No Confession, No Evidence, No Case?

Adults believe they're proficient in being able to tell when others lie to them. Parents, for example, can describe in detail the telltale signs of their young children's changes in body language, speech, or demeanor when they lie. Corporate managers think they can "ferret out" someone who lies to them in a job interview.

Fraud examiners, investigators, and auditors, in particular, find their ability to detect deception a key component of their success. Most have received formalized training in the detection of deception.

Consider this story as an unusual example of how the absence of deception helped make the case. A large company retained me to investigate theft from its warehouse where the employees are non-union and responsible for the receipt, storage, and distribution of the warehouse merchandise. Except for the warehouse employees, the company's main operations employees are members of the appropriate union. A confidential informant pointed to one warehouse suspect, "Fred Smith," who stole from the warehouse and then gave, traded, or sold warehouse products to union and non-union employees at the facility.

Fred kept some of the merchandise at his home and he subsequently was arrested for possession of stolen property. In exchange for a reduced sentence, he agreed to fully cooperate in the examination by speaking with company security personnel and me.

Of course, the corporate managers and I were wary - even skeptical - of Fred and his proposed cooperation. And he was an admitted thief, liar, and drug user. It's common for a criminal in such a situation to try to increase his appearance of cooperation by minimizing his involvement in illegal acts or other activities that are against the company's proprietary interests and fabricating the involvement of others.

Despite company negotiations with union representatives, none of the union employees agreed to be interviewed. Several resigned in lieu of termination and the rest were terminated following strict union guidelines. All the terminated union employees requested representation from the union, but because of additional corroborative evidence, the union declined to assist all but five in being reinstated, thus upholding their terminations. The union decided to represent the five employees because, other than Fred's allegations, there was no additional evidence and no other witnesses. So the client company was forced to defend the terminations in union arbitration.

As a witness at all five of the arbitration hearings, I found it necessary to defend why I believed that Fred told the truth about each of the terminated union employees - even in the absence of independent evidence or the opportunity to interview the five terminated union employees for possible signs of deception.

Putting your knowledge to the test 

I've examined many other cases in which I've concluded, based upon my perceived presence of deception indicators, that the interview/interrogation subjects were lying and/or withholding information. That finding of deception on the part of the accused, coupled with other evidence and/or witness statements, was often the basis of legal or administrative action. However, a rarer situation is when the fraud examiner's opinion of a witness' truthfulness, based on the lack of deception indicators, is the sole lynchpin of articulating the deception of co-conspirators especially without being able to interview those other persons.

In this case, there were four separate professional arbitrators, all of whom were attorneys, in the five union arbitrations. (One arbitrator heard two separate cases.) Both the union and the client company agreed on the choice of the arbitrators.

Obviously, the burden of proof, the rules of evidence, and the rules of procedure were much less stringent in this arbitration hearing than they would have been in a court of law. In fact, there wasn't a need to have a proof beyond a reasonable doubt or even proof through the preponderance of evidence, but the arbitrator still must have been persuaded through "clear and convincing proof" that the union employee's termination should be upheld.

Make a list and check it twice 

During the examination, I compiled a list of the reasons why I believed Fred more than the union employees who had denied the allegations but declined to be interviewed, which the client company used to make its decisions to terminate and the arbitrators received in the five union arbitration hearings:

