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.
Marcus, the new CFO for a charter school group, is settling into his job overseeing multiple schools. He’s a CFE and a CPA with 15 years of public accounting experience. He’s audited charter schools for the last five years, which helped him land this new position. Steve, the CEO, is charismatic and seemingly intelligent, dedicated and supportive. Marcus accepted the job because he was convinced that Steve would be good to work with, and the budget for these schools was significantly higher than anywhere else Marcus had worked. He viewed this opportunity as a huge promotion with the potential to open up even bigger positions.
Everything changed for Marcus on Christmas Eve of 2015. On that day, he attended a holiday party at Steve’s house. The party was packed with teachers, staff and administrators. The event was catered with an open bar around a huge swimming pool. Steve took Marcus on a tour of the house, and everything was top of the line. Marcus was impressed with the 10-car garage that housed Steve’s sports cars.
Marcus enjoyed the party, but he wondered how Steve could afford his luxuries. Marcus knew how much money Steve made and quickly realized that things didn’t add up. But he’d only been in his job for about six weeks, so he didn’t want to jump to any conclusions. After the holidays, he began to do some digging.
Marcus eventually discovered multiple instances in Steve’s life of what appeared to be fraud. He went to the FBI and showed the white-collar crime special agent his evidence. The agent immediately opened an investigation. Marcus ended up wearing a wire for the next three months as he collected information about Steve and many others for the FBI. Three years later, Steve pleaded guilty to multiple state and federal charges and is now awaiting sentencing.
Would Marcus have found any of this evidence had he not attended the Christmas party? He clearly experienced some type of serendipity by stumbling on information he hadn’t sought while many others who received the same info failed to take any action whatsoever.
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