Fraud fighters power up at the 29th Annual ACFE Global Fraud Conference

Written by: ACFE Staff Emily Primeaux, CFE

Date: September 1, 2018

Read Time: 16 mins

Career and Professional Development

More than 3,000 anti-fraud professionals gather at the largest anti-fraud conference in the world to power up their knowledge, networks and careers.

What does the future look like for anti-fraud professionals? ACFE President and CEO Bruce Dorris, J.D., CFE, CPA, highlighted three trends that we can expect to see over the next few years and into the next decade at the 29th Annual ACFE Global Fraud Conference, June 18-22, in Las Vegas. The first was technology.

“The way in which we learn today is far different and much faster than ever before,” said Dorris. “I can vividly recall what this meant to me 25 years ago when I was in law school. I remember studying in a musty, old, dark library in Baton Rouge, Louisiana. I reviewed handwritten notes and books to study for my exams; two things that may seem archaic to us now. And when I worked in the financial industry years ago, you had to call into your broker to buy and sell a stock. Now, you can make a trade directly from your phone.”

Dorris focused on emerging technologies that represent both risks and opportunities in the fight against fraud. In particular, there’s been a remarkable surge in public interest and investment in virtual currencies such as bitcoin. Dorris explained that developments like these don’t just provide new opportunities for fraudsters. Governments and businesses around the world are moving to capitalize on the fraud-fighting potential of blockchain technology. It promises to help detect and prevent payment fraud, securities fraud, fraud in the supply chain and identity theft. Likewise, artificial intelligence and machine learning are rapidly becoming indispensable tools for detecting suspicious transactions, enhancing cybersecurity measures, and streamlining fraud examinations.

The second trend Dorris highlighted was data. “Data is becoming an increasingly valuable commodity for businesses and fraudsters alike, making information a priority in the fight against fraud,” he said. “While there are plenty of fraudsters casting wide nets for small pay-offs, many are changing tactics to leverage information into more targeted attacks with higher payoffs.”

Dorris told attendees that they have two roles to play with this data. They’re both the gatekeepers and the miners. “It will be up to you to remain vigilant in the protection of data and also the valuable use that this information provides,” he said.

Finally, Dorris highlighted the third trend: collaboration. “From fusion centers and cybertech accords to cooperative, formalized agreements between regulators, law enforcement and prosecutors, we have already seen the value that working together has in a battle where the enemy often seems one step ahead,” he said. “In fact, collaboration might be the reason why you are at this event. Whether you are here for the first or 20th time, you know that coming here will put you in contact with people from all over the world. ... Don’t be afraid to break down barriers of communication and information-sharing so that, together, we can become stronger.”

It’s collaboration that brought fraud fighters from around the world together in Las Vegas to power up their skills, networks and careers.

Comprehensive sessions boosted knowledge

Attendees had their pick of diverse anti-fraud topics from the Pre- and Post-Conference and the in-between Main Conference.

Three speakers led Pre-Conference sessions. Ryan Hubbs, CFE, CIA, CCEP, ACFE Regent and global anticorruption and fraud manager at Schlumberger, led “Investigating Shell Companies.” During the session, Hubbs said that while shell companies aren’t illegal, the anonymous shell company has become the premier vehicle of choice in combining both the concealment of the fraudulent act with the concealment of the wrongdoer’s identity. “To become proficient in investigating shell companies, you must dedicate time to recognizing red flags, understanding new schemes and identifying resources to help you on future cases,” said Hubbs. (Read more from his session at Fraud Conference News.)

Bethmara Kessler, CFE, consultant, advisor and ACFE faculty member, spoke on “Taking Fraud Risk Assessment to the Next Level,” and Jeremy Clopton, CFE, CPA, ACDA, CIDA, owner of What’s Your SQ, spoke on “Next Generation Fraud Examinations: Leveraging Emerging Tech and Advanced Analytics.”

During the Main Conference, attendees learned practical concepts at more than 70 educational sessions in 13 parallel tracks. Sessions ranged from Ethical Baselines and Fraud Risk Assessments: A Holistic Approach and Social Engineering: How Fraudsters Manipulate and Exploit Their Targets to Targeting the Proceeds of Political Corruption and Leading the Multigenerational Team.

