1) Final Project Part I Milestones2) Final Project Part II Milestones
1) Final Project Part I Milestones 2) Final Project Part II Milestones
ACC 692 Final Project Part II Guidelines and Rubric Overview Final Project Part II is the creation of a presentation. You will randomly be placed in a pair and assigned a specific case study to analyze for yo ur final presentation. One case will be assigned to you and your partner from the following list: Case A: Fry’s Electronics – Ausaf Umar Siddiqui; Fry’ s Exec Accused of $65 Million Fraud t o Pay Off Gambling Debts Case B: PBS&J Corp – William DeLoach; Check Fraud in Miami Case C: Koss Corp – Sujata “Sue” Sachdeva; Former Koss Corporation Executive Charged in $31 Million Dollar Fraud Case D: Sandhog’s Union Local 14 7 – Melissa King: Former Sandhogs Union Benefit Funds Administrator Sentenced In Manhattan Federal Court To Six Years In Prison For Embezzlement And Tax Crimes Note that while you will conduct an interview with your partner, you will create the final presentation individually . The final product represents an authentic demonstration of competency because you will prepare a visually appealing, informative, and professional presentation summarizing the fraud that occurred, listing preparations for the interviews, and structuring the interviews for both a witness (for information gathering) and a fraud suspect (to obt ain an admission of guilt). In the final portion of the presentation, you will present your report of the investigation to th e company. The objective is to successfully resolve a case of occupational fraud through the use of interview and interrogation tec hniques, working within social, legal, and ethical restraints. The project is divided into two milestones , which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Six and Eight. Final Project Part II will be submitted in Module Ten. In this assign ment, you will demonstrate your mastery of the following course outcomes: • Apply theoretical models of fraudulent behavior for determining why organizational fraud occurs • Assess the ethical responsibilities of fraud investigators to internal and external stakeholders in communicating and reporting results of investigations • Evaluate the use of various types of interview and interrogation questions and techniques related to fraud for selecting the best approach • Synthesize a sequence of interview and interrog ation techniques to gather information needed for completing a fraud investigation Prompt Prepare a visually appealing, informative, and professional presentation using PowerPoint, Prezi, Present -It, or a similar software platform, of your assigned case summarizing the fraud that occurred, listing preparations for the interviews, and structuring the interviews for both a witnes s (for information gathering) and a fraud suspect (to obtain an admission of guilt). In the final portion of the presentation, pres ent your report of the investigation to the company. Specifically, the following critical elements must be addressed: I. Background : In what setting did the fraud occur? What type of fraud occurred? How was it discovered? II. Fraud Scheme A. Describe the fraud sc heme and how frauds of this type are carried out. Provide examples of internal control weaknesses th at allowed this fraud to occur. B. What were the red flags that signaled the fraud? Why was each red flag significant? III. Evidence/ Documentation A. What evidence is needed to prove the fraud? How will this evi dence be used in the interview? B. What documentation would you collect to prove the fraud? How will this document ation be used in the interview? IV. Interview – Witness A. Who would you interview to gather in formation needed in the investigation? How could you determine the importance of the informa tion the witness could provide? B. What information would you obtain? What types of questions or approach would best be utili zed to obtain this information? C. Structure your interview questions for your witness to obtain the relevant information and ensure they are in a logical order and fashion. V. Interview – Suspect A. Explain the approach you would take with the suspect. Why would this be the most eff ective or appropriate approach? B. What types of questions would you use with the suspect? Why? C. Structure a set of interview questions to be used to develop rapport and obtain an admission of guilt from the suspect. VI. Communication A. Prepare a fraud investigator’s report of investigation communicating results of the investigation to management. You should mention who the guilty party or parties are and how you deduced th eir guilt and in volvement in the investigation. B. Discuss the fraud investigator’s responsibilities in communicating the fraud to external stakeholders, such a s federal or state prosecutors. Milestones Part II Milestone One : Background and Fraud Scheme (Sec tions I and II) In Module Six , you will submit a written report containing the background of the fraud (setting, type of fraud, discovery, etc.) as well a s the fraud scheme of you and your partner’s assigned case. This milestone will be graded with the Mil estone One Part II Rubric. Part II Milestone Two : Evidence and Interviews (Sections III, IV, and V) In Module