Georgia Private Investigators | Fraud Examiners | Astinel Security & Forensics – Atlanta, GA
Reacting to Fraud – Let the Party Begin
So you’ve discovered fraud, now what? For the small business owner, most first call their attorney, CPA, a business associate or perhaps the police. The advice you get can vary. The action taken can over complicate matters, including sending legal and professional fees into the stratosphere, voiding an otherwise successful criminal prosecution and impeding civil recovery. Let’s examine a few of the parties who may be involved.
Not all are created equal. They have different specialties, and from a tactical perspective, may recommend a course of action which prevents an optimum outcome. Results may include: the fraudster fails to cooperate, retains an attorney, destroys evidence, hides assets, skips town or files a frivolous civil lawsuit against you! Depending on the size of your loss, you may have two or more attorneys involved.
Generally good to deal with, but they can fairly or unfairly become a pariah in a fraud case. Anger may set in as your long-time CPA failed to detect the fraud in your annual review (an article for another time). Your attorney may suggest they be named in a civil suit. Your CPA may refer you to law enforcement or to your attorney. Perhaps they know a forensic accountant, a great resource. Enter another party into the mix.
Law Enforcement / Prosecuting Attorneys –
Law enforcement officers do a fine job, but their resources are limited and zeal for your case can be a fantasy. The system runs slow. Large jurisdictions have heavy case loads and too few detectives. Let’s assume you confronted the employee who admits wrongdoing. The employee agrees to pay the money back. Maybe they return a portion of their ill-gotten gains? In some cases, a prosecutor may not pursue a criminal case at all because of a perceived civil arrangement. Surprise, the employee never pays you back. Now you scramble for some remedy and criminal justice is not one of them.
Private Investigators –
Like attorneys, they have differing skills. They can greatly aid in your criminal prosecution, civil recovery efforts, work with law enforcement, your attorney, and be a total game changer…or not. A private investigative agency may over-promise, not produce, and all the while the meter is running (see attorneys above).
Insurance Agencies –
Thankfully you have crime insurance in your business policy – not so fast. Like any other insurance claim, it needs to be “investigated”. The insurance carrier will likely first require a forensic audit. Your time and total cooperation is demanded. If you previously elected not to involve law enforcement, most claims will be denied or delayed until you do so. In fact, any microscopic failure of the policy-holder negates your efforts. Here is another potential litigant your attorney adds to a growing list.
Let’s say you’re a seasoned business owner and you’ve seen this movie before. Or, maybe this is your first rodeo. Either way and for a legion of reasons, you elect to handle the incident yourself or keep involvement to a minimum. The results can range from relative success to total catastrophe.
An alternative is engaging a Certified Fraud Examiner (CFE) early in the process. CFE’s can work jointly with necessary parties, help to preserve and collect evidence and in most cases act as a quasi or real private investigator. This reduces the number of involved parties and may reduce your overall costs.
Fraud and dealing with the aftermath is ugly and painful. Having a detailed fraud response plan in place is crucial. A real out of the box thought – have a Fraud Risk Assessment completed. Then perhaps you can avoid the party altogether?
Zane Kinney, CFE