The Fraud Examiner

BBB CEO Believes CFEs Should Look to Technology to Fight Fraud

July 2016

ACFE Member Profile
Steve McFarland, CFE, CICA, CBM
Chief Executive Officer 
Better Business Bureau of Los Angeles and Silicon Valley

Steve McFarland, CFE, CICA, CBM, first entered into fraud investigation as a personal favor to a friend who had fallen victim to a fraudulent general contractor. Fresh from graduate school, he was appointed an interim investigator on a cased and was able to get a settlement for his friend and other victims of the contractor. He translated that zeal for justice into a career, becoming the CEO of the Better Business Bureau (BBB) of Los Angeles and Silicon Valley. Working to protect both consumers and businesses from fraud, he believes it is especially pertinent for CFEs to learn more about technology and cybercrime. He says, “Staying ahead of the perpetrators is a daunting mission. Education and training are sorely needed, as are the technical skills needed to stop the acts before they occur.”

Where were you born and raised?

I was born in Hayward, California, and raised in San Jose, California. I participated in team sports through high school and at the college level while working summers for a local accounting firm. Early on, I knew I wanted to be trained in accounting to learn the flow of business from a practical vantage.

How did you become passionate about fighting fraud?

Just out of graduate school, I learned one of my good friends had lost a lot of money when an unscrupulous general contractor filed bankruptcy and left him and dozens of other subcontractors empty handed. We suspected the contractor used the cash to open a new business, so I took on the investigation as a personal challenge. A few months later, I attended the bankruptcy hearing and shamelessly asked the federal judge a series of probing questions about the debtor. To my surprise, she set aside her decision and appointed me, a mid-20s greenhorn, as the interim investigator on the case with permission to examine the assets of the general contractor. The judge sensed the debtor’s lack of candor and she was tired of pounding the gavel case after case without having a resource to verify her suspicions.

Fortunately, I found enough incriminating information and obtained the confessions of several staff members, resentful of their boss, who knew I was looking for the truth. The case ended with a settlement, mostly in favor of the subcontractors, so the stress was worth the effort, and the experience for a young, aggressive examiner was priceless. Years later, my typical clients were comprised of high-tech firms intrigued by my unique mix of accounting, CFE and private investigator skills along with my curiosity and zeal for human intelligence.

What is one of the biggest lessons you have learned since becoming a CFE?

Build trust. You must build trust — with your clients, your prospects and even your adversaries. You can acquire credibility, but you must build trust. Billy Graham said, “If you lose money, you have lost something. If you lose your health, you have lost a lot. If you lose your values, you have lost everything.” Compromising your values and professionalism will erode the trust you worked so hard to achieve. As a CFE for 23 years, I have learned clients appreciate honesty and candor as much as hard work.

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