Tim Reddick is an expert in working with whistleblowers and confidential informants. His presentation discusses defining whistleblowers and cooperating witnesses, the importance of finding and vetting them, developing policies to protect them, and handling potential issues that may arise. He emphasizes independently verifying information from sources and documenting all communications to maintain credibility and protect from pitfalls. Reddick also notes that incentives like payments and qui tam laws have been shown to reduce fraud losses and duration by encouraging whistleblowers to come forward.

1. Working with Whistleblowers
Tim Reddick, Managing Director, Desert Thunder Investigations

2. Tim Reddick, CPP, PCI, CFE
25+ years of investigative experience
Extensive education background including
Masters in Criminology and FBI National
Academy
Certified Fraud Examiner of the Year, 2011
ASIS International Professional Certification
Board International Award of Excellence,
2007
ASIS International Investigations Council
Member
Life Member, International Association of
Chief of Police

3. Overview
• Definitions
• Why are Whistleblowers Important?
• Policy
• Finding and Vetting
• Handling Issues
• Protecting Whistleblowers/sources
• Incentives

4. Definitions
• Whistleblower
– Numerous laws and definitions
– Expansion under Lawson v FMR LLC
– Dept of Homeland Security v. MacLean
• Cooperating Witness
• Confidential Informant

5. Initial Detection of Occupational Frauds
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

6. Median Loss and Median Duration
by Detection Method
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

7. Impact of Hotlines
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

8. Frequency of Anti-Fraud Controls
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

9. Detection Method by Size of Victim
Organization
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

10. Frequency of Anti-Fraud Controls
by Size of Victim Organization
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

11. Quote
“If you fail to plan, you plan to fail.”
Benjamin Franklin

12. Policy
• Fully vetted PRIOR to needed
• Include How to document
– Maintain Whistleblower protections
– CI credibility
• Know and Follow Policy
• Fully Document Exceptions
• Include Legal issues in policy (criminal activity of WB/CI,
false info from CI, etc.)

13. Policy Issues
• Other policies that may apply (FBI FCPA Example-not
recording all conversations between CI and defendant)
• Other Agency, no policy on working with CI’s,
Whistleblowers or recording of conversations but
comprehensive policy on what you can or can’t wear on
casual Fridays
• Note on recording (Controversial, Legal Issues, Include
in Policy)

14. Finding WB/CI/CW
• Encouraging Reporting
– Cultural obstacles
• Hotlines
– 24 hour access
– Live operator
– Follow-up Mechanism
• Who could be a WB/CI/CW?

15. Source of Tips
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

16. Others to Consider
“Any person an investigator comes into contact with during the course of an
examination is a potential informant”*
 Administrative Assistants
 Bookkeepers
 Ex-spouses, Ex-girlfriends/boyfriends
 Doorman
 Mail carriers
 Janitors
 Security Guards
 Servers
 Merchants
*Informants & Whistleblowers, The good, the bad and the ugly. Martin T.
Biegelman, CFE, ACFE Fellow, CCEP, Fraud Magazine, March/April 2014

17. Vetting and Assessment
• Background
• Previous experience
• In a position to know or have access?
• Expertise
• Motivations

18. Common Motivations
 Doing what is right
 Honest Person
 Repentance
 Elimination of Competition
 Money or reward
 Police/Investigation Buffs
 Trust Relationship with
Investigator
 Eccentrics
 Revenge
 Jealousy
 Fear of Jail
 Resolution of Criminal Charge
 Working off a case
 Good Citizenship
 Ordinary Citizen
 Doing civic duty

19. Handling Issues
• Whistleblower complaints
– “Procedurally Fair”
• Whistleblower retaliation (and Trends)
• Communications between Investigator and
WB/CI
• Independent Verification

20. Independent Verification
Use independent sources of
information
Complete honesty
Look for intentional withholding of
information
Primary purpose is to assess
truthfulness and reliability

21. Handling Issues (Cont’d)
• Criminal involvement or misconduct by WB/CI
• Pitfalls

22. Some Pitfalls
 Making promises you can’t keep
 Lying to the WB/CI
 Allowing WB/CI to do illegal acts
 Not maintaining professional
relationship
 Personal entanglements with
WB/CI
 Everything you say is subject to
Review
 Document, Document, Document
 Loss of Objectivity
 WB/CI’s may say anything
 Failure to test information
 Not delineating specific CI latitude
(what they can and can’t do)
 Continuing to use an unreliable
WB/CI
 Allowing WB/CI to control
investigation
 Disclosing other cases or witnesses

23. What Makes a Story?
PEOPLE
ACTIVITIES
OBJECTS
LOCATIONS
TIME

24. Protecting Sources

25. Protecting Sources
• Can they remain anonymous?
• Team discussions and outside agencies
• During investigation and interviews
• Methods of communication
• Tasking and collecting information
• Reports
• Follow-on legal proceedings

26. Copyright 2003 Kevin Duffy (www.kenvinduffy.net). Used with permission.

27. Incentives
Should companies offer incentives?

28. Incentives
“Having a hotline, having fraud training for employees and, to some
extent, having rewards for whistleblowers, are critical aspects of an
anti-fraud program.”
- John Warren, J.D., CFE, ACFE Vice President and General Counsel
•Payments to WB/CI’s
– 26% reduction in median loss and
– 33% reduction in median duration
•Qui Tam incentives

29. Frequency of Anti-Fraud
Controls
2014 Report to the Nations on Occupational Fraud and Abuse. Copyright 2014 by the Association of Certified Fraud Examiners, Inc.

30. Questions?

31. Thank-you for participating
If you have any questions, please feel free
to contact:
Tim Reddick, CPP, PCI, CFE
Managing Director, Desert Thunder Investigations
Phone: 602-341-5121 dti@usa.net
Joe Gerard, Vice President Marketing and Sales
j.gerard@i-sight.com