Eight , you will submit the analyzed evidence and documentation as related to you and your partner’s assigned case. You will also d iscuss your ap proach to interviewing both a witness and a suspect in the case. This milestone will be graded with the Milestone Two Part II Rubric. Part II Final Submission: Presentation In Module Ten , you will submit your final presentation. It should be a complete, polished artifact containing all of the critical elements of the final product, as well as Section IV (Communication). It should reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Part II Rubric. Final Project Part II Rubric Guidelines for Submission: Your p resentation (PowerPoint, Prezi, Present -It, or other software ) should be 10 –12 slides, excluding title page and r eference slide. Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Background Meets “Proficient” criteria and description is exceptionally clear and contextualized Describes the setting in which the fraud occurred, the type of fraud, and how it was discovered Describes the setting in which the fraud occurred, the type of fraud, and how it was discovered , but description is cursory or contains inaccuracies Does not describe setting in which the fraud o ccurred, the type of fraud, and how it was discovered 7.5 Fraud Scheme: Fraud Scheme Meets “Proficient” criteria and offers keen insight into the relationship between fraud types and internal control weaknesses Describes the fraud scheme and how frauds of this type are carried out and provides examples of internal control weaknesses that allow the fraud to occur Describes the fraud scheme and how frauds of this type are carried out but does not provide examples of internal control weaknesses that allow the fraud to occur , or description is cursory or contains inaccuracies Does not describe the fraud scheme and how frauds of this type are carried out 7.5 Fraud Scheme: Red Flags Meets “Proficient” criteria and cites specific, relevant examples to substantiate claims Discusses the red flags that signaled the fraud and why each red flag was significant Discusses the red flags that signaled the fraud but does not discuss why each red flag is significant , or discussion is cursory or contains inaccuracies Does not discuss the red flags that signaled the fraud 7.5 Evidence / Documentation: Evidence Meets “Proficient” criteria and demonstrates a nuanced understanding of the relevance of evidence in an interview Explains what evidence is needed to prove the fraud and how the evidence will be used in the interview Explains what evidence is need ed to prove the fraud but does not explain how the evidence will be used in the interview , or explanation is cursory or contains inaccuracies Does not explain what evidence is needed to prove the fraud 7.5 Evidence / Documentation: Documentation Meets “Proficient” criteria and demonstrates a nuanced understanding of the relevance of documentation in an interview Explains what documentation would be collected to prove the fraud and how the documentation will be used in the interview Explains what documentation would be collected to prove the fraud but does not explain how the documentation will be used in the interview , or explanation is cursory or contains inaccuracies Does not explain what documentation would be collected to prove t he fraud 7.5 Interview – Witness: Who Meets “Proficient” criteria and determination is well supported and logical Determines who would be interviewed to gather information for the investigation and the importance of the information the witness could prov ide Determines who would be interviewed to gather information for the investigation but does not determine the importance of the information the witness could provide , or determination is illogical Does not determine who would be interviewed to gather info rmation for the investigation 7.5 Interview – Witness: Information Meets “Proficient” criteria and cites scholarly research that is aligned with the suggested approach Explains what information would be obtained and the types of questions or approach that would be best utilized to obtain the information Explains what information would be obtained and the types of questions or approach that would be best utilized to obtain the information , but explanation is cursory or contains inaccuracies Does not explain what information would be obtained 7.5 Interview – Witness: Witness Meets “Proficient” criteria and interview is structured in a “introductory, informational, closing” manner Structure s interview questions for the witness to obtain the relevant information and ensures they are in a logical order and fashion Structures interview questions for the witness to obtain the relevant information , but questions are not in a logical order or fash ion Does not structure interview questions for the witness to obtain the relevant information 7.5 Interview – Suspect: Approach Meets “Proficient” criteria and gives specific examples to illustrate why the approach is best Explains the approach you would take with the suspect and defends why it would be the most effective or appropriate approach Explains the approach you would take with the suspect but does not defend why it would be the most effective or appropriate