Justice for Fraud Victims Project

1
Justice for Fraud Victims Project

• Dr. Sara Melendy
• melendy_at_jepson.gonzaga.edu

2
Justice for Fraud Victims Project

• Overview of JFVP
• Overcoming Challenges
• Case Selection
• Fraud Examples
• Future of the project

3
Overview of the JFVP

• idea (AUSA K.Jill Bolton)
• people
• Law enforcement
• Department of Justice
• Spokane Chapter of ACFE
• Gonzaga University
• timetable
• challenges

THE PILOT PROGRAM... The project will
begin with a forensic accounting lab course at
Gonzaga University where a select group of
students will be assigned to teams that are
supervised by Gonzagas Masters of Accounting
program faculty and by mentors from the Spokane
Chapter of the Association of Certified Fraud
Examiners as they investigate the allegations
from cases referred by law enforcement. THE
LONG-TERM PLAN... Even more exciting, Gonzaga
would like to develop the program into a full
Center for Forensic Accounting. Money could be
raised for the Center from a variety of sources,
including community groups, various governmental
and foundation grants, and private donors. It is
also possible that the courts in which JFVP cases
are prosecuted may direct restitution be paid to
the program (much like victims obtain restitution
for the cost of a CFE examination as part of
their loss from the crime). Ideally, a full-time
staff member would supervise student
investigations, creating a permanent touchstone
as the program progresses year-to-year to provide
continuity. Such a Center would not only house
the JFVP, but create a venue for a forensic
accounting research specialization.
FOR VICTIMS... The cost of obtaining a fraud
examination by a Certified Fraud Examiner (CFE)
is often prohibitive for victims. JFVP can help
them obtain justice where fraud occurred and they
suffered financial harm. Without this project,
the large volume of financial fraud cases
confronting scarce law enforcement resources
might leave the victims of financial fraud
without the resources and assistance needed to
pursue the perpetrators of the fraud through
forensic accounting. FOR STUDENTS JFVP will
provide invaluable real-world experience in
forensic accounting, allowing students to develop
a unique skill set while completing their
undergraduate or graduate accounting degrees.
Opportunities to allow students to work in real
world environments do not come along often.
JFVP allows faculty to take students out of a
sterile classroom environment to perform as
forensic accountants. Through this experience,
students will not just talk about how forensic
accounting is done, but they will confront real
world complications in investigating white collar
crime. This experience simply cannot be
replicated anywhere. Whether or not a student is
interested in forensic accounting as a career,
the techniques and the mindset necessary to
perform a successful investigation will serve
them well throughout their career. The JFVP is
consistent with the very ideals embodied in a
Jesuit education. For law enforcement
agencies... This program will provide a
much-needed resource for law enforcement.
Currently, large numbers of cases cannot even be
investigated to determine if a fraud occurred,
much less to establish a loss amount for
prosecution. This leads to large numbers of cases
languishing due to a lack of resources. JFVP will
allow law enforcement to expand the number of
cases under investigation, without requiring an
expansion of resources. Increasing the number of
cases being investigated, and ultimately
prosecuted, means a greater opportunity for
justice for a greater number of victims.
THE PILOT PROGRAM... The project will
begin with a forensic accounting lab course at
Gonzaga University where a select group of
students will be assigned to teams that are
supervised by Gonzagas Masters of Accounting
program faculty and by mentors from the Spokane
Chapter of the Association of Certified Fraud
Examiners as they investigate the allegations
from cases referred by law enforcement. THE
LONG-TERM PLAN... Even more exciting, Gonzaga
would like to develop the program into a full
Center for Forensic Accounting. Money could be
raised for the Center from a variety of sources,
including community groups, various governmental
and foundation grants, and private donors. It is
also possible that the courts in which JFVP cases
are prosecuted may direct restitution be paid to
the program (much like victims obtain restitution
for the cost of a CFE examination as part of
their loss from the crime). Ideally, a full-time
staff member would supervise student
investigations, creating a permanent touchstone
as the program progresses year-to-year to provide
continuity. Such a Center would not only house
the JFVP, but create a venue for a forensic
accounting research specialization.
FOR VICTIMS... The cost of obtaining a fraud
examination by a Certified Fraud Examiner (CFE)
is often prohibitive for victims. JFVP can help
them obtain justice where fraud occurred and they
suffered financial harm. Without this project,
the large volume of financial fraud cases
confronting scarce law enforcement resources
might leave the victims of financial fraud
without the resources and assistance needed to
pursue the perpetrators of the fraud through
forensic accounting. FOR STUDENTS JFVP will
provide invaluable real-world experience in
forensic accounting, allowing students to develop
a unique skill set while completing their
undergraduate or graduate accounting degrees.
Opportunities to allow students to work in real
world environments do not come along often.
JFVP allows faculty to take students out of a
sterile classroom environment to perform as
forensic accountants. Through this experience,
students will not just talk about how forensic
accounting is done, but they will confront real
world complications in investigating white collar
crime. This experience simply cannot be
replicated anywhere. Whether or not a student is
interested in forensic accounting as a career,
the techniques and the mindset necessary to
perform a successful investigation will serve
them well throughout their career. The JFVP is
consistent with the very ideals embodied in a
Jesuit education. For law enforcement
agencies... This program will provide a
much-needed resource for law enforcement.
Currently, large numbers of cases cannot even be
investigated to determine if a fraud occurred,
much less to establish a loss amount for
