Fraudulent Documentation: Fraudsters’ Secret Weapon ... How to Disarm Them


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Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website
This Webinar focused on the subject in the title
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Fraudulent Documentation: Fraudsters’ Secret Weapon ... How to Disarm Them

  1. 1. "Fraudulent Documentation: Fraudsters’ Secret Weapon ... How to Disarm Them” May 29, 2013 Special Guest Presenter: Robert Baier, Handwriting Services Int’l Copyright © 2013 FraudResourceNet™ LLC About Peter Goldmann, MSc., CFE  President and Founder of White Collar Crime 101 Publisher of White-Collar Crime Fighter Developer of FraudAware® Anti-Fraud Training Monthly Columnist, The Fraud Examiner, ACFE Newsletter  Member of Editorial Advisory Board, ACFE  Author of “Fraud in the Markets” Explains how fraud fueled the financial crisis. Copyright © 2013 FraudResourceNet™ LLC
  2. 2. About Jim Kaplan, MSc, CIA, CFE  President and Founder of AuditNet®, the global resource for auditors  Auditor, Web Site Guru, Internet for Auditors Pioneer Recipient of the IIA’s 2007 Bradford Cadmus Memorial Award.  Author of “The Auditor’s Guide to Internet Resources” 2nd Edition Copyright © 2013 FraudResourceNet™ LLC Robert Baier Introduction     Bob Baier is a certified handwriting expert and a certified forensic document examiner (CDE) He has 3 Degrees -- AS, BS, MA. CDE, CHA Bob is a certified NY State law enforcement instructor and trains in the areas of document examination, identity theft, bogus checks, statement analysis, the criminal mind and handwriting as well as overall handwriting analysis. Mr. Baier has been on live radio nationally and has been on the Television Shows “Inside Edition” and “Law Talk TV”. In Sept 2005 he was featured in ESPN magazine for an analysis he did regarding an extreme sport athlete. Copyright © 2013 FraudResourceNet™ LLC
  3. 3. Introduction cont’d  Bob is the author of the book “Identity Theft – Prevention for the College Student.” This is considered by some to be “The finest and most complete book on the market today regarding Identity Theft and the easiest to read with its conversational style.” Cecile Moore N. Attleboro, MA. This book has been used to train law enforcement in at least four different states.  Bob’s new book, “GPS for Success (Goals and Proven Strategies)” is co-authored with Steven Covey author of the book “7 Habits of Highly Effective People”, Dr. John Gray author of the book “Men are from Mars Women are from Venus” and Les Brown nationally known speaker and author. Bob is one of only 3 people in the country who can do training on both Statement Analysis and Handwriting Analysis.  Copyright © 2013 FraudResourceNet™ LLC Webinar Housekeeping This webinar and its material are the property of FraudResourceNet LLC. Unauthorized usage or recording of this webinar or any of its material is strictly forbidden. We will be recording the webinar and you will be provided access to that recording within 5-7 business days after the webinar. Downloading or otherwise duplicating the webinar recording is expressly prohibited. Please complete the evaluation to help us continuously improve our Webinars. Unless you are participating in a group that is viewing this Webinar on a common computer screen, you must answer the polling questions to qualify for CPE per NASBA. Submit questions via the chat box on your screen and we will answer them either during or at the conclusion. If GTW stops working you may need to close and restart. You can always dial in and listen and follow along with the handout. Copyright © 2013 FraudResourceNet™ LLC
