As a Certified Fraud Examiner, I’ve encountered businesses of all types, but some cases stand out because of the sheer volume of issues at play. One such case involved a recent client whose organization was drowning in complexity, making it difficult to pinpoint the true fraud risks.
After my initial meeting with the client - a fast-growing logistics firm - it became clear that there was a LOT going on. The owner, I’ll call him “Jim,” was juggling multiple responsibilities: overseeing operations, managing finances, and personally approving vendor payments. His company was expanding quickly, but internal controls had not kept pace, or simply didn’t exist. With a multitude of overlapping concerns, I had to sift through layers of information to focus on the actual fraudulent activity at play.
I held numerous meetings, conducted interviews with staff and management, and looked through several years’ worth of company, financial and banking records. After some research, I was able to eliminate some of the issues from further investigation, as they were determined to be waste and abuse rather than outright fraud. We made note of these issues but decided to narrow the scope of this engagement and focus our time on those with larger potential exposure, and the availability of records.
I asked Jim to provide a priority list, which he did. While I concentrated on his list, there was one aspect that just didn’t feel right to me. Even though it wasn’t high on Jim’s priority list, I asked if I could continue my research on these lesser-considered items, just to ensure a thorough review. I even offered to do this on my own time. Jim didn’t think it would yield anything significant - the proverbial “smoking gun” we’ve been looking for, but he provided me with the documentation needed to continue the review.
And low and behold, that’s exactly where I found it.
The client was both relieved and dismayed. I had uncovered significant fraud - his business partner had been skimming large amounts of cash. Beyond that, my team and I discovered additional issues which we detailed in the final report we ultimately provided our client. Now, it was up to Jim to decide what to do with the findings. For a business owner, this can be an excruciating position to be in.
I’ll move on to the next client, but I fully expect to be called to testify in court as to my findings in approximately four months, in that there is already active litigation between my client and his partners. Par for the course in this line of work - once I file my report, litigation is typically expected next as part of the process.
Sometimes, experience combined with a gut feeling can lead you to the truth. If business owners suspect internal fraud exists within their company, they need to act immediately before the losses add up. A Certified Fraud Examiner can help them navigate the process and protect their business.
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