Preparation and flexibility are keys to good interviews

We asked some experienced CFEs to ponder their interviewing philosophies and techniques. Their responses are diverse and thought-provoking. Now let us know what you think.

Eight years ago, Regent Emeritus Bruce Dubinsky, CFE, CFF, CPA, relearned the value of tempering his laborious interview preparations with facile, improvised flexibility.

As a managing director in the disputes and investigations practice at a global valuation and corporate finance advisory firm, he was conducting a series of interviews with six people who worked with a political campaign that was raising money for the reelection of one of the international officers of the International Brotherhood of Teamsters. Dubinsky, a managing director of Duff and Phelps, LLC, was heading up an investigation on campaign finance fraud pursuant to a consent decree from the U.S. District Court of the Southern District of New York.

Dubinsky and his team — another investigator from the U.S. Department of Labor plus a court reporter — headed to the West Coast to take sworn statements from these “persons of interest” who all had their lawyers with them during the questioning.

“It was towards the end of the day and I was questioning the last of the six individuals,” Dubinsky says. “This man was the treasurer of the campaign for the particular international officer for whom they were raising money. I was just about to wrap up the interview and I asked for a minute or two to go over my notes to make sure I covered what I needed.”

Dubinsky says he asked one last question about a fundraiser near the local union offices.

“Before I could even finish asking my question, the response from the treasurer was ‘OH, I knew you were going to ask me about that fundraiser.’ To which I replied: ‘Oh, you knew I was going to ask you about that fundraiser, huh?’ ”

Treasurer: Yeah, I knew you would, and it was bad.
Dubinsky: Yeah, it was bad, huh?
Treasurer: Man, I mean I knew I shouldn’t have done it.
Dubinsky: Yeah, you shouldn’t have done it.
Treasurer: I knew it was wrong, and we would get caught.
Dubinsky: Yeah, you knew it was wrong and you would get caught, huh?

“At this point, I’m waiting for the criminal lawyer to shut this gig down,” Dubinsky says. “To my surprise, he just sat there like a potted plant.

“Mind you, at this point, I have no clue what this guy is about to tell me, and I had no clue that there was even a problem with the fundraiser. My question that I was going to ask was about a receipt that was missing a date. But, hey, the guy is spilling his guts so who am I to stop that,” Dubinsky says.

Treasurer: Look it wasn’t that much money that we couldn’t account for. It was about $5,000 out of the $75k we raised.
Dubinsky: Yeah, I know it was only $5,000.
Treasurer: We just couldn’t figure out who gave us the money so I just listed it under my name and the other business agent since we were both under the campaign-finance dollar limit.
Dubinsky: So, let’s go over in more detail again how the $5,000 was recorded.

“Columbo would’ve been proud of this interview,” Dubinsky says. “The treasurer was found guilty of violating the campaign finance rules, removed from the campaign and thrown out of the Teamsters. And the campaign was fined and had to disgorge the money.

“The learning lesson here is: Be prepared to roll with the punches,” Dubinsky says. “The best-planned interviews always take twists and turns, and you better be prepared to abruptly change course and style to get the information you’re seeking. And as my fourth-grade teacher used to say: Use your ears twice as much as your mouth, and you will gain far more information that way.”

Like a Boy Scout, be prepared

Fraud Magazine recently informally surveyed several experienced CFEs to gather their views and methods of that important component of fraud examinations: interviewing. “If you don’t interview people, you don’t know much,” says Beth Mohr, CFE, managing partner of McHard Accounting Consulting, LLC. “Documents only get you so far.”

The CFEs’ answers run the gamut, but most agree that they never enter an interview without thorough preparation.

“The one interview tip that I always emphasize is preparation,” says Hal Humphreys, CFE, lead investigator for FIND Investigations. “Spend as much time as necessary to learn the facts,” he says. “The only guaranteed way to know if someone is telling you something contrary to fact is to know the facts.

Once you get them to start talking usually they will keep talking. Try to find common interests to talk about.”

Ryan Hubbs, CFE, CCEP, CIA, agrees with Humphreys. “It wasn’t long after I started conducting corporate investigations that I realized that well-planned and well-executed interviews were an absolute integral part of the entire investigative process,” Hubbs says.

“In one of my first interviews I hadn’t run all of the issues to ground. When I interviewed the subject, he was able to cast so much doubt into what I thought were known and settled facts, that we had to backtrack and re-perform large sections of the investigation,” says Hubbs, a global audit manager for Schlumberger and a member of the ACFE faculty.

“At the end of the day we made the case, but you never want to go into an interview without proper planning and a complete understanding of what you know and what you don’t know,” Hubbs says.