approac h, or defense is illogical Does not explain the approach you would take with the suspect 7.5 Interview – Suspect: Types of Questions Meets “Proficient” criteria and provides examples of suspect responses or behavior that would indicate deception Explains the types of questions you would use with the suspect and supports rationale Explains the types of questions you would use with the suspect but does not support rationale , or support is illogical Does not explain the types of questions you would u se with the suspect 7.5 Interview – Suspect: Rapport and Admission of Guilt Meets “Proficient” criteria and interview questions are structured in a logical order Structures a set of interview questions to effectively develop rapport and obtain an admission of guilt Structures a set of interview questions to develop rapport and obtain an admission of guilt but questions are not constructed effectively to achieve intended goals Does not structure a set of interview questions for the suspect 7.5 Communication: Results of the Investigation Meets “Proficient” criteria and discusses how management will use the results Prepares a fraud investigator’s report of investigation to communicate the results of the investigation to management Prepares a frau d investigator’s report of investigation to communicate the results of the investigation to management , but report is cursory or contains inaccuracies Does not prepare a fraud investigator’s report of investigation 7.5 Communication: Fraud Investigator’s Responsibilities Meets “Proficient” criteria and provides examples of how stakeholders will use the information Discusses the fraud investigator’s responsibilities in communicating the fraud to external stakeholders Discusses the fraud investigator’s resp onsibilities in communicating the fraud to external stakeholders , but discussion is cursory or contains inaccuracies Does not discuss the fraud investigator’s responsibilities in communicating the fraud to external stakeholders 7.5 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy -to- read format Submission has no major errors related to citations, grammar, spelling, synta x, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax , or organization that prevent understanding of ideas 2.5 Total 100%
1) Final Project Part I Milestones 2) Final Project Part II Milestones
IN THIS ARTICLE Maria GarciaPerson – Sep 29, 2006 Updated Sep 29, 2006, 5:45pm EDT Scott Deloach, former chief financial officer of PBSJ Corp., and two other former workers pleaded guilty to charges they engaged in a long-term scheme to embezzle more than $35 million from PBSJ. Deloach pleaded guilty to a separate count to charges of unlawfully reimbursing $11,000 in federal campaign contributions to the Mel Martinez Senate campaign. Deloach; Maria Garcia, who held various positions in the company’s finance department; and Rosario Licata, a supervisor and manager in the accounts payable department, were accused of embezzling money from 1992 to March 2005, when PBSJ was headquartered in Miami, according to a release from U.S. Attorney’s Office for the Southern District of Florida. The company, an employee-owned national engineering and construction firm, recently relocated its headquarters to Tampa. It has said it is in the process of restating financial results for 2002, 2003 and 2004, as the result of accounting irregularities. According to the release, Licata issued millions of dollars in unauthorized checks from the PBSJ master cash disbursement to Deloach, who deposited the checks in personal bank accounts at different area banks. Deloach split a portion of the proceeds with Garcia, the release said. Federal authorities said the three funded lavish lifestyles through the fraud. Deloach owned several valuable properties, including a multi-million dollar home in Aventura, real estate in the Florida Keys, luxury sports automobiles and a yacht. Garcia used the stolen money to buy several luxury sports cars, expensive jewelry and Rolex watches, and an ownership interest in a local restaurant, the release said. Licata used her share of the stolen funds to purchase real estate in Florida and Nicaragua, so as to engage in high-dollar gambling activities, according to the release. RECOMMENDED RESIDENTIAL REAL ESTATE Bucks coach Budenholzer’s former Fox Point home back on the market — for much higher price: Slideshow COMMERCIAL REAL ESTATE Photos: Lovett Commercial’s Post Houston mixed-use complex debuts to thousands of visitors RESIDENTIAL REAL ESTATE Former Ben & Jerry’s CEO sells Golden mansion for $5 million (Photos) Regarding the campaign finance charge, the release said Deloach learned that PBSJ supported the U.S. Senate campaign of Martinez and he wrote a personal contribution check to the Martinez campaign and asked four PBSJ employees to do the same. The four employees, and two of their spouses, made contributions totaling $11,000, for which each was unlawfully reimbursed, the release said. Sentencing is set for Dec. 14. Each faces up to 20 years in prison, a fine and mandatory restitution. The defendants have returned $15 million to PBSJ to date, according to the release. Deloach faces an additional two years in prison on the campaign contribution count and a possible fine.
