Revealing financial fraud through a blend of investigative interviewing and digital forensics

investigation methods

Revealing financial fraud through a blend of investigative interviewing and digital forensics

investigation methodsBehind the façade of a successful company, there’s sometimes a hidden story of financial fraud. This can include things like tampering with financial statements, having ghost employees on the payroll, or using complex tricks in sales. All of this can lead to big financial losses, a damaged reputation, and lost trust from customers and shareholders.

Fraud in a company is usually done by people who use tricky plans to hide what they’re doing. They exploit system loopholes, manipulate or hide critical information, and may even collude with their colleagues.

The complexity of fraud schemes makes it difficult for companies to identify the culprits and quantify the losses incurred

Sometimes, the first signs of fraud come from internal audits or reports from people inside the company who’ve noticed something suspicious by whistleblowing . When this happens, it’s important to investigate further.

In cases where a deeper investigation is needed, it’s a good idea to get help from an outside expert. They bring a fresh perspective, know-how, and experience, plus they can avoid conflicts of interest, making them a great choice for organizations.

The art of investigation

In some cases, starting with interviews is a smart way to begin an investigation. This helps narrow down what you need to look into and get important information early on. 

These interviews can involve talking to different people, like whistleblowers, witnesses, or victims, who know about the situation.

Being good at interviews is all about having the right skills. This includes knowing how to ask questions, persuading people to talk, carefully looking at documents, understanding the law, knowing about industry practices, and being able to analyze data and information.

Being well-prepared is also key to a successful investigation. Investigators need to study the company’s rules and practices, figure out what’s normal and what’s not, understand the background of the case, and learn about the people who might be involved.

Furthermore, investigators must collect and review information and documents from various sources to strengthen their case, a process that becomes especially critical in financial fraud cases that frequently entail unique challenges. 

One primary concern is the deliberate removal of documentary evidence from desktops and laptops, whether before or after internal audits, encompassing the deletion of email correspondence and vital data. To address these challenges, investigators must possess digital forensic skills. 

Digging for digital footprints

As technology advances, people who commit financial fraud get better at covering their tracks. However, a famous forensic scientist, Edmond Locard, said, “No crime is perfect”.

Digging for digital evidence using digital forensic methods is a step that can be taken either after investigative interviews or in parallel. Combining these two methods can be an effective strategy for uncovering fraud.

By allowing both to run simultaneously, investigators can maximize their chances of obtaining comprehensive and thorough information, leading to the identification of perpetrators and the substantiation of fraud.

In one case, for example, digital forensics successfully traced evidence of correspondence in emails, recovered deleted financial record files, and exposed forged documents.

The synergy between these two methods creates a comprehensive framework for uncovering hidden aspects and unraveling increasingly sophisticated fraud schemes.


Image by DCStudio on Freepik

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