  4. 4. Disclaimers  The views expressed by the presenters do not necessarily represent the views, positions, or opinions of FraudResourceNet LLC (FRN) or the presenters’ respective organizations. These materials, and the oral presentation accompanying them, are for educational purposes only and do not constitute accounting or legal advice or create an accountant-client relationship. While FRN makes every effort to ensure information is accurate and complete, FRN makes no representations, guarantees, or warranties as to the accuracy or completeness of the information provided via this presentation. FRN specifically disclaims all liability for any claims or damages that may result from the information contained in this presentation, including any websites maintained by third parties and linked to the FRN website Any mention of commercial products is for information only; it does not imply recommendation or endorsement by FraudResourceNet LLC Copyright © 2013 FraudResourceNet™ LLC 6 Today’s Agenda  Introduction: Fraud Statistics: A Growing Fraud Threat  Auditing for Fraud: Standards & Essentials  Writing Habits  Bogus Checks  Numbers  Request Writing DDI  Anonymous/Disguised Writing  Your Questions  Conclusion Copyright © 2013 FraudResourceNet™ LLC
  5. 5. Fraud: The Big Picture According to major accounting firms, professional fraud examiners and law enforcement:  Fraud jumps significantly during tough economic times  Business losses due to fraud increased 20% in last 12 months, from $1.4 million to $1.7 million per billion dollars of sales. (Kroll 2010/2011 Global Fraud Report)  Average cost to for each incident of fraud is $160,000 (ACFE) Of Financial Statement fraud: $2 million  Approx. 60% of corporate fraud committed by insiders (PwC)  Approx. 50% of employees who commit fraud have been with their employers for over 5 years (ACFE) Copyright © 2013 FraudResourceNet™ LLC The Auditor’s Role  IPPF Standard 1210.A3  Internal auditors must have sufficient knowledge of…available technology based audit techniques to perform their assigned work Copyright © 2013 FraudResourceNet™ LLC
  6. 6. Deception and Writing Copyright © 2013 FraudResourceNet™ LLC Common Documents Subject to Fraud, Forgery, Crime etc. Wills, Deeds, Company Contracts, Checks, Mortgages, Financial Statements (car dealerships), Vendor Disputes, Receipts, Office Memos, Notes, Writings on Bathroom Walls, Inside Company Trucks and more. Copyright © 2013 FraudResourceNet™ LLC
  7. 7. Document Examination  Writing is a learned skill  We learn through repetition (until a habit)  Every mature writer has his own set of unique handwriting habits  These are unconscious habits  Then compare the writing habits of the two writers  Natural variation in writing (range) Copyright © 2013 FraudResourceNet™ LLC Polling Question 1 Writing is a learned skill A. True B. False C. Copyright © 2013 FraudResourceNet™ LLC
  8. 8. Bogus Checks  You can examine 7 things in only 10 seconds concerning the check itself -- to determine if it is real.  We are not talking about looking at any writing on the check.  Where exactly on the signature line do you sign your name.  No such thing as a signature line on a check. Copyright © 2013 FraudResourceNet™ LLC Check Signature Line Copyright © 2013 FraudResourceNet™ LLC
  9. 9. Perforation  All “real” personal checks have a perforation on one of the 4 sides.  Only exceptions are some payroll checks and government checks. Copyright © 2013 FraudResourceNet™ LLC Microprinting Copyright © 2013 FraudResourceNet™ LLC
  10. 10. Front of Check Copyright © 2013 FraudResourceNet™ LLC Back of the Check Copyright © 2013 FraudResourceNet™ LLC
  11. 11. Numbers  Our numerals are based on the Arabic numerals.  Formation of numerals is part of penmanship training  Numbers are rarely disguised  Writers don’t realize that numbers are identifiable Copyright © 2013 FraudResourceNet™ LLC Numbers  Types of fraud cases involving numbers:  Raising the amount of a negotiable instrument  Doctoring the books in embezzlement cases  Forged or counterfeit checks.  Identification of a writer by his numbers Copyright © 2013 FraudResourceNet™ LLC
  12. 12. Numbers  Raising the amount of a negotiable instrument Copyright © 2013 FraudResourceNet™ LLC Polling Question 2 The numbers we use are based on ________ Numerals A. B. C. D. Latin Arabic American Roman E. Copyright © 2013 FraudResourceNet™ LLC
  13. 13. Embezzlement Copyright © 2013 FraudResourceNet™ LLC Altered Documents Copyright © 2013 FraudResourceNet™ LLC
  14. 14. Check Washing  Some chemicals are used on checks to erase all of the ink. “Washing”  Washed checks have a slimy feel.  Side lighting will show differences in “sheen”  Use “Uni ball Signo 207 Pen” Copyright © 2013 FraudResourceNet™ LLC Identifying a Writer by Numbers  Because people are creatures of habit, they can be identified by the way that they separate their numbers when writing dates. Slashes, Dashes, Spacing  Number formations can be identified Copyright © 2013 FraudResourceNet™ LLC
