Interviews in Fraud Investigations: Asking the Right Questions the Right Way

January 2012

IN THIS ISSUE

— Knowing Where to Go Before You Get There: Researching Before an Interview
— Getting Down to the Details: Conducting Informational and Admission-Seeking Interviews

GREETINGS!

Welcome to the January edition of our newsletter! In this issue, we’ll examine how a carefully prepared and conducted interview can bolster a fraud investigation, while less than careful treatment of an interview subject can become a major obstacle.

KNOWING WHERE TO GO BEFORE YOU GET THERE: RESEARCHING BEFORE AN INTERVIEW

Copious amounts have been written on the art of conducting an interview, especially an admission-seeking interview in person, to look for indicators of guilt in a fraudster’s behavior: changes in vocal tone, verbal tics and cues from body language. Yet equally as important as the conduct of the interview is what happens beforehand. Whether the purpose of the interview is to gather information (from a co-worker of a subject, for instance, to learn about the subject’s daily routines) or an admission from the subject himself, the research conducted prior to an interview is essential.

Although some interviews are conducted for due diligence purposes that don’t involve internal employee matters, many interviews are conducted as part of an internal inquiry that will also involve company records, such as e-mails, telephone logs and access logs. In either case, it is important to assemble a thorough portrait of the relevant subjects, using both publicly available records and any privately-held information, if appropriate. By developing a thorough picture of the subject”s financial condition, educational and employment background, criminal and marital histories, an interviewer can enter the interview well-armed to know what he doesn’t know, and to use what he does know to elicit the needed information.

GETTING DOWN TO THE DETAILS: CONDUCTING INFORMATIONAL AND ADMISSION-SEEKING INTERVIEWS

Although television shows have often portrayed interviews — especially those by law enforcement — as exercises in an interviewer’s persistence leading a subject to confess under the weight of the evidence — and the interviewer’s own persona — there are proper and improper ways to conduct an interview. Even though admission-seeking interviews may seem to have an inherently combative nature to them, most subjects respond to a respectful yet confident tone. Several supposed “financiers” whose careers have been alleged to be Ponzi schemes in recent years, including Bernard Madoff and R. Allen Stanford, have complained of harsh treatment while in prison awaiting trial — with Stanford going so far as to say that a 2009 beating by inmates had “wiped clean” his memory of the frauds he had committed, leaving the judge to deem him unfit to stand trial and leaving the process of prosecuting his $300 million fraud in some doubt.

Proper protections must be afforded to interviewees even during incarceration, not necessarily to protect their civil liberties as much as to protect the integrity and usefulness of the information they may have. Skilfully crafted and properly conducted interviews can be an essential tool for a fraud examiner, and can ultimately solidify a case built upon a wide array of evidence.