The Mystery of the Eccentric Evangelist

GUEST BLOGGER

By Cora Bullock, Assistant Editor, Fraud Magazine

One of my favorite things about being part of the ACFE is the emails and discussions that fly around about the craziest fraudster news and headlines. One recent story in particular intrigued me. Aimee Semple McPherson was a preacher from the 1920s who left Canada to spread salvation throughout the U.S., finally settling in L.A., which was just teeming with sinners, according to her. I had never heard of her, but her story is incredible. I found a video of her online, preaching about Broadway being the "mecca of sin" (apparently sin stretched coast to coast). She's pretty, dramatic and waves her delicate hands around while bashing sin in the sweetest, most melodic voice, even breaking into song. So, of course, she made the perfect fraudster.

Sister Aimee was at the vanguard of the new technology of radio, and she was the first woman to preach on the airwaves (she ended up owning a station). She wrote plays, started two magazines, hired PR and media people, and her publicity stunts were legend. She would blast out sermons via megaphone from the back seat of her 1912 convertible, and burst into brothels and boxing rings to preach. She eventually opened the Angelus Temple in L.A., an elaborate, 5,000-seat megachurch where thousands went for her supposed healing powers. It featured a huge, lighted cross, so sinners could see it from miles away. The walkway between her house and the church had so many reporters hanging around, ready to report on her every move, that it became known as "newspaper alley." In San Diego, 30,000 attended one revival, which lasted five weeks and required the Marines and Army to help maintain order. She was a rock star at these revivals, dressed in a flowing white gown, speaking in tongues and imbuing the holy spirit into the crowd, supposedly healing the sick, giving sight to the blind. During broadcasts, she even told her radio listeners to place their hands on their radios so she could heal them.

And then one day in 1926, she just up and vanished while swimming. Her followers assumed she was dead and went into mourning, and newspapers reported her death on their front pages. "The Jungle" novelist Upton Sinclair wrote a poem commemorating her, titled "An Evangelist Drowns." One of her followers threw herself into the ocean and drowned, and one of the divers searching for her body died of exposure.

Five weeks later she appeared out of the desert in Agua Prieta, a Mexican town just on the other side of the border from Douglas, Ariz. She claimed she'd been kidnapped and tortured and barely managed to escape. But she was in good physical shape and her shoes weren't even dirty. Rumors spread that she had fled to Mexico with her married lover and concocted the whole story. The inconsistencies in her story caused a frenzy in the press, but two grand juries didn't indict her of perjury. In 1944, she ended up OD'ing on sleeping pills and sedatives.

Stories of such alleged fraudsters that I've never even heard of fascinate me. If you want to find out more stories like Aimee's, be sure to check out the traveling Fraud Museum exhibit at the 24^th Annual ACFE Global Fraud Conference, June 23-28, 2013, in Las Vegas.

The Fraud Examiner’s Role in Responding to Whistleblowing

INTERVIEW WITH IAN FOXLEY

Chairman of Whistleblowers UK and keynote speaker at the 2013 ACFE European Fraud Conference, 17-19 March in Prague

According to the ACFE’s Report to the Nations, more frauds are detected by tips than by any other method. What role do anti-fraud professionals play in ensuring tips are welcomed, encouraged and not punished?

Tips are only worthwhile if they are valid, verifiable and justified. Sources of tips should be aware that they may remain anonymous, but if they are to believed then the tip off cannot stand in isolation but must be provable – one way or another. Anti-fraud professionals have a role in ensuring that tips are valid and verifiable and sort out those that are worthy of note from those that aren’t. That way when a true tip is offered, the recipient, be it a company, organization, manager, director or compliance officer, knows that it is a worthwhile piece of information that is worth investigating.    

How have you seen the role of the whistleblower change over the past few years? Do you think this role will change in the future and become more accepted and praised?

The role of the whistleblower hasn’t changed – it still remains as a source of information that exposes wrongdoing in the face of resistance by those who should have dealt with the information properly.