Four excellent speakers taught three Post-Conference sessions. Jeffrey G. Matthews, CFE, CPA, partner, forensic and litigation services, Weaver, LLP, and Sherman McGrew, J.D., CFE, program analyst, Transportation Safety Administration (TSA), team-taught the “Auditing/Investigating Fraud Seminar.”

Eric R. Feldman, CFE, CIG, CCEP-I, senior vice president and managing director, corporate ethics and compliance programs, Affiliated Monitors, presented “Developing an Integrated Anti-Fraud, Compliance and Ethics Program.” Don Rabon, CFE, president, Successful Interviewing Techniques, presented “Interviewing in the 21st Century.”

Sir Rob Wainwright encourages ‘powering up’ information, intelligence sharing

Cressey Award recipient Sir Rob Wainwright, former director of Europol, believes Europe is losing the fight against dirty money, but it could make great strides if law enforcement and investigative sectors “power up their cooperation” in information sharing and intelligence across all borders. “In the last two years I’ve been exorcised by how we’ve failed to adequately deal with the flows of dirty money in our international financial system,” he said during his Monday Opening Session address.

“We’ve all had the right vision the last two or three decades,” he said. But for all the billions spent on fighting money laundering, Europe is seeing only a 1 percent annual return. “It’s no better in the United States. No better in Australia. The design is wrong in my opinion,” he said. “Instead of focusing the intelligence efforts on identifying the most likely offenders we base our system on voluminous high-end transaction monitoring. …

“So, we need to wake up the system and work together in order that the banks, and the regulators and the governments and legislatures, understand that the great vision we have isn’t working. We’ve designed this compliance system, and it’s become an end in itself. … The compliance regime is very powerful; I just think it needs to be used in a different way.”

Wainwright, who was recently awarded a Knighthood by the Queen in the Birthday Honours List for service to the U.K., explained that the convergence of criminal terrorism and cybercrime, which has also become an exceedingly urgent problem in the European Union, is shaped by three conditions:

Exploitation of technology.
Growing convergence of actors.
Increasing the ways it has become more cross-border and international.

Wainwright, who took the Europol helm in 2009, left the organization in June to become a senior cyber partner in Deloitte’s Amsterdam-based cybersecurity practice. “As I join the private sector, I seek a new challenge. I seek the opportunity to more directly help industries.”

Wainwright said that he knows the attendees “live and breathe the values” of effective information and intelligence sharing among law enforcement and investigative sectors. “I’m proud to be associated with the work that you do.”

Technology might finally cause the ‘great disruption’

Relax. If you’re a fraud examiner, machine learning probably won’t eliminate your job. Probably. “In terms of your own career, the best advice I can give is to avoid doing something that’s routine and repetitive; you want to be good at something that involves engaging other people or something that involves creativity,” said Martin Ford, the Monday lunch keynoter. Ford is a futurist and author of The New York Times best-seller “Rise of the Robots: Technology and the Threat of a Jobless Future.”

Ford says we could be on the leading edge of a massive disruption of global economies and societies — precipitated by technology — that could decimate jobs and increase fraud.

So, if you engage in say, interviewing subjects, there’s a good chance that no computer — hyped up on artificial intelligence (AI) — will replace you. But if you sit in front of a screen analyzing routine numbers, watch out.

Ford shared that new technology is increasing productivity but is probably stifling wage increases. Those who are losing their jobs because of technology might not be able to assume the new created jobs, regardless of available retraining. The current low unemployment rates might be indicative of people taking low-wage, low-status jobs and those who have given up looking for jobs that are comparable to those they lost. Conditions like this can breed fraud, Ford advised.

The inevitable solution, he said, might be for governments to explore some type of “universal basic income” so that economies won’t have large numbers of unemployables who can’t consume and sustain healthy economies. However, Ford said, even liberal Scandinavia is having trouble implementing that type of program.

“My purpose in coming here in talking to you and also writing about it is to get you engaged and hope that you will … really think about what kind of future we’re building. … A society and economy that works for everyone at every level rather than the few people at the very top.”

The upshot? We’ll see if Ford is right, and technology might finally usher in the Great Disruption. Fraud examiners: Keep your human-interacting, creative jobs.