Regent Emeritus Joe Dervaes, CFE, ACFE Fellow, CIA, says fraud examiners should completely understand the internal controls and all aspects of the underlying documents in the subject matter area when a fraud has been detected. “Studying these two major areas of the case is the best way to ensure a successful interview,” says Dervaes, who retired in 2006 as the audit manager for special investigations at the Washington State Auditor’s Office.

“The fraud examiner must be prepared to deal with any information the interviewee brings to the table,” Dervaes says. “And, if you don’t know the answer to a question, don’t ask it because you won’t know how to establish the validity of the answer given.”

Developing list of subjects to interview

Jenny Brawley, CFE, director of financial fraud investigations for Freddie Mac and an ACFE faculty member, says that mortgage fraud often involves many people who touch a loan application. “I start from the outermost edge of the circle and work my way closer to the players most likely to have had the ability to perpetrate the fraud,” she says. “By the time the most culpable suspects are interviewed, many of the gaps in the theory or scheme have been answered.”

Don Rabon, CFE, perhaps the dean of interviewing instruction for decades for the ACFE and other groups, says that depending on the setting, he analyzes the discourse from the various respondents, “identifying those who have the operational access to commit the suspected fraud and those on the peripheral who may have information that they may not even know is important to the inquiry,” Rabon says.

Hubbs has some standard questions he asks himself early in the case development process:

• Who may have direct and indirect knowledge of the issues?
• Is there a known subject? Are there multiple subjects?
• Who else may be involved?
• Who has information that could help substantiate or refute the concerns?
• Could peers be involved?
• Could individuals from other departments or areas, whether internal or external be involved?
• Could management or subordinates be involved?

Janet McHard, CFE, CPA, CFF, president of McHard Accounting Consulting, LLC, and an ACFE faculty member, says she prefers to get an overview from someone far removed from the events. “Then I look for people to interview who can provide information about the events but are unlikely to be part of any suspected scheme,” she says.  “Finally, I interview the suspect or co-conspirators.”

Dervaes says that once he detected irregularities, he had to understand the attributes of the fraud scheme and who was responsible for various aspects of the underlying transactions. “Testing for these attributes will narrow the field of potential employees who might be involved,” he says. “Your investigation might indicate that only one individual could have committed the fraud without detection by supervisors or managers. And, if the individual is a supervisor and a trusted employee, the primary reason that a fraud could be committed over a long period of time without detection is that their work was not properly monitored by other managers. Every fraud report begins with two primary internal control weaknesses. The first one is that the individual does too much. The second one is that no one monitored their work in a way which would have detected the fraud,” Dervaes says.

Interview space

Where’s the best place to interview subjects? A room with no windows, two chairs and a table? The subject’s office or home? A restaurant or other public space?

“I always conduct interviews in the subject’s space,” Humphreys says. “I want them to be comfortable and in their element. I don’t need to intimidate. My interviewees are not compelled to talk to me, so I like to meet them at their house or office.”

Mohr says she prefers to interview subjects in their offices because she learns more about them in their own environments. “Do they have pictures of their kids that you can use to develop rapport?” she asks. “Memorabilia from playing basketball for a particular college? Or do they have a picture of their new RV and boat that might suggest they’re living above their means? You don’t have any of this information when you interview them in a neutral setting.”

Hubbs believes that interviewers’ safety could be compromised if they conduct interviews in subjects’ offices or workplaces. “Desk drawers, backpacks, briefcases or purses could conceal weapons,” he says.

“In one of my earlier interviews,” Hubbs says, “an employee was asked by HR to pack up his stuff and go home until the investigation was complete. Before the HR staff person finished the sentence, the employee stood up and stormed out of the interview room. I got up and followed right behind the employee and entered his office right as his hand was reaching into a camouflaged backpack,” he says.

The best-planned interviews always take twists and turns, and you better be prepared to abruptly change course and style to get the information you’re seeking."

A conference room with two doors is McHard’s ideal venue. “That way I can let the interviewee sit closest to the door, and I still have an exit I can use for my safety. I set up a conference table so that the interviewee and I are on the same side of the table so that I can see them head to foot to detect any movements that might indicate stress responses,” she says.

“I go first into the conference room, let the interviewee follow and ask them to close the door. That way they know the door is unlocked and they can leave anytime they like,” McHard says.

Dervaes also says his interviewing place of choice is a conference room but preferably with no distracting windows. “I ensured that the interviewee was seated in a chair nearest the closed but unlocked door to the room,” he says. “This way ‘custody’ wasn’t inadvertently created, and Miranda Warnings weren’t required. The employee is free to leave the interview at any time. As a result, I never administered Miranda Warnings to employees at the beginning of the interviews I conducted.”