prosecution. This leads to large numbers of cases
languishing due to a lack of resources. JFVP will
allow law enforcement to expand the number of
cases under investigation, without requiring an
expansion of resources. Increasing the number of
cases being investigated, and ultimately
prosecuted, means a greater opportunity for
justice for a greater number of victims.
THE PILOT PROGRAM... The project will
begin with a forensic accounting lab course at
Gonzaga University where a select group of
students will be assigned to teams that are
supervised by Gonzagas Masters of Accounting
program faculty and by mentors from the Spokane
Chapter of the Association of Certified Fraud
Examiners as they investigate the allegations
from cases referred by law enforcement. THE
LONG-TERM PLAN... Even more exciting, Gonzaga
would like to develop the program into a full
Center for Forensic Accounting. Money could be
raised for the Center from a variety of sources,
including community groups, various governmental
and foundation grants, and private donors. It is
also possible that the courts in which JFVP cases
are prosecuted may direct restitution be paid to
the program (much like victims obtain restitution
for the cost of a CFE examination as part of
their loss from the crime). Ideally, a full-time
staff member would supervise student
investigations, creating a permanent touchstone
as the program progresses year-to-year to provide
continuity. Such a Center would not only house
the JFVP, but create a venue for a forensic
accounting research specialization.
FOR VICTIMS... The cost of obtaining a fraud
examination by a Certified Fraud Examiner (CFE)
is often prohibitive for victims. JFVP can help
them obtain justice where fraud occurred and they
suffered financial harm. Without this project,
the large volume of financial fraud cases
confronting scarce law enforcement resources
might leave the victims of financial fraud
without the resources and assistance needed to
pursue the perpetrators of the fraud through
forensic accounting. FOR STUDENTS JFVP will
provide invaluable real-world experience in
forensic accounting, allowing students to develop
a unique skill set while completing their
undergraduate or graduate accounting degrees.
Opportunities to allow students to work in real
world environments do not come along often.
JFVP allows faculty to take students out of a
sterile classroom environment to perform as
forensic accountants. Through this experience,
students will not just talk about how forensic
accounting is done, but they will confront real
world complications in investigating white collar
crime. This experience simply cannot be
replicated anywhere. Whether or not a student is
interested in forensic accounting as a career,
the techniques and the mindset necessary to
perform a successful investigation will serve
them well throughout their career. The JFVP is
consistent with the very ideals embodied in a
Jesuit education. For law enforcement
agencies... This program will provide a
much-needed resource for law enforcement.
Currently, large numbers of cases cannot even be
investigated to determine if a fraud occurred,
much less to establish a loss amount for
prosecution. This leads to large numbers of cases
languishing due to a lack of resources. JFVP will
allow law enforcement to expand the number of
cases under investigation, without requiring an
expansion of resources. Increasing the number of
cases being investigated, and ultimately
prosecuted, means a greater opportunity for
justice for a greater number of victims.
JUSTICE FOR FRAUD VICTIMS PROJECT (JFVP)
JUSTICE FOR FRAUD VICTIMS PROJECT (JFVP)
The Justice for Fraud Victims Project (JFVP) is
a joint partnership of state, local and federal
law enforcement officials, local Certified Fraud
Examiners (CFEs), and Gonzaga University students
and faculty formed to assist victims of fraud in
the Inland Northwest. JFVPs goal is to assist
victims of suspected financial fraud in cases
where forensic investigative services are limited
or too costly. With the assistance and oversight
of CFEs and state and federal law enforcement,
the students will become a force multiplier for
victims in establishing the method by which a
fraud was perpetrated and in quantifying the
damages so the case can be prosecuted. At the
same time, accounting students will obtain real
world experience in the field of forensic
accounting. Eventually, JFVP hopes to develop and
establish a full Center for Forensic Accounting
at Gonzaga University to perpetuate this mission.
JUSTICE FOR FRAUD VICTIMS PROJECT (JFVP)
The Justice for Fraud Victims Project (JFVP) is
a joint partnership of state, local and federal
law enforcement officials, local Certified Fraud
Examiners (CFEs), and Gonzaga University students
and faculty formed to assist victims of fraud in
the Inland Northwest. JFVPs goal is to assist
victims of suspected financial fraud in cases
where forensic investigative services are limited
or too costly. With the assistance and oversight
of CFEs and state and federal law enforcement,
the students will become a force multiplier for
victims in establishing the method by which a
fraud was perpetrated and in quantifying the
damages so the case can be prosecuted. At the
same time, accounting students will obtain real
world experience in the field of forensic
accounting. Eventually, JFVP hopes to develop and
establish a full Center for Forensic Accounting
at Gonzaga University to perpetuate this mission.
The Justice for Fraud Victims Project (JFVP) is
a joint partnership of state, local and federal
law enforcement officials, local Certified Fraud
Examiners (CFEs), and Gonzaga University students
and faculty formed to assist victims of fraud in
the Inland Northwest. JFVPs goal is to assist
victims of suspected financial fraud in cases
where forensic investigative services are limited
or too costly. With the assistance and oversight
of CFEs and state and federal law enforcement,
the students will become a force multiplier for
victims in establishing the method by which a
fraud was perpetrated and in quantifying the
damages so the case can be prosecuted. At the
same time, accounting students will obtain real
world experience in the field of forensic
accounting. Eventually, JFVP hopes to develop and
establish a full Center for Forensic Accounting
at Gonzaga University to perpetuate this mission.
4
Justice for Fraud Victims Project