  15. 15. Anonymous/Disguised Writing  70% of Anonymous writings in the workplace are female  Worst language and most offensive drawings are also females  25% of Anonymous writings in the workplace are done by the person reporting the incident  #1 change is Slant then Capital letters  Cursive to Printing or vice versa  Start from the back and work forward Copyright © 2013 FraudResourceNet™ LLC Proportions Copyright © 2013 FraudResourceNet™ LLC
  16. 16. Request Writing  Dictate, Duplicate and Isolate  Create Words for Combos and Connect. Copyright © 2013 FraudResourceNet™ LLC Fredie Forger Copyright © 2013 FraudResourceNet™ LLC
  17. 17. Polling Question 3 ______ percent of anonymous writing in the workplace is by females A. B. C. D. 50% 25% 70% None of the above E. Copyright © 2013 FraudResourceNet™ LLC Is this a photocopy of an original receipt? Copyright © 2013 FraudResourceNet™ LLC
  18. 18. Handwriting Analysis      Brief history Handwriting is brain writing Handwriting is a science Graphology/Handwriting Analysis Forensic document examiner (testifies in court) Copyright © 2013 FraudResourceNet™ LLC Uses of Handwriting  Forgery Detection  Law Enforcement (profiling depts)  Job Placement (5000 US)  Jury Selection  Tenant Selection Copyright © 2013 FraudResourceNet™ LLC
  19. 19. Uses of Handwriting (cont’d)  Self Improvement  Grapho-Therapy  Relationship Compatibility  Help Children  Disease Detection Copyright © 2013 FraudResourceNet™ LLC Europeans  European Countries use handwriting analysis extensively  US Customs Agent Copyright © 2013 FraudResourceNet™ LLC
  20. 20. Taking Statements  If you can “weed out” fraud suspects you will save time. “Speed Read” your suspects.  Change your statement sheet. Same heading with directions but where they write should be a blank paper with no lines.  Office personnel help out Copyright © 2013 FraudResourceNet™ LLC Polling Question 4 Handwriting analysis is useful for which of the following… A. B. C. D. Law Enforcement (profiling depts) Job Placement (5000 US) Jury Selection All of the above E. Copyright © 2013 FraudResourceNet™ LLC
  21. 21. Statement Analysis Training  Personal Vocabulary  25-50-25 story  Try to Tell the Truth  Writing Changes When Lying Copyright © 2013 FraudResourceNet™ LLC The Criminal Mind Copyright © 2013 FraudResourceNet™ LLC
  22. 22. The Criminal Mind      No Margins – live with no boundaries X’s at baseline-thinking about death Smiley face – deception, do not trust Covering or scratching things out – deceit If obscure name-do not trust Copyright © 2013 FraudResourceNet™ LLC Criminal Mind Copyright © 2013 FraudResourceNet™ LLC
  23. 23. Criminal Handwriting Traits Copyright © 2013 FraudResourceNet™ LLC Polling Question 5 Covering up or scratching out portions of written documents is often a sign of… A. B. C. D. Correction of honest errors Deceit Professional editing None of the above E. Copyright © 2013 FraudResourceNet™ LLC
  24. 24. Covered a Lot  Handwriting Habits, Bogus Checks, Numbers, Request Writing, Anonymous, Disguised Writing, Hate Crimes, Tremor, Criminal Mind, Identity Theft etc.  Diff. Between Doc. Exam and Handwriting Analysis Copyright © 2013 FraudResourceNet™ LLC Resources  Book – Forensic Handwriting Examination 808 528-1112 (Hawaii)  Taking Statements – Miranda Fitchette  Copyright © 2013 FraudResourceNet™ LLC
  25. 25. Questions?  Any Questions? Don’t be Shy! Copyright © 2013 FraudResourceNet™ LLC Thank You! Website: Jim Kaplan FraudResourceNet™ 800-385-1625 Peter Goldmann FraudResourceNet™ 800-440-2261 Copyright © 2013 FraudResourceNet™ LLC
  26. 26. Thank You Bob Baier Forensic Document Examiner 1-888-460-3828 Copyright © 2013 FraudResourceNet™ LLC Coming Up Next Month  "An Expert’s Advice on Establishing an Organization Wide Fraud Policy” on June 5  "How to Catch Expense Reimbursement (T & E) Cheaters Using Data Analysis"Effective AntiFraud Controls, on June 18  "Ethics for Auditors: Understanding Current Issu es in Financial Integrity” on June 26 Copyright © 2013 FraudResourceNet™ LLC
  27. 27. Check Fraud Detection Tools Copyright © 2013 FraudResourceNet™ LLC Check Fraud Detection Tools Copyright © 2013 FraudResourceNet™ LLC