1) Final Project Part I Milestones 2) Final Project Part II Milestones
1 0 – 1 F I N A L P R O J E C T: PA RT II By: Payton Johnson ACC 692-Q1012 November 21, 2020 B A C K G R O U N D • Post, Buckley, Schuh, & Jerinigan, INC was a large engineering company located in Florida • PBSJ Corp specialized in engineering, planning, and construction management • Their clients were both public and private sectors • PBSJ Corp was founded in 1970 and had over 3500 employees • (The PBSJ Corp, n.d.) F RA U D B A C K G R O U N D • PBSJ Corp was a successful company that fell to a long-term embezzlement • 13+ years of embezzlement resulted in more than $35 million lost • All involved would identify old invoices that were not “paid” • Former Chief Financial Officer, Scot Deloach • Finance and accounting departments employees, Maria Garcia and Rosario Licata • Unauthorized checks and unauthorized bank accounts • Occupational fraud from Deloach, Garcia, and Licata • The three employees lived very lavish lifestyles • ( Three Former, 2006) F RA U D S C H E M E • Occupational fraud or misappropriation of company funds • Check fraud is very common in small businesses • Small business are 4 times as likely to fall to check fraud than other companies • Lack of internal controls in small businesses due to trust and long-term employees • Long- term employees have a lot of duties so there is lack of checks and balances • Policies and procedures such as separation of duties and second management approval can help internal controls • (Watson, 2020) R E D F L A G S • Living beyond one’s mean and excessive control issues are examples of red flags • All three employees lived lavish lifestyles • Luxury cars, multiples real estates, gambling, and fancy houses • This lifestyle did not add up to Licata and Garcia’s salary • A lifestyle this lavish is hard to maintain • (Moody, 2018) E V I D E N C E • Real, demonstrative, documentary, and testimonial • All different types of evidence can and will be relevant in an interview • Witness statements can be helpful • Bank statements, emails, accounting records, and documents will be important • Bank statements will show the checks cashed with time and date stamps along with signatures • Cross examine with the “invoices” that were used • ( Summary of the Rules of Evidence, 2018). • (Investigation Section, n.d.) D O C U M E N TAT I O N • Documentation and evidence can make or break a case • Documentation of bank statements, invoices, purchasing reports, emails, and even text messages can help • Copies of checks, account payables and receivables reports, open invoices • Previous audit reports and previous investigation files, if applicable, will allow the investigator to get a better understanding I N T E RV I E W- W I T N E S S • Colleagues of Deloach, Garcia, and Licata • Understanding their day-to-day activities • How well they preformed/ their characteristics in the office • The bank tellers/ managers of the banks involved • Understanding the witness’ credibility and accountability will help determine the importance of the witness I N F O R M AT I O N A N D Q U E S T I O N S • Character insight, managerial information, and personal information • Daily duties and how the performed these duties • Any red flags their coworkers may have picked up on • Questions • “ What do you observe with their (Deloach, Garcia, Licata) everyday duties?” • “ Do they show up on time everyday and perform these duties in a timely manner?” • “ Do you know who else was involved?” • “ Did you notice the luxury cars they were driving? Did you find that suspicious to anyone?” I N T E RV I E W- S U S P E C T • Interviews must be conducted in a timely manner and appropriately • Fraud- theory approach • Develops a theory on what happened through witness information • Analyzing data and information then creating the hypothesis or theory • This theory is used to obtain a confession or an admission of guilt • (Planning and Conducting a Fraud Examination, 2016). Q U E S T I O N S • Five types of questions; introductory, information, assessment, closing and admission-seeking • Developing a rapport with introductory questions- these set the tone • “ Hi there, I am Payton. Have we met before?” “I am working on an assignment and I was hoping you’d sit with me for a little bit?” • Informational questions- gain information on the suspect • “ What is your current position at PBSJ Corp?”, “What does your position require you to do?”, “What are your day-to-day responsibilities and duties?” Q U E S T I O N S ( C O N T. ) • Closing questions- closes out the general questions • “ You’ve known your colleagues for about 5 years, is that correct?”, “Do you suspect any colleagues could have falsified any documents?” • Assessment questions- dig into the operations and the internal controls • “ Are you the only one who handles invoices with vendors?”, “Does any have to approve the vendor payments?”, “Are checks the main form of payment?” • Admission of guilt- a