When a fraud case is uncovered, it can damage a company’s reputation and finances. It can also expose weaknesses in the organization’s risk management that it needs to address. The Association of Certified Fraud Examiners estimates that companies lose five per cent of their revenues to fraudulent schemes each year. Therefore, it’s important to conduct a thorough investigation.
It’s crucial to document the fraud investigation process. Thorough documentation provides a clear audit trail and strengthens accountability in legal proceedings or disciplinary actions. It’s also critical to maintain confidentiality throughout the investigation by limiting information access, conducting interviews discreetly and securely and ensuring physical evidence is secure.
The fraud investigator must have a keen understanding of the laws of evidence to ensure that all relevant information is gathered and analyzed correctly. Inconsistencies and discrepancies in statements are often indicators of deception. Circumstantial evidence, which excludes all plausible innocent explanations, is generally sufficient for a conviction in most courts.
A thorough background and asset investigation is conducted to identify the responsible parties and their financial holdings. This includes checking bank accounts, investments and business assets to identify ill-gotten gains that can be used in settlement outcomes, restitution requests and post-judgment collection.
If it’s determined that a fraudulent scheme has occurred, the fraud investigator must determine if there is sufficient evidence to pursue criminal or civil action. A criminal case requires a high burden of proof and is typically based on a unanimous jury verdict, while a civil case is usually settled through a preponderance of the evidence.
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