When I got the investigation, I looked over the forensic audit report. I was not formally trained on reading forensic audit reports or any kind of bookkeeping other than my own checking account, so it was confusing.
To help me understand they dynamics so I could investigate it properly, I had to get acquainted with the processes. I created a list of questions and spoke to professional accountants and detectives from the economic crime unit of the county prosecutors.
Then questions I had concerned how accounting works and how a check could be made out to one person yet be cashed by a third party, that is not a common financial transaction. What I found was the only way to do this was to manipulate the software that was doing the accounting, check writing and record keeping.
Once I understood that, I began asking:
• Who had access to the accounting software?
• Who actually used the software?
• Who approved the payments?
• Who credited the payments and cash in?
• Who reconciled the accounts?
• And who was authorized to do this?
It was through these questions that I realized I could have a single thief or a conspiracy of thieves. The owner might be involved, or another employee and the accountant could be in with them to defraud the business.
Long and short of it was the only person with the knowledge of the software was the accountant, she did it all. When she prepared the monthly reports, it was with the manipulated information and the CEO signed off on it not knowing he was being defrauded.
This information prepared me to interview the accountant, because I now had specific information to ask questions about. I knew what was real and what was fraud and how I could decipher between the two when she answered my questions.
Her interview responses led me to contact three other companies she worked as a bookkeeper using the same software. In each case she was doing the same thing, her theft was over $1.5 million from the four companies. During follow up interviews we found her laundering scheme, which was quite inventive,
In this case and in many others, the questions we ask should be unique to the case we are investigating. Generic questions are OK, but do not usually lead you to the truth. There are some specific points we search for when asking questions:
• Motive, as this will help us find other witnesses, accused or victims.
• Actual activities, how an act was committed and planned.
In conducting liquor license background investigations, we understand that the motivations for a criminal to get liquor license is almost always the access to a cash business.