Forensic investigations may be key to addressing fraud
More and more fraud is being uncovered as companies, employees and even the public sector are becoming more aware of commercial crime. This has led to a demand for highly specialised forensic investigation skills.
Companies are working hard to become more compliant. At the same time, employees have become more intolerant of dishonesty in the workplace and are using whistle blowing procedures to anonymously report it.
The most disturbing trend of all at present is the increased reporting of procurement fraud that extends from collusion between officials and suppliers to cover quoting. This sees the same company submitting three different quotes for the same contract to manipulate the awarding of large tenders.
Inevitably huge budgets are spent on procurement fraud and people are being unjustly enriched. I've investigated cases where people are double invoicing. They are not doing the work properly and then charging double for that work. With the monies they are getting, they can afford to pay kickbacks to officials. This is really alarming
At present, more complex things are being discovered. There are more syndicated crimes being uncovered. We are seeing more racketeering cases being reported. These are the types of cases where there is organised crime and where you require specialist forensic investigators to put everything together.
Most vulnerable are those in the insurance and construction sectors. When it comes to the latter, there is a great deal of procurement fraud and fronting. Often one-man bands misrepresent themselves and land multi-million rand contracts.
Another trend is increased fraud in start-up companies that have not yet put in place sufficient controls.
When a company starts out, it hasn't realised or come to terms with its weaknesses. With no control measures, governance, policies and procedures in place, a company is at its most vulnerable. This allows for easy manipulation and a clever fraudster will use this as an opportunity to easily misappropriate funds.
Forensic services have become indispensable in ensuring that complex and high-value criminal cases are thoroughly investigated and that the appropriate evidence is presented to the court by an expert. These investigations include:
- Analysing documents and data,
- Securing available evidence, and
- Conducting interviews with witnesses.
When investigating criminal charges against individuals or entities, this includes the preparation of financial and legal evidence for trial and providing expert court testimony.
When fraud is uncovered, there is a real risk that an in-house investigation could contaminate evidence. Managers can't just go off on a tangent and seize computers. Once you start interfering and change things on that computer, the evidence become inadmissible.
Companies need to be aware of the need to bring in experts from the outset!