Brawley, the mortgage fraud examiner, says she doesn’t have the luxury of using interview rooms. “Our interviews are typically unannounced so I have to adjust to the environment,” she says. “It can work to the interviewer’s advantage because often the interviewee’s office has photos or memorabilia, and you can gain rapport by asking about their hobbies, pets, etc. It’s also fun to hear a person’s reaction when the receptionist presents the interviewee with my business card. Once, we heard screams from a back room when an attorney found out we were there!” Brawley says. 

Devising questions, establishing rapport

Most interviews consist of all or some of five types of questions: introductory, informational, assessment, closing and admission-seeking. These CFEs have different takes on how to write and use those questions.

Regent Emeritus Tiffany Couch, CFE, principal of Acuity Forensics, says she’s a huge believer, when possible, of informally asking the introductory questions to potential interview subjects outside the interview room. “The more time I can spend observing, getting to know people in the office, examining documents, etc., the more successful I am going to be at putting people at ease and getting them to come in and talk to me,” she says.

Regent Nancy Rich, CFE, a supervisory special agent for the Naval Criminal Investigative Service, says introductory questions are the easiest to write and ask. “This is a great way to develop rapport with your subject,” she says. “Let them talk and be interested in what they are saying. Once you get them to start talking usually they will keep talking. Try to find common interests to talk about. Remember — you are there to listen to them and not do all the talking. Silence on the interviewer’s part is important.”

So, let’s talk about building rapport. Kelly Paxton, CFE, an investigator and a “pink-collar fraud” expert, works to put her subjects at ease. “I don’t give my official title but, of course, they’ve probably discovered what it is on the web before they come into the room,” she says. “If the subject is nervous it’s good to get them calmed down by throwing some softballs. I always let them ask me questions, and I’ll answer as many as I can.”

Rabon says he emphasizes the six elements of the “phatic phases of communication”:

1. Smile.
2. Shake their hand (this might not be appropriate in certain cultures).
3. Call them by name.
4. Introduce yourself.
5. Thank them for talking with you.
6. Find a point of commonality.

“At first blush, these actions might seem to some to be trite, simple and producing no significant returns,” Rabon says. “But they aren’t and they do. For example, shaking hands with the individual can facilitate rapport-building in a brief period of time that would take four hours utilizing solely verbal and vocal interpersonal communication.

“Also, within a training setting, getting participants comfortable with incorporating these six elements in the opening moments of an interview is no small undertaking and takes a goodly amount of practical exercises with direct and immediate feedback,” Rabon says.

Couch says she tries to put herself in the subjects’ shoes. “How would it feel if I were them right now?” she asks. “From there, it’s quite easy to say things like ‘Thank you for your time’ or ‘I know how busy you likely are and having an ‘auditor’ in here like me is never any fun.’ Or ‘my name is Tiffany, and I’m an accountant working here, and I really appreciate you coming in to help me.’ ”

Couch says her goal is to never use the word “interview.”

“Think about it,” she says. “What feelings does the word ‘interview’ conjure up inside of you? Nervousness? Skepticism? Sweaty Palms? My goal is to get to know people outside of the interview, ask them at an opportune time whether I can reach out to them if I need ‘help,’ and then obtain their business card.

“From there, I will email them and set up a time for them to ‘come in and talk with me’ or ‘come in and help me.’ That way, we’re setting up the meeting on their time schedule and allowing for them to leave their desk and come back to talk to me without anyone knowing that’s where they’re headed,” Couch says.

Hubbs says he focuses on three main themes when establishing rapport: expectations, need for assistance and ego. “The first is echoing the ethics culture, policies and procedures of the organization,” he says. “I remind the individual that their organization expects employees to do the right thing, cooperate with inquiries and tell the truth. Second, most individuals want to be helpful, and the interviewer asking for assistance can go a long way in helping to get cooperation.

“Third, every person likes to hear compliments, even from strangers,” Hubbs says. “Commenting on the expertise and responsibilities of the interviewee or relaying to them that management sees them as a subject matter expert in their area can go a long way to helping them feel at ease and also be more willing to share information and knowledge.”

In the July/August issue we delve into the meat of the interview: how to ask information, assessment, closing and admission-seeking questions. Also, eliciting unexpected gems of information, words to avoid, taking notes, reacting to subjects’ resistance and more. — ed.

Dick Carozza, CFE, is editor-in-chief of Fraud Magazine. His email address is: dcarozza@ACFE.com.