A Bit of Advice: Speak Up

GUEST BLOGGER

Christopher Ekimoff, CFE, CPA
Manager, Investigative Accounting & Financial Litigation, Duff & Phelps
Washington, D.C.

As a boisterous child, I never found it hard to speak up. Whether shouting out a response without raising my hand or sharing my thoughts during lunch with a friend a few tables away, speaking up got me noticed early on (and not always positively). That characteristic has transitioned into my career as well. I’m always the first to comment on the quality of the food I’ve ordered or the potential inefficiencies in a particular process.

The idea of “speaking up” has grown in the media and around the business world in recent years. In light of the 2008 financial crisis, more and more investors, Congressional committees and regulators have asked, “Why didn’t more people speak up?”

In the May/June issue of Fraud Magazine, Preet Bharara, U.S. Attorney for the Southern District of New York, and keynote speaker at the upcoming ACFE Global Fraud Conference in Las Vegas, Nev., outlines his focus on creating an environment that supports whistleblowing:

“First, there has to be a culture in which people who see something bad going on feel comfortable coming forward, and second, people who are taking in the complaints have to be smart enough and care enough to do something about it.”

In career terms, speaking up can be daunting. From reporting questionable behavior to inquiring about a specific task, fear of judgment by a superior can silence even the most confident individual. Often, however, the worry is twice as bad as the result. Speaking up to your superior about any number of issues can also work in your favor:

• Speaking up shares ideas – For any continually successful team, office or firm, sharing ideas and diverse viewpoints is necessary. By soliciting and valuing the opinions of all members, solutions come more easily and are more readily implemented.
• Speaking up differentiates you – A team member willing to share his or her ideas demonstrates confidence, a mastery of a certain set of tools and the ability to work collaboratively in a team setting.

Sure, we can’t all be famous whistleblowers. And being a whistleblower is hard. Harry Markopolos shared his take on Bernie Madoff with numerous government regulators, industry publications and media sources without being heard. Michael Woodford was fired as CEO of Olympus and shunned by his colleagues after reporting his concerns of improper write-offs to the Board of Directors. But, in time, their honesty and integrity erased any stigma that originated with speaking up.

Don’t be afraid to speak up. If you don’t, who will?

New E&Y Survey: 1 in 5 Employees in EMEIA Aware of Financial Manipulation in Last Year

AUTHOR’S POST

Mandy Moody, CFE
ACFE Social Media Specialist

Many surveys, numbers and stats make their way into my email every day, but a recent report left me speechless. Ernst & Young released the results of a fraud survey that found that one out of every five employees in EMEIA (Europe, Middle East, India and Africa) were aware of financial manipulation in their company in the last 12 months. Add to that, 57 percent believe bribery and corruption are widespread in their country.

For those of us in the anti-fraud profession these numbers may be shocking, but they aren’t surprising. We read and hear every hour about a new fraud perpetrated, caught or prevented. But, as the number of cases grow, so do the number of convictions, arrests and frauds thwarted.

Just as fraud isn’t isolated to a specific culture or country, neither is fraud prevention and detection. There is one aspect of the upcoming 24th Annual ACFE Global Fraud Conference that I am truly proud of. While it is being held in Las Vegas and many of the attendees are from North America, we also welcome anti-fraud professionals and speakers from more than 60 countries around the world.

For those of you coming to Las Vegas next month, here are a few events to look for if you are traveling from another country:

• The Opening Ceremony includes an impressive procession of flags for countries represented at this year's event. Each flag is carried by an attendee from that country.
• First-Ever International Attendee Reception: Held Sunday, June 23, 7- 9 p.m. in conjunction with the Welcome Reception, this inaugural reception gives you an exclusive opportunity to connect with other anti-fraud professionals from your region and beyond.
• Breakout sessions dedicated to addressing global fraud challenges.
• International Chapter Representative Meeting: Leaders from the international ACFE chapters are invited to a special gathering to exchange ideas on chapter development and growth, and review common goals shared by the ACFE.

Find more information and the full Conference Agenda at FraudConference.com.

The Banality of Fraud: Detecting Fraud from Even the Most Modest Employees

GUEST BLOGGER

Jeffrey Windham, J.D., CFE
Forensic Strategic Solutions
Birmingham, Ala.

When the loan manager of a locally-owned and operated Alabama bank left her job in May of 2012, none of her coworkers knew that within eight months, she would be found guilty of computer fraud and sentenced to six months in federal prison. However, she knew the mess that she was leaving behind.

The manager did not lead an extravagant lifestyle. A mother of two teenagers from a small Alabama suburb, she didn’t seem to have any of the outward signs of a potential fraudster. However, as our investigation progressed, we uncovered massive credit card debt—debt that she was paying off with fraudulent loans from her employer. 

According to our investigation, the employee fraudulently increased her home equity line of credit 69 times between Oct. 11, 2011 and April 27, 2012. She also increased her personal line of credit 11 times between Jan. 13, 2009 and Feb. 25, 2010. In total, she obtained $274,775 in unauthorized equity and credit line increases from the bank. As a trusted loan manager, the fraudster had access to reports that detailed all active loans, including her fraudulent loans. Therefore, she was able to alter the reports and thus conceal her illegal activity from her supervisor.

In spite of her intentional and ongoing scheme, the employee continued to make minimum monthly payments on her fraudulent loans. Of course, with every increase in credit, her minimum payment also increased until it was over $4,000 a month. After leaving in May 2012 to take a position at another local bank, the loan manager could not recall the amount of her minimum payment and had to call to receive the information.

Her high monthly payment astounded her former coworker who then took the alarming information to her supervisor.

Of course, this meant trouble for the fraudster. After reporting the fraud to the FBI, the bank chose to expedite the investigation process and hired our financial investigation consulting firm, Forensic Strategic Solutions. In this case, we were able to bring the evidence to authorities by November of 2012— just four months after the fraud was reported.

In March 2013, the inconspicuous former loan manager was sentenced to six months in federal prison for computer fraud and was ordered to pay $308,554 in restitution.

White-collar crime is not always obvious – especially when it is being committed by an employee who, by all accounts, appears to be a straight arrow. Due to one anomaly, a once-trusted employee - because of her financial woes and ill-conceived solutions - is now a convicted white-collar criminal and banned from ever returning to the banking profession per agreement with the FDIC.

Jeff Windham is an attorney and CFE with Forensic Strategic Solutions. Read his full bio. Forensic Strategic Solutions, Inc. is a national financial investigation firm that combines fraud examination with investigative financial consulting services in order to illustrate and present complex financial data in courts of law and other forums. For more information, visit Forensicstrategic.com.