Journalist speaks on exposing the ‘heist of a century’

Although she lives in London, Clare Rewcastle Brown knows all too much about Las Vegas, Nevada. She’s not a professional poker player or an Elvis impersonator aficionado — for the past few years she’s been reporting on the lavish parties thrown by a Malaysian financier using money earmarked for much-needed infrastructure in the southeastern Asian country.

In 2010, she began the Sarawak Report and Radio Free Sarawak to report on deforestation in the Sarawak region of Malaysia. While her initial intention was to expose corruption she saw on the local level, she followed the money all the way up to the then prime minister of Malaysia, Najib Razak. In her address to attendees during the Tuesday morning session, Brown highlighted her history with the city.

As she was investigating corruption and bribery, her focus shifted to 1Malaysia Development Berhad (1MDB), a Malaysian state fund that reportedly had garnered billions in investment. However, no development projects were to be seen. At the same time, one name kept popping up in party circuits in Las Vegas — Jho Low. Low was a financier tied closely to 1MDB and happened to be a close friend of Najib’s stepson, Riza.

“In 2014, there was already widespread suspicion in opposition circles [about where the money was going],” said Brown. She began publishing stories about the lavish, celebrity-filled parties Low was throwing in clubs and raising questions about where he was getting the money. “I kept catching them in the lies while they kept spending the money.”

She shared highlights of Low’s 30th birthday party: The Las Vegas-based bash took place in November 2012 and reportedly included guests ranging from actors Leonardo DiCaprio and Benicio del Toro to Kim Kardashian and Britney Spears. According to Brown, Low often showered his celebrity friends with lavish gifts and experiences. “[Low] would pay Leo $500,000 a time to come hang out with him in Vegas to play the tables,” explained Brown.

As Brown continued her reports on Low’s expenditures, she was also able to trace hundreds of millions transferred from 1MDB into Najib’s personal bank account. Shortly after, Najib fired his attorney general, who had begun investigating the money transfer, as well as a number of other high-ranking cabinet officers. “How did Najib get away with it? The answer lies in the over-centralization of power and lack of transparency,” said Brown. “It was a situation of unchecked power.”

In May, Najib was unseated in a historic election, in part due to Brown’s dogged reporting on what she called the “heist of a century.” “That was the power of reporting. We turned the tide,” she said. She also thanked attendees for their work in exposing fraud. “You and the global investigators who took up this scandal played a crucial role.”

Finding truth in the darkness: Filmmaker details discovering Russian doping scandal

Grigory Rodchenkov isn’t your typical whistleblower. In fact, some would even argue he shouldn’t be called one. He doesn’t fit the description of a sentinel and will most likely not be winning awards for his efforts like Michael Woodford at Olympus or Sherron Watkins at Enron. For years, he chose country over truth; self over truth; maybe even survival over truth. But, in the end, with the help of filmmaker and writer Bryan Fogel, he chose truth over all of those things and did something remarkable.

At the Tuesday morning session, Fogel shared a behind-the-scenes look at his Oscar-winning documentary thriller, “ICARUS: The True Story Behind the Russian Doping Scandal and Corruption.” Much like the fast pace of his film, he took attendees through the three-year-long journey of doping, investigation, interviewing, friendship and the exposition of a conspiracy that spanned more than 40 years.

But, ICARUS didn’t start out as a documentary about corruption within the Russian Olympic team. Fogel initially wanted to show how easy it was to get away with doping in professional sports. “I wasn’t surprised about Lance [Armstrong] and the other athletes who were doping,” Fogel said about the news that shattered the illusion of a cherished Tour de France winner. “What was surprising to me was that over 10 years and 500 drug tests, he passed them all. To this day, Lance has never tested positive.” Armstrong’s doping was uncovered through confessions from his fellow teammates, not failed drug tests.

Fogel said that the news of the widespread doping in cycling spurred an idea to show the world just how easy it was to not get caught. “I decided I wanted to prove that anti-doping is a fraud,” he said. But he didn’t just want to prove it through research or a third party; he wanted to discover it himself. He then had to find someone who would help him train for an amateur cycling race while mimicking Armstrong’s regimen and using performance-enhancing drugs.

