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By: Marc Stephen Raspanti , Douglas K. Rosenblum
Unfortunately fraud, waste, abuse, and of course, criminal activity do not take a vacation during a pandemic. In fact, targets and methods of fraudsters can and will evolve much like a virus. When the normal checks and balances that have been put in place by compliance, general counsel, security, internal audit, and other mechanisms that keep Corporate America safe are shuttered at home, criminal activity will increase. Obviously, with travel bans and advisories – domestically and abroad – traditional investigations using standard time-honored interviewing techniques cannot proceed. However, there are a number of things that can be done to preserve the investigative trail until robust measures can be put back in place to conduct an appropriate investigation.
Modified Procedures
Most defalcations can be detected through the normal means of analysis of emails, text messages, and electronic signatures. It is important to be in touch with your clients’ IT departments and internal audit staff to be able to preserve evidence until such time as in-person investigation can occur. There are a number of other things than can be done remotely to determine whether or not problematic anomalies are occurring or have occurred. Things that may be secondary in the normal investigative check list now become primary. Electronic communications, swipe-in logs and surveillance videos need to be reviewed and preserved. Phone interviews are certainly better than no interview at all, but utilizing video conferencing of witnesses who may have relevant information is the preferred method to assess affect, attitude, and potential deception of a witness.
Subjects of Investigation
There is a critical distinction to observe in conducting an investigation in the midst of a pandemic. Wrongdoers thrive both on the underlying medical crisis, as well as the vulnerabilities created by the reaction to the medical crisis. Beginning with the medical crisis itself, creative fraudsters will sell fake vaccines, remedies, and attempt to swindle naïve and generous people into donating to fake charities. In recent days, United States Attorneys, the FBI, the U.S. Secret Service, and States’ Attorneys General from across the nation have warned the public that they are increasing their vigilance in this area. Law enforcement realizes that with crises come those who wish to take advantage. They will use all tools in their legal tool bag to hold fraudsters accountable – that includes not only criminal charges, but also civil actions under consumer protection laws and false claims acts.
Even more prevalent will be scammers preying on the lack of well honed procedural safeguards during a time of crisis. Internal controls are more difficult to maintain when a large percentage of our population is working remotely, distracted or not working at all. For example, perhaps a company routinely requires two managers to authorize expenditures over a certain monetary threshold, but no one is around to sign off. Perhaps a corporation that normally requires employees in their accounting department to take a week of vacation at a time can no longer afford to do so. One employee may be left to control all entries into the company’s ledgers for months on end. These situations and many others are ripe for exploitation by the unscrupulous.
Stay Strong In Tough Times
Critical to surviving business interruptions and would-be criminals during a pandemic are creativity and a heightened sense of vigilance. Investigators must think outside the box and use all available tools to access data until such time as on-the-ground interviews and traditional investigation methods may resume. It is similarly important to maintain as many internal controls and protective procedures as possible even when a business, educational institution, accounting firm, law firm, medical facility, or financial firm is not operating on its regular schedule. Owners, operators, and their counsel must be ever mindful of the tactics of would-be fraudsters.
Pietragallo Gordon Alfano Bosick & Raspanti, LLP and its team of highly qualified and experienced attorneys continue to work around the clock during this pandemic to serve their clients. We remain available 24/7 from remote locations to assist in any crisis that might arise. We invite you to view our Internal Investigations team page for more information or to reach an attorney directly.