omission, or defalcation.
Fraud examiners must begin with a proposition: that fraud has been committed, or conversely, that it has not.The methodology for proving those two mirror images is exactly the same: the interviews of potential witnesses, the gathering of documentary and other physical evidence, and the interrogation of the suspect(s) of the examination to support or refute either proposition.For examination purposes it theoretically should not matter which approach is taken, as long as the examination methodology is consistently applied.In each approach the same witnesses are interviewed, the same suspect is interrogated, and the same records and other evidence is gathered.The conclusions, therefore, regardless of the approach, should be the same.
Our Experience and Services Regarding Fraud Examinations
These unique investigations require years of training and experience in order to properly and adequately analyze the available data, know how to acquire additional data, conduct sensitive and in-depth interviews, obtain signed sworn statements, design flow charts and other exhibits to simplify often complicated matters for the lay reader and to serve in a constructive consulting role to assist counsel and others in preparing the case.
Approaching a fraud investigation requires proof of what happened, how it happened, who did it and, in some cases, why it was done and how to prevent it in the future. All of these elements require proving that the events actually occurred. Investigating negatives only helps to reduce the field of possibilities. Two of the main causes of failure in the investigation of fraud cases are improperly trained investigators and under-funding.
Being able to estimate the time needed to enter data into a spreadsheet, conduct surprise interviews, correlate masses of bank records or other documents, build a timeline continuum, delegate to and oversee assistants and finally assemble the case work product requires considerable experience.
Depending on the case at hand, we often use the hypothesis approach in constructing an investigation model. This occurs only after extensive consultations with the client and a review of the available documents. The fraud examiner must be an integral part of any team effort. Surveillance may be conducted during complex fraud investigations. In litigation cases, it is helpful in the case development and ultimate success that counsel keeps the investigative team informed as new developments arise just as the investigative team keeps the client/counsel informed.
Fraud investigations, like other complex investigations, typically produce results after the bulk of the work has been completed. A considerable amount of time is expended in sifting through data, looking for patterns of activity or behavior, connecting data to suspects and eliminating volumes of ultimately unimportant or irrelevant information. It is important for the client/attorney to realize the majority of the case work results in gradual development, not in the final product. The final phase of case work is separating and assembling the substantive elements and preparing the case report and exhibits. Regular communications from the investigator to the client/counsel helps to maintain a close working relationship. We prefer to send an email to our clients each week to give them a status report on our progress. This helps the client with his/her agenda as it relates to the case and serves as a reminder to keep the investigator informed of any new information or changes. Most of our cases, particularly RICO investigations, are relatively large, complex and/or time consuming.
The initial retainer, plus customary expenses, is determined after our initial consultation with the client. The retainer is expended at an hourly rate which does not include database search fees, reasonable travel expenses, and administrative overhead for support staff. A complete expense accounting is provided on a regular basis. As a case progresses, costs are discussed and agreed upon prior to any additional expenditures being incurred.
There is no charge for an initial consultation. If we can be of assistance to you please call us or visit our Contact Us page.