confession • “ Is there anything you would like to tell me today?”, “Our investigation clearly shows that you took company assets without permission. Why did you do it?” C O M M U N I C AT I O N • I have discovered that there were many years of embezzlement happening with the CFO and with two employees of the Accounting/ Finance department. My findings had discovered that Scott Deloach would cash checks given to him by Rosario Licata from an unauthorized checking account. Then Licata and Deloach had a mutual agreement with Maria Garcia and would then split the cash between the three of them. They would process these checks by creating false invoices. My findings have concluded that this embezzlement has been going on for many years. After interviewing their colleagues, I have concluded that these three lived lifestyles well beyond their means. I would recommend prosecution to go further. F RA U D I N V E S T I G AT O R ’ S R E S P O N S I B I L I T I E S • Information and findings must be clear, accurate and unbiased and can be given both orally and written- although written is better • This information may need to go to stakeholders, the public, all involved in the case, the media, and much more • Providing clear and accurate findings will make the process easier for state and federal prosecutors and puts a good name on the fraud investigator R E F E R E N C E S • Investigation Section . (n.d.). ACFE. https://www.acfe.com/uploadedFiles/Shared_Content/Products/Books_and_Manuals/INTRO%202012%20-%20final.pdf • Planning and Conducting a Fraud Examination . (2016). ACFE. https://www.acfe.com/uploadedFiles/Shared_Content/Products/Books_and_Manuals/U.S.%20Sample %20Chapter_2016.pdf • Summary of the Rules of Evidence . (2018, March 29). FindLaw. https://corporate.findlaw.com/litigation-disputes/summary-of-the-rules-of-evidence.html • Moody, M. (2018, May 26). The 6 Most Common Behavioral Red Flags of Fraud . ACFE Insights. https://www.acfeinsights.com/acfe-insights/6-common-red-flags- fraud#:~:text=Unusually%20close%20association%20with%20a,involving%20shrewd%20or%20unscrupulous%20behavior • The PBSJ Corporation – Company Profile, Information, Business Description, History, Background Information on The PBSJ Corporation. (n.d.). Reference for Business. https://www.referenceforbusiness.com/history2/60/The-PBSJ-Corporation.html#:~:text=1973%20The%20PBSJ%20Corporation%20is,1980%20Architectural%20services%20are %20added. • Three former PBSJ employees pleaded guilty to fraud. (2006, September 29). Tampa Bay Business Journal. https://www.bizjournals.com/tampabay/stories/2006/09/25/daily55.html • Watson, B. D. (2020, June 25). Expect an Uptick in Employee Embezzlement Following COVID-19 Lockdowns . Cozen O’Connor. https://www.cozen.com/news- resources/publications/2020/expect-an-uptick-in-employee-embezzlement-following-covid-19-lockdowns
1) Final Project Part I Milestones 2) Final Project Part II Milestones
1 Johnson 10-1 Final Project Part II Submission: Presentation ACC-692-Q1012 Payton Johnson November 21, 2020 2 Background PBSJ Corporation was a large engineering company, located in Florida, who specialized in engineering, planning, and construction management services to over 3,000 clients both public and private. The company started out as Robert P. Schuh & Associates in 1960, then was renamed in 1970 to Post, Buckley, Schuh, & Jerinigan, INC (PBSJ Corp). PBSJ Corp was an employee owned company with over 3,9000 employees and in 2005 recorded over $521 million in sales ( The PBSJ Corporation , n.d.). PBSJ was a successful company that soon fell to a long- term embezzlement that took place. PBSJ’s former Chief Financial Officer, Scott Deloach, and two former workers in the finance/accounting department were involved in a long-term scheme to steal more than $35 million from PBSJ over the course of 13+ years. In addition to Deloach, Maria Garcia and Rosario Licata were accused of taking unauthorized money from 1992 to 2005 after the headquarters moved to Miami, Florida ( Three Former , 2006). The type of fraud that was committed was occupational fraud. Occupational fraud is the act of an employee misusing a company’s assets for personal gain. The fraud would take place starting with Licata. Licata would issue unauthorized checks from the PBSJ master cash account and would disburse the funds to Deloach. Deloach would then deposit the checks in personal bank accounts in different areas, splitting the proceeds with Licata and Garcia. Fraud can be hard to discover but someone must know what to look for. The fraud was discovered by the company relocating to Tampa. As a result of accounting irregularities, the financial practices were changed which lead to the discovery of concealed accounting journals. 