The Fine Art of Interviewing Fraud Suspects

An interview with Paul McCormack, fraud investigator and educator…

How many fraud suspects have you interviewed in the course of your career as a certified fraud examiner?

After the first hundred, I actually stopped counting, but I’ve easily interviewed more than 500 people while investigating employee and third party fraud.

How is interviewing a fraud suspect different from the interrogations we see dramatized on TV?

The goals are very different. On TV, the actor-detective wants to force a confession. It makes for entertaining television. The goal of the interview in a private company is to encourage the employee to share information. Threatening him or her, with termination or legal action, isn’t appropriate or effective. In fact, there are legal risks to it. Tactics that may be appropriate for law enforcement can get you in trouble if you employ them as an interviewer in a corporation.

What qualities make a good fraud interviewer?

A good fraud interviewer knows how to connect with people. I don’t mean in a jovial way. He or she must be able to understand a person’s thought processes as well as their body language and use them to drive the interview. A good interviewer is able to listen intently to what the employee is saying. And not saying. They are adept at establishing rapport. A good fraud interviewer must be able to maintain composure, no matter how the employee reacts, and be creative in figuring out how to get the employee to talk.

How do you prepare before you go into the room with the employee?

You start by taking a hard look at the documents you have and trying to explain the employee actions in context. Could the transaction in question be the result of a system error or a process problem or a lack of employee training, and not fraud? Could we be misreading the document? You develop hypotheses and try to disprove them before doing any interviews.

Preparation before going into the interview room is crucial. You want to learn as much as possible about the individual whom you are about to meet. You conduct mock interviews and role-play all the scenarios you can think of. Mock interviews allow you to test your data again and develop confidence in your exhibit. I’d say for every hour spent in the interview room, three hours are spent preparing.

What do you hope to get out of the interview?

I want to stress that proving someone guilty or innocent is not the goal. The performance of investigators should never be judged on how many confessions they get or how many employees are terminated as a result of their investigations. That creates an incentive to chase the easiest cases. The goal is to find, validate, and provide facts so that others can make fully informed decisions regarding an employee’s employment status.

Throughout the interview, you have to keep asking yourself, “am I getting the information I need to write a report that someone else can view as complete?”

What’s the biggest mistake a fraud interviewer can make?

The worst mistake is assuming the target of the investigation is guilty and it’s your job to prove it. Going into an interrogation with a predefined conclusion can get you in trouble. You may believe the evidence is stronger and more compelling than it actually is. You may think that the documents speak for themselves when they don’t. You may not ask questions that need to be asked.

Each investigation has to be conducted with the same view to gathering facts, understanding the facts, and allowing others to interpret those facts. The worst thing that can happen is for an investigator to shortcut that process and believe that they are the proverbial judge, jury, and executioner.

For McCormack’s best practices for fraud detection and prevention, listen to his free webcast on The Threat Within: Combat Employee Embezzlement.

https://cpelink.wordpress.com/2012/08/23/the-fine-art-of-interviewing-fraud-suspects/