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Fraud Deterrence & Investigations: Fraud Risk Management, Financial Crime Investigations, Financial Crime Defences, Proceeds of Crime Reviews, Data Mining

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By: Vincents Chartered Accountants

FRAUD RISK MANAGEMENT

Vincents can assist government departments, councils, public companies, clubs and associations to manage their organisation's fraud risk. Our experts work with your organisation to design and implement a tailored fraud risk management program. Our fraud risk management programs involve the following:

 

Fraud Risk Management

  • Identifying and assessing the inherent fraud risks of your organisation
  • Assessing the effectiveness of existing organisational internal controls on those identified risks; and
  • Developing strategies and / or internal controls to mitigate the more serious fraud risks.

 

Fraud Awareness Training

Fraud awareness training in managment's best tool in minimising the risk of fraud. We can conduct training for both staff and mangement addressing the following:

  • The nature of fraud ( what is fraud?).
  • Who commits fraud and why.
  • Fraud prevention.
  • Recognising the Symptoms of Fraud.
  • Proactive Approaches to Detecting Fraud; and
  • Case Studies applying the fraud training in practise.

 

Fraud Management Strategies

Developing and introducing fraud control strategies within your organisation including:

  • Developing and communicating the organisation's detection and fraud prevention strategy.
  • Documenting fraud prevention policies and procedures.
  • Developing and implementing strategies to detect, prevent and deter fraud.
  • Developing and introducing guidelines to ensure appropriate action is taken in the event of a fraud incident; and
  • Developing strategies to investigate and report fraud.

 

FINANCIAL CRIME INVESTIGATIONS

We have extensive experience in conducting financial investigations on behalf of law enforcement, government departments, clubs and associations, corporations and individuals. Our expert experience includes:

  • Drafting and executing search warrants, freezing orders (Mareva orders) and search orders (Anton Piller orders);
  • Providing advice on the drafting of criminal indictments, civil offence particulars, and breaches of mandatory codes of compliance;
  • Retrieving and examining documentary evidence;
  • Providing advice on the use of data analysis and data mining tools in the conduct of financial investigations;
  • Recovering and analysing electronic evidence (computer forensic analysis) (put in link to Forensic Technology Division);
  • Interviewing witnesses and or suspects in a manner admissible in a court of law;
  • Tracing funds and or assets;
  • Conducting financial analysis;
  • Preparing briefs of evidence in criminal and civil jurisdictions;
  • Arranging and co-ordinating personnel and computer surveillance operations; (put in link to Forensic Technology Division)
  • Preparing Expert Accountant's Reports for Courts, Tribunals and Commissions of Inquiry; and
  • Presenting Expert Accountant evidence in all Courts, Tribunals and Commissions of Inquiry.

 

Vincents conduct forensic investigation resulting in a Brisbane bookkeeper who stole more than $400,000 from her employer being jailed for six years.

 

Directors of Bowen Tug and Barge Pty Limited ('BTB') after introducing a new accounting system became concerned about a number of accounting transactions processed by the bookkeeper. The Directors of BTB engaged Vincents to conduct an investigation. Vincents using a combination of data mining tools and forensic accounting techniques discovered hundreds of suspect accounting transaction processed by BTB's bookkeeper.

 

Vincents prepared a report for the Queensland Police Service and presented evidence at the bookkeeper's committal hearing. In October 2006, the Bookkeeper pleaded guilty to fraud of $400,000 and received a sentence of six years.

 

In the Supreme of Queensland in the matter of Returned & Services League of Australia (Qld) v Comprite Pty Ltd [2005] QSC 361 the plaintiff sought the return of gaming and accounting records in the defendant's possession. Vincents were engaged by the plaintiff to provide an explanation as to the nature and scope of the term 'accounting records'. The plaintiff was successful in having the accounting records returned to their possession.