3 The three employees involved also all lived lavish lifestyles that eventually caught up to them. Deloach owned several properties that were worth millions of dollars in Florida Keys, along with luxury cars and even a yacht. Garcia used the money to purchase high end sports cars, jewelry, ownership in a restaurant, and more. While Licata used her share to purchase real estate, engaged in gambling activities, and more ( Three Former , 2006). Fraud Scheme Fraud Scheme The fraud scheme for this case would be the misappropriation of funds or occupational fraud also known as embezzlement. Specifically for this case, check embezzlement was committed. Since Deloach, Licata, and Garcia all received money either directly or indirectly from the secret bank account, they are all responsible for committing check fraud. Employee embezzlement or occupational fraud takes place in many different forms. Such as inventory theft, cash theft, accounts receivable forging, and forging of documents. Check theft is a very common embezzlement scheme that often takes place in small businesses. In fact, small businesses fall to check forgery or payment tampering four times as much as larger businesses (Watson, 2020). Small businesses normally have a very close knit accounting or finance department with people who have been there for many years and who have gained a lot of trust within the organization. Allowing someone to keep the same access to information for a long period of time gives them a better opportunity to embezzle said money. On average this fraud may go undetected for up to 14 months and can be less costly than any other embezzlement (Watson, 2020). 4 In order to prevent internal fraud, internal controls must be put in place. These controls are policies and procedures that are put in place to prevent and detect any fraudulent activity. These controls can include separation of duties, second management approval, and access control. PBSJ lacked internal controls and this is why they fell victim to theft. It has been stated that Maria Garcia held many different positions in the finance department. When a single person has too many duties, things can go undetected because there is no back-up or anyone else looking over their shoulder. The checks that were forged went directly from Licata, who was a manager in the accounts payable department, to Deloach. There should’ve been someone in between the accounts payable department and the CFO to sign off on these checks and require backup documentation. A good example of this person would be a Controller or an Assistant Controller. Although this was a secret bank account, there should’ve been documentation on the other end. Red Flags With any fraud case there are many red flags. Unfortunately most red flags go undetected and unnoticed. The six most common red flags can be living beyond one’s means, financial difficulties, unusually close association with a vendor or customer, excessive control issues unwillingness to share duties, recent divorce or family problems, and a general “wheeler-dealer” attitude involving shrewd or unscrupulous behavior (Moody, 2018). In this case, with the 3 people directly involved, the one red flag that can relate to them is the lavish- lifestyle. Deloach, Licata, and Garcia all lived high-end lives that involved luxury sports cars, fancy houses, big boats, and real estate. They funded this high-end lifestyle with the share they got from the embezzled money. This is significant because Licata and Garcia’s roles 5 within the company would not have financially allowed them to do that alone. Deloach was the CFO so his paycheck would be higher, but for the two in the accounting and finance departments, this would’ve been tough to imagine. Evidence/Documentation Evidence There are four types of evidence that can be used to prove fraud; real, demonstrative, documentary, and testimonial ( Summary of the Rules of Evidence , 2018). Real evidence is evidence that is relevant to the case such as an event or characteristics. Demonstrative evidence demonstrates (or illustrates) the testimony of a witness during the case and is only admissible when it fairly and accurately reflects the testimony. Documentary evidence is considered “real evidence”. An example of documentary evidence is a contract, when a contract is written it contains real evidence, and if broken the contract can be used in the court of law. Testimonial evidence can be very basic and does not need any kind of evidence to make it admissible, meaning it implies what is conconfessed by a reliable witness ( Summary of the Rules of Evidence , 2018). In order for a fraud interview to be effective, the interviewer must be prepared with documents and statements by witnesses, in this case could be colleagues of Deloach, Garcia, and Licata. Before an interview begins the interviewer must collect any evidence that may pertain to the case which can include documents, statements, emails, accounting records, and more. Once this evidence has been collected, the interviewer must write clear, accurate, and unbiased reports that directly reflect the investigation and their results ( Investigation Section , n.d.). These reports 6 and findings of the evidence