This article was originally published in Fraud Magazine - March/April 2015 issue.
“I love getting
bad guys — I think that would be so fun
to do with you!” said the
prospective job applicant sitting across from me. I’d just asked her why she
would want to come to work for my firm.
I
considered my next move carefully. “Tell me how you would feel about working
for one of those bad guys,” I said. The furrowed brow and crook of her neck
indicated that she was perplexed. I obliged her. “Well, in this office we work
for white-collar criminals, tax evaders and people sometimes perceived as the
‘bad guys.’ So how would you feel about that?” I asked. I then sat back to
observe what her verbal and nonverbal cues would be (I practice my interviewing
skills any chance I get, don’t you?). She was suddenly parched, swallowed
multiple times and took a deep breath before answering, “I didn’t think you would ever do such a thing. I mean,
I guess, well … I always thought of you as someone who worked for the good
guys.”
I
didn’t hire the applicant.
I
had a similar conversation with a fraud examiner over lunch during a recent
speaking engagement. She clearly was frustrated by her clients who chose not to
prosecute their alleged fraudsters. She told the group at our table about a
couple of prosecutions that had resulted in the alleged fraudster “only having
to do community service and a small amount of restitution.” She was physically
and emotionally upset about these outcomes. My curiosity got the better of me
and I asked, “Why does this bother you so much?” She explained that she had put
so much work into these cases and it wasn’t “fair” or “right” that these people
avoided more formal or significant punishment for their alleged crimes.
I
gently reminded her that it wasn’t our job to exact punishment. Most
importantly, our own ACFE Code of Professional Ethics expressly prohibits us
from opining on a person’s guilt or innocence. She acknowledged this, but I
pressed further. How many defense cases have you worked? The reaction from her
was similar to my job applicant. “None!” she said. “I don’t see how I could ever defend someone who had committed a
fraud!”
Encounters
such as these aren’t uncommon. Admittedly, they’re delicate conversations — often
ones that those of us in private practice discuss in private.
ACFE
training is unlike any other. If you want to be a fraud examiner, there’s no
better place to get your education, training and credential (and I don’t say
this just because I’m an ACFE faculty member and member of the Board of Regents).
However, the training applies to both sides. In my own private practice, there’s
plenty of room and good reason to work defense cases. In fact, the work is
similar no matter what side you’re working on.
If you’re
considering how or whether to take on defense cases, read on.
Consider your ability to be impartial
Discovering “why” you’re
doing your job is important (it certainly makes going to work every day easier).
A predisposition to “get” a bad guy can be a detriment in a case and can place
blinders on a fraud examiner who might see questionable documentation as a
crime — when in fact it’s only red flags of fraud. Zealotry could lead to
unnecessary work, false accusations, inaccurate employment-related decisions
and potential liability, which can then harm the client or others.
Consider
a recent case of mine. A woman (I’ll call her Betty) had worked 30 years as the
office manager for my client’s medical practice. A new physician-partner in the
group was trying to get up to speed, so he asked Betty for bank records,
financial statements and other standard documents. She refused. An office-sized
firestorm ensued. Doctors took sides, and accusations flew among staff members even
though they didn’t yet have any real information.
I
walked into the perfect climate for possible fraud: A long-term trusted office
manager who never took vacations and who was now refusing to provide simple
financial documents.
My
interviews discovered that Betty was the sole person responsible for billing
insurance companies and patients, collecting funds and taking them to the bank,
writing checks, reconciling the bank account, processing payroll and managing
the financials. Sounds familiar? Surely I would find fraud, right?
We
scoured the bank statements, canceled checks and payroll records. We didn’t
find any fraudulent disbursement schemes. We searched the billing system and
analyzed customer credits. Betty had supported them with appropriate
documentation. We traced funds to the bank with no exceptions. After all that, we
still didn’t find fraud.
We
recommended stopping the investigation, but the medical practice asked us to
keep going back further. More records, more expense but still no fraud.
When
I finally talked to Betty, she said she had “hurt feelings” when the new physician
began asking questions. Why wouldn’t he trust her when she’d worked there for
so long and gave all of herself to her job? However, I gently reminded Betty
that her sole custody of these funds meant that she was unsafe in her job, and
any missing money would point to her. Betty’s demeanor changed immediately, and
she was suddenly ready to start offloading some of her responsibilities.
We
didn’t take this job as a true defense engagement, but our work resulted in
effectively clearing someone who was “on the defense” against potential
criminal allegations.
Fraud examiner’s role
As fraud
examiners, our roles are the same in plaintiffs’ or defendants’ cases: We’re fact finders. We conduct interviews,
examine documents, identify evidence, prepare reports, and, yes, even work on
obtaining confessions.
I’ll
never forget the first time a defense attorney called me. My firm was new and
I, too, thought my role was to go after “the bad guys.” A call from a new
attorney, Steve, changed all of that. His client was accused of taking nearly
$10 million from a publicly traded company. She was looking at significant jail
time. I wrongly assumed he was calling to ask me to “defend her” (i.e. find
some angle or story to get the charges dropped). I couldn’t have been more
wrong.
“Ms.
Couch, I need help here. The government is telling me she’s taken millions. My
client is telling me she didn’t, and it can all be explained. I don’t know who
to believe.”
Admittedly,
the government’s case was terrible. The feds’ work-up of the case was
cumbersome and confusing. The CPA firm that’d originally handled the case
hadn’t prepared a written report. I accepted the case, and Steve’s client
became my client.
I
traced millions of dollars of the public company’s funds into our client’s
account. I told Steve the facts — what had happened and how. I had no plausible
explanation for these funds being in this account. Amazingly, I worked with our
client (the defendant) to confess and admit to her wrongdoing. Steve then could
negotiate a plea deal with the government. Our client went to prison for many
years. And since then, the attorney has brought or referred countless cases to us .
Communicate your role
Some
attorneys will want to pay you to testify to certain positions early in cases. Run
away. Fast. Not only do I disengage from these matters, I refuse future calls
from these people. Clients pay us for our expertise and our time. They don’t
pay us for our opinions or for “prescribed” testimony.
Testimony is based on facts and work
performed. You don’t need to worry if cases are for “plaintiffs” or “defendants”
when you’re clear in your role and responsibilities and you’re able to
communicate that role via your engagement letters and in meetings with your
clients. You only need to be concerned that you have the resources to perform
the work well.
Bias
For
those of us in private practice, we also have a business reason to take on
cases from “both sides.” Opposing counsel is going to immediately question your
credentials and experience to see if you’re working for “our side” or the
“other.” He’s going to try to infer a perception of bias. But he can’t do that
if you have had a healthy balance of clients who are plaintiffs and defendants.
Working for the defense can help you construct
better plaintiffs’ cases. You’ll better understand your work, the necessity for
simpler and easily comprehended reports, and that all findings need to be
documented with evidence.
The ‘why’ of my job
In the decade I’ve
had the privilege of calling myself a Certified Fraud Examiner, I’ve discovered
my “why”: I work hard for my clients — whether plaintiffs or defendants — who trust
me to assist them through what can be the most difficult times in their lives
and who thank me for support and expertise.
When
we’re able to take complex and confusing information and turn it into clear and
concise deliverables, then our clients are able to make educated decisions. When
a client thanks you for doing that, you can’t receive a better compliment.
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