• Consistent statements
  Fred initially submitted to more than 12 hours of debriefing, all videotaped, over two consecutive days. Subsequently, he submitted to almost 20 hours of questioning over several months. All Fred's statements were consistent with each other and other verified facts verified in the examination. No significant variances in Fred's statements were ever noted.
• Full admissions without minimization or rationalization
  In Fred's statements, he never attempted to minimize or rationalize his own illegal behavior. He never asked for, nor did he ever attempt to negotiate, immunity or any additional deal beyond the original agreement.
• Statements against own interests
  Fred could have only admitted theft but he also said he had drug problems, which he knew could have resulted in additional charges. And at that point he hadn't known that the examination had uncovered drug use and distribution among employees.
• Risk vs. gain
  Although Fred hoped to reduce his criminal sentence by cooperating, he knew that if a subsequent investigation had found he had fabricated even an iota, his testimony would have been considered null and void and he would be subjected to the harshest jail penalties under the law. He was motivated by knowing that anything less than 100 percent cooperation would be viewed as no cooperation.
• Statements against brother
  Fred's brother, with whom he has a close, protective relationship, was one of the non-union employees he had implicated in illegal activities including theft and drug use. Fred's comments could have been used to assist in the prosecution of his brother, (although they weren't), but Fred said that he was compelled to tell the truth and he encouraged his brother to also cooperate in the investigation.
• Used appropriate caveats
  When Fred provided information, he used "I think," "I don't know," and other caveats to explain the difference between things he knew from firsthand knowledge, things he knew from conversations with others, and things he believed (even if he had no specific reason to believe so). It's common for someone who is fabricating information to be more "certain" of all the information they provided. In fact, some of Fred's caveats prevented some union employees from being terminated because of his lack of certainty regarding certain key aspects of those employees' behavior. For example, if Fred said he gave a stolen item to another employee but he didn't see that employee put the item in his car or remove it from the premises then it could not be inferred that the item was stolen. Fred identified the employees he witnessed engaging in illegal behavior and admitted when he had not seen others do so.
• High percentage of corroboration
  Much of what Fred said was corroborated through confessions of non-union employees even though there was very little corroboration of any of the allegations against the union employees and no corroboration regarding the five union employees who grieved their terminations in arbitration.
• No new evidence to suggest fabrication
  Before, during, and subsequent to the investigation, no evidence surfaced to suggest that Fred fabricated his story or any portion of his story.
• No substantial disparity from known facts
  The examination produced a significant amount of factual information none of which was known by or provided to Fred. Nothing Fred said reflected any substantial disparity from those facts.
• No prior knowledge of investigative findings
  Fred was aware, as were all client company employees, that the examination had been ongoing for a number of months because of the obvious interviews. Yet Fred couldn't and didn't know the findings of the examination and therefore was unable to tailor his comments to fit his notion of the findings.
• Lack of uniformity
  Fred didn't tell the same "stories" about each of the people about whom he provided derogatory information. (He provided information on more than 20 employees - union and non-union.) He was aware of vast amounts of information about some union employees and could only provide minimal information about other union employees.
• Acknowledgement of failure to provide proof
  Fred always acknowledged when his comments about any particular employee were less than conclusive. A deceptive person would have been willing to "fill in the blanks" to provide more substantial information to further implicate the employee, but Fred always admitted when he told all that he knew and when he was unable to provide the "smoking gun."
• High confidence/low fear
  Fred exhibited a high level of confidence in the veracity of his comments and virtually no fear that the examination would develop any information that would indicate his lack of truthfulness.
• No evidence of animosity towards co-conspirators
  It would be easy to attribute Fred's comments about his co-conspirators, particularly those about whom he presented the most damning information, to feuding, animosity, or other bad feelings. But Fred's comments included derogatory information against friends and relatives (including his own brother) and sometimes only minimal information about those persons with whom Fred admittedly didn't like.
• Outcome: three out of five
  My recommendations helped convince the client company managers that Fred was telling the truth. Four arbitrators in five separate hearings would now have to determine if Fred's comments and the company's resulting belief in those comments would be sufficient to warrant the discharge of the five union employees.

In a perfect world, there would have been consistency among all four of the arbitrators - particularly on whether Fred was a believable witness. However, two of the arbitrators cited their failure to believe Fred (in the absence of additional specific evidence) as the basis for reinstating two of the five Union employees.

The remaining two arbitrators (one of whom heard two separate cases) believed Fred and used that belief as a basis for their decisions to uphold the termination of three of the five Union employees. One arbitrator even wrote in his opinion, "The additional reasons for finding the statements of (Fred) to be credible are based upon the expert testimony and opinions of the fraud investigator." These arbitrators found it reasonable for the client company to make a good faith judgment based on my findings.

So sometimes in a fraud examination you don't have to be stymied when the sole lynchpin of the case is the absence of a suspect's deception. Even without the testimony of co-conspirators you might prove the guilt of all parties if you wisely analyze your key witness and apply specialized methods.

David P. Frizell Jr., CFE, is president of Frizell Group International, Inc,. in Houston, Texas, offering investigations, security consulting, and intelligence services. He has more than 25 years of interview and interrogation experience including more than two years as a CIA polygraph examiner. His Web site is: www.frizellgroup.com.