will then be used by management, lawyers, prosecutors, and those of the court systems. Evidence in the case include Deloach, Garcia, and Licata would include bank statements, accounts receivable and accounts payable reports, and witness statements. These statements may come from the bank tellers, colleagues, or even those involved. Bank statements would be beneficial for this case because it would show the cashed checks. Using these cashed checks can be cross examined to the accounts payable and accounts receivable reports to see if these were legitimate invoices or if they were unauthorized. Documentation Documentation is very important in fraud cases. Documentation can include bank statements, invoices, accounting reports, purchasing reports, emails, and more. In addition to the documentation listed, a fraud examiner may also look at previous audits and previous investigation files, if provided. Examining prior audits may give the examiner a better insight at the fraud at hand. In this case, the documentation that would need to be collected would be bank statements, copies of checks, copies of accounts receivable and accounts payable reports, open invoices, and internal and external emails. Bank statements of the accounts where the check is being cashed from will give a copy of the check, time and date stamp, and signatures. Having this documentation can give us a timeline of how long the three employees were taking the unauthorized checks. As the examiner, I would also request any and all emails from Garcia, Licata, and Deloach. Using these emails can help pinpoint who was involved, what the exact plot 7 was, and when it was happening. I would use this information in an interview to get an admission from the employees. Interview- Witness Who In the case of Deloach, Garcia, and Licata, I would want to interview their colleagues as witnesses. I would like to know how these three performed at work, how they acted at work, and how they conducted their every day duties. Understanding how people perform and act at work can tell a lot about a person and the best people to give that insight are the colleagues. I would determine the importance of the information by determining relevance and credibility of the witness. I would want to talk to the people of the accounts receivable and the account payables departments, as they would have the most insight and information. Information/ Witness The information I would obtain from the witnesses would be character information, managerial information, and personal information. I would want to know the employees daily duties according to their colleagues, and how well they performed those duties. I would also want to obtain any red flags that their co-workers may have picked up on. These red flags would be behavioral based or work based. Deloach, Licata, and Garcia lived very lavish-lifestyles, so I would want to ask the witnesses about their knowledge on that. The questions I would ask would be informational questions. Questions like; “what did you witness?” or “do you know who was involved?”. These questions are vague but they allow the witness to speak freely on their behalf. I would also ask “how did Deloach (Garcia and 8 Licata) perform on their day to day duties?” or “did Deloach (Garcia or Licata) mention anything about their recent estate sale?”. These questions may open up a conversation that the witness had had with the employees that may not have seemed suspicious at the time. Interview- Suspect Approach The approach of an interview is very important and must be conducted appropriately. I would take the fraud theory approach. Using this approach allows me to develop a theory of what might have happened based on the witness information. This approach must be conducted appropriately because it determines if the fraud is provable or not. The fraud theory approach involves the following steps; analyzing available data and information, creating the hypothesis or theory, testing that hypothesis or theory, and refining and amending the hypothesis or theory ( Planning and Conducting a Fraud Examination , 2016). This approach is widely used because it allows the investigator to go into an interview with the right tools in order to get a confession or admission. Types of Questions/Rapport/Admission of Guilt There are five general types of questions that can be asked during an interview. These questions can be introductory, information, assessment, closing and admission- seeking questions. All types of questions should be used in an interview but depending on the case, some question-types should be more focused on. In this case, I would use all the question-types when interviewing the suspect(s). 9 The first thing I would do would be develop a rapport with the interviewee. Developing a rapport is important because it sets the tone for the interview. I would start developing the rapport by asking introductory questions. Introductory questions such as “Hi there, I am Payton. Have we met before?” or “I am working on an assignment and I was hoping you would sit with me for a little while so I can gather some information?”