• Overview of JFVP
• Overcoming Challenges
• Case Selection
• Fraud Examples
• Future of the project

5
Overcoming Challenges

• Resources
• Faculty time and expertise
• CFE mentors
• Time limit of students (one semester)
• Location to secure evidence
• Materials (binders, copies, laptops, etc.)
• Case Selection
• Expert witness testimony

6
Overcoming Challenges

• Confidentiality
• Location to secure evidence, meeting space
• Students, CFE mentors
• Media questions
• Victim presentations
• Written forensic examination reports
• For audit trail
• For law enforcement or prosecutors
• For victims

7
Overcoming Challenges

• Outcomes assessment
• Academic what will students learn?
• Victims are they helped?
• Continuity of project
• Funding
• Staffing (internal, external)

8
Justice for Fraud Victims Project

• Overview of JFVP
• Overcoming Challenges
• Case Selection
• Fraud Examples
• Future of the project

9
Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

10
Police Intake Reports

• Vary by jurisdiction
• May include other crimes
• Embezzlement
• Theft and Larceny
• Includes traditional burglary
• Forgery
• Identity Theft and/or Mail Fraud
• Longer statute of limitations (in Washington)

11
Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

12
Willing Victim

• Willing to come forward
• Risk embarrassment from publicity of a trial
• Provide documents and information
• Bank and credit card statements
• Accounting records
• Vendor invoices
• Bank reconciliations
• Datebooks, calendars
• Copies of checks
• Take time to identify forgeries

13
Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

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Multiple layers of fraud

• Check forgery
• Credit card fraud
• Use company cards for personal expenses
• Pay personal credit cards with company funds
• Skimming
• Misuse of company assets (theft)
• Petty cash theft
• Pay personal expenses with company funds (larceny)

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Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

16
Evidence

• Must have documentation
• Impossible to trace cash
• No cash register ? no audit trail
• Can be difficult to obtain information on
  suspects bank accounts or credit cards
• May need subpoenas or search warrants

17
Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

18
Case Selection

• Benefit to local community
• Non-profit organizations
• Small business owners
• Victim cannot otherwise afford examination
• Potential improvements in internal control
• Possible deterrent effect in community

19
Case Selection

• Wording on Police intake reports
• Willing Victim
• Multiple layers of fraud
• Evidence
• Benefit to local community
• Statute of limitations

20
Justice for Fraud Victims Project

• Overview of JFVP
• Overcoming Challenges
• Case Selection
• Fraud Examples
• Future of the project

21
Justice for Fraud Victims Project

• Overview of JFVP
• Overcoming Challenges
• Case Selection
• Fraud Examples
• Future of the project

22
Future of the JFVP

• Gonzaga University
• Center for Forensic Accounting
• Funding (grants, restitution, donations?)
• Potential Expansion
• Other jurisdictions
• Other cities
• Other schools
• Best Practices for success

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Best Practices for success

• Assemble a project team
• Law enforcement
• University
• ACFE chapter
• Additional resources (FBI, IRS, DOJ, etc.)
• Recognize the time commitment
• Volunteers
• Faculty and students
• Law enforcement
• victims

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Best Practices for success

• Have reasonable expectations
• Caseload
• Volume of documents
• Potential for restitution
• Dollar level of fraud
• Benefit to community
• Expect the unexpected

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Video clip

• http//www.krem.com/home/College-crimefighters-903
  01467.html