There have been those who have tried to use whistleblowing to propagate personal aims or settle debts, and they do real whistleblowers a great disservice. But there remains a fundamental corporate distrust of whistleblowers that needs to be actively overcome. Whistleblowing needs to be recognized as a courageous and heroic act, not one born of disloyalty and self-interest. Whistleblowing is not the act of a “sneak.” It is the act of an honest broker who has tried to expose the wrongdoing and found only resistance, coercion and aggression.    

Reward is the wrong word to use – it offers the opportunity for detractors to profess that whistleblowers are merely “in it for the money.” But we do need to find a way to compensate whistleblowers for the stress, discomfort, family pain, financial loss, career stoppage and sheer hell of what we go through.

What do you most hope attendees will take away from your address?

An understanding of what makes a whistleblower tick and what they can do to help future whistlebowers.

Read more about Foxley and the other keynote speakers at this year’s ACFE European Fraud Conference. And don't forget, the last day to register early and save EUR 125 is this Friday, 15 February.

When Time is Money: Planning a Fraud Examination

GUEST BLOGGER

Mark Scott, J.D., CFE
ACFE Research Specialist

“It was late on a Friday afternoon when my office phone rang. Before I could say, ‘Hello,’ I realized I had a potential new client on the line. Without stopping to breathe, she rattled off who had referred her to me, that she believed she was the victim of a fraud (at the hands of her bookkeeper), and that she was SO upset and didn't know what to do or where to start. I told her to start by taking a deep breath. And then, I offered to come down to her office right away (there went my quiet Friday afternoon). When I arrived, she was in tears, her staff bewildered and no one seemed to know what to do next. After identifying the key issues, I quickly came up with a plan of action and then told her, ‘I'm truly sorry this has happened to you. It isn't fair. I can assure you that I can help.’"
- Tiffany Couch, CFE, CPA/CFF, Principal of Acuity Group PLLC

This situation described above conveys just a few of the issues, decisions and problems that small business owners, executives and CFEs may face in the first few hours after learning about a suspected fraud. To complicate matters further, when fraud allegations arise, response time is critical, and in most situations—including the above hypothetical—pressure and stress are high. How quickly and effectively you respond is vital, and decisions made within the first few hours can have a significant effect beyond actual fraud losses. Mishandling fraud-related issues can have severe consequences, including civil litigation, fines, and other unbudgeted expenses. It could also tarnish your company’s reputation.

Determining the initial response is a burdensome process on top of an already stressful ordeal, but one way to help reduce that burden is to put an organization in the best position to respond by creating a fraud response plan. A fraud response plan should include things such as:

• Protocols for reporting tips, allegations and other indicators of improper activity
• People who may be required to respond to particular types of fraud
• Factors to consider when deciding what steps, if any, are required to respond in an appropriate manner
• Procedures for notifying employees to suspend the destruction of potentially relevant records
• Principles for documenting incidents and corresponding responses
• Procedures for logging all fraud allegations and recording the corresponding response efforts

Having a fraud response plan in place will help you move quickly, manage response and create an environment to minimize any adverse impact. Additionally, a response plan will allow you to respond to suspected and detected incidents of fraud in a consistent and comprehensive manner, and it will send a message that you take fraud seriously.

Conversely, without a fraud response plan, you may not be able to address issues properly, and will likely expend more resources and suffer greater harm than those that have such plans in place.

Moreover, if you determine that a fraud allegation or issue will be investigated, those responsible must take steps to plan, initiate, coordinate, organize and otherwise manage the investigation. Failure to engage in such activities will create frustration and reduce the investigation’s chances of success, thereby potentially causing the organization to lose valuable time and money. 

We recently released an online self-study, Planning and Preparing for a Successful Fraud Examination, and are working to develop another online self-study, Managing and Organizing a Successful Fraud Examination, with the goal of helping fraud examiners deal with the strategic, organizational and managerial challenges they face when fraud incidents become known. These self-studies will give you the tools you need for success in these time-sensitive and stressful situations.

To find out more information about these self-studies, visit ACFE.com.