. These questions clearly define who I am and why I am there. I would then start the informational-questions segment. These questions are used to gain information about the suspect and what they do. These questions can be “What is your current position at PBS&J?” or “What does your position require you to do? What are your daily responsibilities?”. Asking these questions allows the suspect to explain what they do and what their job entails. Their answers allow me to better understand their job title from their point of view. Next would come the closing questions. It seems premature to put the closing questions 3rd, but it closes out the general questions which allows me to dive into the investigative questions. These questions wrap up the informational questions which leave no doors open. Asking questions like “You’ve known your colleagues for 5 years, is that correct?” or “do you suspect any of your colleagues could have falsified any documents?” lets the interviewee understand why the examiner is there. Then comes the assessment questions. The assessment questions now dig into the operations and the internal controls of the company. “Are you the only one who handles invoices with vendors?”, “what are the internal controls?” and “does anyone have to sign off on checks?” gives a better understanding of the fraud that had occurred. 10 The final questions that would be asked are the admission seeking questions. Admission seeking questions are used to get a confession. These questions must be conducted carefully or else they can not be used in the case. The correct way to ask these questions can be “Is there anything you would like to tell me about the previous invoices?” and “our investigation clearly shows that you took company assets without permission. Why Did you do it?”. Fraud examiners must conduct these interviews in a timely manner and must be thorough and accurate. If the questions and the interview is not accurate, the admission, if given, may not be used. Communication Results of the Investigation I have discovered that there was many years of embezzlement happening with the CFO and with two employees of the Accounting/ Finance department. My findings had discovered that Scott Deloach would cash checks given to him by Rosario Licata from an unauthorized checking account. Then Licata and Deloach had a mutual agreement with Maria Garcia and would then split the cash between the three of them. They would process these checks by creating false invoices. My findings have concluded that this embezzlement has been going on for many years. After interviewing their colleagues, I have come to the conclusion that these three lived lifestyles well beyond their means. I would recommend prosecution to go further. Fraud Investigator’s Responsibilities Information given must be clear, accurate and unbiased. Information must be given orally or written, but written has been proved to be better as it is clear documentation. This information 11 may need to go to stakeholders, the public, all involved in the case, the media, and much more. Providing clear and accurate information will make the process easier for the state and federal prosecutors. Establishing a solid report of findings also gives the fraud investigator a good name and will help them succeed later on. 12 References Investigation Section . (n.d.). ACFE. https://www.acfe.com/uploadedFiles/Shared_Content/Products/Books_and_Manuals/INT RO%202012%20-%20final.pdf Planning and Conducting a Fraud Examination . (2016). ACFE. https://www.acfe.com/uploadedFiles/Shared_Content/Products/Books_and_Manuals/U.S. %20Sample%20Chapter_2016.pdf Summary of the Rules of Evidence . (2018, March 29). FindLaw. https://corporate.findlaw.com/litigation-disputes/summary-of-the-rules-of-evidence.html Moody, M. (2018, May 26). The 6 Most Common Behavioral Red Flags of Fraud . ACFE Insights. https://www.acfeinsights.com/acfe-insights/6-common-red-flags- fraud#:~:text=Unusually%20close%20association%20with%20a,involving%20shrewd %20or%20unscrupulous%20behavior The PBSJ Corporation – Company Profile, Information, Business Description, History, Background Information on The PBSJ Corporation. (n.d.). Reference for Business. https://www.referenceforbusiness.com/history2/60/The-PBSJ- Corporation.html#:~:text=1973%20The%20PBSJ%20Corporation %20is,1980%20Architectural%20services%20are%20added. Three former PBSJ employees pleaded guilty to fraud. (2006, September 29). Tampa Bay Business Journal. https://www.bizjournals.com/tampabay/stories/2006/09/25/daily55.html Watson, B. D. (2020, June 25). Expect an Uptick in Employee Embezzlement Following COVID-19 Lockdowns . Cozen O’Connor. https://www.cozen.com/news- 13 resources/publications/2020/expect-an-uptick-in-employee-embezzlement-following- covid-19-lockdowns
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