Why fraud investigations are ‘always business; never personal’

Whether a fraud investigation involves a complex Ponzi scheme or a crack supplier, fraud investigators would do well to remember Wesley Snipes’ famous quote in the movie New Jack City: ‘It’s always business; never personal.’ Think about it: The first thing that fraud investigators learn is the Fraud Triangle made up of Motivation, Opportunity and Rationalization.

A fraudster’s family life comes into play in at least two of these elements, and sometimes all three:  The #1 listed IRS example of corporate fraud investigations for the year 2013 involved a husband and wife team. Indeed, a suspected fraudster’s personal life is just as important to my investigation as his or her professional life.

Recently, a client came to me because she wanted to know if ‘Bob’, a high-flying tech executive whom she had loaned a large amount of money to, could afford to pay back a judgment.

Bob was the single member of an LLC and kept his own books, so she hit a brick will there. But even before pulling UCC filings and doing the rest of the asset search, a quick look at Bob’s social media told me a lot about his character. In order to understand the perpetrator, I had to go way beyond how he behaved at work and take a long, hard look at his personal life and habits.

His Instagram page featured a constant stream of Bob partying around the world on yachts, flying helicopters and chilling out in massive hotel suites. But when I checked his Facebook page, I noticed something odd: Bob had used exactly the same pictures for both, probably because Facebook stripped out the EXIF data, making his location impossible to verify.

Offline, the picture was scarier. Though Bob’s attempted to keep business and personal funds separate, he had three tax liens and an impending foreclosure on his personal property. Bob is a classic case of what I call ‘The Instagram Illusion’ : He spread disinformation to make everyone believe that he was a high roller, then convinced himself that the fraud was only temporary–until he could pay everyone back.

As for Bob – In the end, my client settled with him partly by using his own instinct for self-preservation against him – he did not want his case to go viral, where it could be spread among friends and clients.

Love Scams: The CSI Effect

In his awesome book Practical Homicide Investigation, Vernon Geberth describes a phenomenon he labels ‘the CSI effect’. Basically, as more information about forensics becomes available to the general public via shows like CSI, criminals get smarter. They may wear gloves, or stage scenes to look like bizarre sex crimes they have seen in movies. I have found that the same thing is true of love scams.

You may be a Google armchair expert, know how to Facebook stalk and even master the art of putting on sunglasses after uttering the perfect one-liner, but love scammers are getting more sophisticated every day. This is why a licensed investigator who is up-to-date on the latest technology can help make sure that you don’t get fooled again (see what I did there?)

By now, many people are familiar with ‘catfish’, or people who pretend to be someone else online. They know to avoid Facebook pages that have few posts or friends, or have found websites that will tell them if Twitter users are real or fake. But at the same time, criminals are getting better at spreading digital disinformation. A number of services now allow people to buy ‘verified’ Twitter followers, and Facebook fakes have begun to craft much more elaborate pages with hundreds of friends. LinkedIn pages, which many people look at to verify employment – are actually self-reported, and totally open to fraud.

This month, I worked a case where the man I was attempting to serve papers to had crafted an elaborate – and completely fake – life on Facebook and Instagram. He ‘tagged’ himself at various locations hours or days after he left. Eventually we were able to geo-tag a photo and find him through old-fashioned surveillance, but by leaving a trail of false leads, he was able to confuse investigators for several days.

They also work to foil online background checks. For example, many criminals know that the starting point of identity is a social security number. Since they have bad credit or a criminal record, they may try to beat the system by stealing social security numbers from other people or the Death Master Index. Since it’s hard for a dead guy to get arrested for assault, the scammer uses the ‘clean’ social security number to build credit, get jobs and avoid judgements and child support payments.

It pays to remember that – even in a technological age – over-sharing is NOT the same thing as intimacy. A licensed private investigator with experience in love fraud can help you figure out who the person on the other end of the computer really is, and what they really want.

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