3. Steps in the Evidence Collection
Process
1. Collect physical and documentary evidence
2. Collect observational evidence
3. Collect interview evidence
• The interview process involves specific steps. The
initial interviews are conducted with the most
remote suspects. The investigator then conducts
additional interviews that are successively closer
to the suspects, with the prime suspect being the
last person interviewed.
4. The Fraud Engagement Process
• The fraud engagement process begins with the investigator’s
first contact with the case and ends with a complete agreement
regarding the services the fraud investigator will provide.
5. The Incident Report
• Includes the initial information used to justify
the investigation
– The initial information should be included in a
unified case file
– The incident report can serve as probable cause
for law enforcement
– The incident report can provide proof the the
suspect is not being singled out because of illegal
discrimination or in violation of collective
bargaining rights
6. The Initial Notifications
• Routine incident reports may be routed to a
predetermined department
• Non-routine reports may be routed to the legal
department or outside council
• It might be necessary to notify an insurance
provider or regulatory body
• The initial notification and incident evaluation
must be kept as secret as possible, to avoid
compromising a possible investigation
• Temptation must be resisted to confront suspects
at this point
7. Consider Legal Issues
• Consider rights of workers or other suspects
• Consider the possibility of conducting the
investigation under attorney-client privilege
• Evaluate the evidence and consider whether
there is sufficient legal justification to fire a
worker or place a worker on administrative leave
• Consider the rights of investigating employers
• Consider the extent to which a government entity
might be involved in the investigation
• Consider reporting obligations
8. Evaluate Loss Mitigation and Recovery
Considerations
• Immediate Loss mitigation options: (1) immediately
fire the employee, (2) change the employee’s job
responsibilities, (3) place the employee on
administrative leave (with or without pay), or (4)
permit the employee to continue in her current
position, possibly continuing the fraud, thus giving
the investigator the possibility of catching her in
the act.
• Insurance recovery
• Recovery through litigation
• The objectives, scope, and costs of the
investigation
9. Possible Objectives for an
Investigation
• Stop the fraud from continuing.
• Identify the loss for insurance purposes.
• Identify the loss for tax purposes.
• Make an example of a fraudster.
• Minimize any embarrassing disclosures in the
press.
• Discover weaknesses in the internal control
system.
10. Elements of an Engagement Letter
• Services to be Provided
• Objectives and Scope of the Investigation
• Methods to be used
• Resources required
• Responsibilities of the respective parties
• The Basis and Methods Used for Charging
Professional Fees
• The means for resolving disputes