 

FINANCIAL CRIME DEFENCES

We are frequently engaged by defence solicitors and barristers to assist with the following:

  • review of evidence contained within a crown's brief of evidence being used to prosecute defendants charged with financial crime including where required the presentation of expert evidence in courts;
  • review of evidence contained within a crown's brief of evidence being used to prosecute defendants charged with serious drug offenses including where required the presentation of expert evidence in courts;
  • review of quantums in defendent contested sentence's.

 

PROCEEDS OF CRIME REVIEWS

In 2003, both the Commonwealth and Queensland governments introduced civil-based criminal confiscation of assets legislation. The legislation was introduced to deprive criminals of property or assets gained through criminal activities and force them to justify the sources and legitimacy of their unexplained wealth.

 

Vincents will assist Law Enforcement, Defence Barristers and solicitors to:

  • collect financial information and evidence to support or defend civil restraint or forefuture proceedings
  • prepare a financial analysis to support or defence civil restraint or forfeiture proceedings
  • provide expert testimony at trial
  • prepare and present expert proceeds of crime restraint and forfeiture evidence provide a review and commentary on financial analysis prepared for restraint or forefuture proceedings

 

Note to Legal Aid

Our forensic accounting and litigation support services are provided at legal aid rates to both solicitors employed by legal aid and solicitors acting as agents of legal aid, practicing in either the State or Commonwealth criminal jurisdictions.


DATA MINING

Sophisticated software allows our forensic accountants to extract data files from any source mainframe to PC. The Vincents forensic accountant will then apply a range of tests, either standard or tailored to suit particular client requirements, with the aim of detecting a range of fraud and financial crime scenarios including:

  • Accounts Payable Fraud;
  • Accounts Receivable Fraud; and
  • General Ledger Fraud.

 

By way of example of the standard tests that may be conducted on accounts payable data would be as follow:

  • Payments of cash, sundry, or petty cash;
  • Duplicate invoice patterns;
  • Frequent credit notes;
  • Round dollar value payments;
  • Frequent early payments;
  • Weekend & Public holiday transactions;
  • Missing cheques & payments;
  • Sequential invoice numbers;
  • Digital analysis of payments (Benford Law);
  • Invoices near authorisation levels;
  • Transaction spikes and increases; and Low activity vendors.

 

Data mining is best illustrated by the following example:

A multi national company (lets call it ABC Limited) with annual printing purchases of hundreds of thousands of dollars purchased its printing from a company called 'Strategic Buiness Solution'. The purchasing manager employed by ABC Limited set up a bogus print buying company called 'Strategic Business Solutions'. Strtigic Business Solutions was owned by the purchasing manager's wife. The purchasing manager routed the ABC Limited print buying from the legitimate printing company Strategic Business Solutions via his wife's company, maked the printing costs up by 100% and then on sold the printing to ABC Limited.

One of the principal reasons the purchasing manager's dishonesty remained undiscovered was simply the misspelling in the bogus printng supplier's name. To the ABC Limited finance staff authorising each of the cheques made payable to the bogus printer, these cheques appeared to be valid, routine, innocuos printing payments. The methodology of the dishonest purchasing manager was uncovered by two routine data mining queries. These particular data queries are standard (along with a number of other tests) and are almost always employed when the user is looking for 'lost' or 'missing' monies:

 

  • All the payments of ABC Limited for a three year period were sorted alphabetically. While initially the payments to the payee 'Stratigic Business Solutions' was thought to be a key stroke error the next data mining test detailed revealed the methodologies of the dishones purchasing manager.
  • The invoice numbers of ABC Limited's vendors were sorted sequentially. After these vendors invoices were sorted sequentially it was apparent that the invoices from Stratigic Business Solutions had no gaps. The strict sequential numbering of Stratigic Business Solutions caused the following questions to be asked: Is ABC Limited, Stratigic Business Solutions only client? Does this make sense? Further investigations were then conducted which ultimately uncovered the purchasing managers dishonesty.