The former director of the UCLA Olympic lab politely declined to help but did connect Fogel to Rodchenkov, who, at that time, was the director of the Russian Olympic lab in Moscow. Rodchenkov agreed to help Fogel cheat the system and allowed him to record their time together in person and via Skype. But the film didn’t go as Fogel had planned. After extreme pressure from both the World Anti-Doping Agency (WADA) and Russian officials, Rodchenkov became the No. 1 target for either dismissal, or worse, death.

After booking a ticket for Rodchenkov on his credit card in the middle of the night, Fogel began a journey far more dangerous than he ever thought possible. “I knew at that time, it wasn’t about a movie; it was about protecting someone’s life,” he said. Together, the two partners worked with The New York Times to expose a state-sponsored doping scheme that had been ongoing in Russia for decades — and that directly led to Russia’s ban from the 2018 Winter Olympics in South Korea.

Fogel helped Rodchenkov by assisting with legal counsel, immigration advice, coordination with the U.S. FBI, CIA, and DOJ and, ultimately, his political asylum.

While Rodchenkov sits in federal witness protection, lawmakers in Washington, D.C. are pushing for change in the way doping is punished. Three U.S. legislators introduced a bill in June, the Rodchenkov Anti-Doping Act, which would criminalize doping in global competitions.

Read more: A doping dichotomy, by Dick Carozza, CFE, Fraud Magazine, July/August 2018.

Crisis in the organization? Rebuild your culture with transparency

You know that catastrophe you thought might slam your organization? It happened. You got the dreaded phone call in the middle of the night from your lawyers, your compliance people or (horrors!) the media that (pick one or more): 1. Employees created millions of fraudulent savings and checking accounts on behalf of clients without their consent. 2. Management was bribing officials worldwide to win lucrative contracts. 3. Executives were caught in huge money-laundering and corruption crimes.

During the Tuesday working lunch, Katherine McLane, crisis communications, reputation management expert and founder of the Mach 1 Group, moderated a panel of managers who faced these actual serious predicaments. McLane was vice president for communications and external affairs for the LIVESTRONG Foundation during the years when its founder, Lance Armstrong, admitted to doping charges. Among other positions, she was deputy communications director and deputy press secretary for California Gov. Arnold Schwarzenegger and press secretary for the U.S. Department of Education under then Secretary Margaret Spellings.

Theresa LaPlaca, who was hired as the new executive vice president and head of Wells Fargo’s conduct management office to help begin company reconstruction, says the company has been working to move employees from separated “silos”— who had no idea what others were doing in other departments — to coordinated, collaborative enterprises.

“Changing the culture is a challenge,” LaPlaca said. “It’s really important to me how our team members think about our ethics, our values. … We want our team members to speak up. How are you feeling? How are you being treated? … People are raising their hands. That is success for me,” she said. “Wells Fargo is really committed to rebuilding the trust of our customers, our shareholders, our team members.”

“It took Siemens 160 years to build its reputation and five minutes to ruin it. And it will take some years to rebuild that trust in the marketplace,” said Andreas Pohlmann, a founding partner of Pohlmann & Company. Siemens called Pohlmann in after the scandal to be the chief compliance officer and manage the creation of the company’s compliance and corporate governance system.

“The tone at the top was decisive,” Pohlmann said. “We had to immediately and openly communicate [to the executives], ‘guys it’s over!’ We had to rebuild trust and credibility in the organization.”

LaPlaca said tone at the top also has to affect the measurement of the “mood in the middle. … We ought to be doing those culture surveys. Focus groups and understanding what’s going on way down deep in the trenches to understand what you want.”

“It was key to be very transparent to the outside world … to regain trust in the marketplace,” Pohlmann said. “We were very open and stood up and attended conferences like this … to talk about the root causes of our mistakes and how to build back up our reputation.”

McLane said companies naturally want to withdraw when things go wrong. “They want to stay within their walls and not talk about it until everything is great,” she said. “You don’t have to say everything, but you have to say something. It has to be meaningful and sincere and come from the right person.”

At the end of the panel discussion, all participants circled back to the principle that all organizations in crisis must inculcate cultures of transparency from the top to the bottom. If you don’t, you’ll be receiving more of those dreaded calls in the middle of the night.