FraudJournal Blog

April 24, 2013

ZeekRewards – How The Cons Play on Fears and Hope

Filed under: Uncategorized — fraudjournal @ 5:21 PM
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Mitch Weiss, PA Writer at USAToday, posted an article “ZeekRewards scam leaves N.C. town millions poorer“, on March 30th this year to share the pain and embarrassment of the residents of Lexington, North Carolina. In this touching article there are the warnings, voiced anger and frustration, and lessons of how fraudsters repeatedly use various scams on the public. The key word of choice from all victims is “…we trusted…” him or her or the company or the family.

Trust is a word that comes from the source of our soul. It is what we use to describe a direct connection to any person, place or event we choose to open ourselves towards, and here is the caveat, with an anticipated return or reward for this ‘trust’. Unfortunately, the very nature of trust indicates that any return is actually not promised; it is solely in the hand of those or the individual we trust. We trust our family, friends, neighbors, employers or employees and the list go on. Which brings me to my point; why do we do this? Have we become so disconnected from our instincts that we are unable to see the snake in the grass, the odd reflection in the mirror, or the subtle nature of the predator in wait.

Any investigator will tell you that truth is like fake gold; the shimmer albeit indicative of gold is not the promise of gold. Truth requires both patience and quiet of mind to hear it. It is that quiet glint that says to you, wait…you need to check this again. One of the victims in this article thought she had done her due diligence. She drove to the location to verify it was indeed a valid business entity and saw the line outside the door of people willing to offer funds to invest while the getting was good. But here in lies the rub, her first instinct was right, her second action was not based on instinct but on desire to join the crowd. And cons love crowds. Why? Because crowds are easier to control. Because collectively they become the bait-ball that predators can take a run at.

Much like the great Ponzi scams of the century, once the fraudster is caught, they will always say, “…you shouldn’t have let it get this far”. And they are right. But only on that point, they are still accountable for their actions and not our gullibility. However, there is always someone who cries “…the Emperor has no clothes on!” And they are quieted or ignored because we seek the lucky find that changes our lives and makes life easier to live. Its more fun to boast we struck it rich than do the work.

So I ask you then, is a mindful life really that difficult? Are we that fearful of poverty or keeping up with the world or the lack of opportunity that we are driven like lemmings to follow the barker of the carnival of promises and cures? When are we as the general public also responsible for our unwilling to slow down and ask the hard question; what is impulsing me to take this chance? What am I risking? And does the rush of my fellow friends and family a good thing or a fear of missing out.

It is sad that when we are down in the spirit, hurting and in need of hope that some group or individual offers the promise of false hope at the cost of our hearts. However, in times of broken hearts or wishful thinking, this is the most important time for us to stop, look, listen to our heart of hearts and ask the hard question…what impulse am I following.

Be safe my colleagues and friends. There are no promises of fame and fortune. What we sow we shall surely reap. It may take time if we dawdle here and there, but the universe can only send us what our hearts ask for – an easy ride with no foundation or the gradual and stable building of a future.



April 13, 2013

What Makes a Fraud Investigator a Professional – Experience or Education

Fraud Fighters Become Cool!

As the economy continues to sequester most of us, fraudsters seem to be engaged in an all out frenzy of activity. Today you can’t seem to get away from reports of economic losses caused by embezzlers, identity thieves and scams on the vulnerable. This has resulted in a public outcry of “not on my watch.” And the response is government agencies, such as the IRS and FBI, are hiring people proficient in IT and financial fraud. Companies now search for individuals trained in fraud-risk-compliance. So who are the next wave of fraud professionals? Where are they coming from? And, how does this effect those of us already in the trenches?

First, the next wave are a mixed set of young professionals and re-established professionals. Many are students who have been drawn in by television shows such as CSI, NCIS, Bones and the numerous real-life drama shows on forensics and assorted documentaries. Others are established professionals that are either looking forward to making a career change, enhancing their current position or putting out a shingle as self-employed. What was once a profession of unknown behind the scene investigators has become the “now” profession. I am often asked about fraud fighting and how to get into the field. Most of my answers tend to result in raised eyebrows or dropped heads of frustration once they learn that the road requires not just a degree, but years of work and life experience and a high level of intuition and common sense. It’s not glamorous and a win every time. There are no hero medals and it’s tedious and requires high attention to detail. Something which I find many young professional are frustrated with in the beginning.  If you Google what it takes to be an expert, you find it takes close to 10,000 hours of practice or work experience for anyone to become considered an expert in their field of choice.

Second, quite a few colleges challenge this by advertising they can get you there with a degree in forensic accounting, criminology or fraud expertise. Many students are now able to earn their business or accounting degree with an emphasis in fraud. Some earn a certificate or added credential/degree in fighting fraud. I endorse educating the masses on how to thwart the creativity of thieves but it does not replace experience.

Learning the theory of detecting, deterring and defending against fraud provides a good base from which to launch the beginning of a career through internships and mentored case work. Expertise allows one to think outside of the box because experience has repeatedly engrained their understanding to a level that is second nature while maintaining their ethics to work within the required rules and regulations. And with time and diversity of experience, either across the board or in a specific arena of understanding, there remains the levels of novice, advanced, master and expert.

I Have a Point – Honest…

Here is my point; fraud work is a field that requires not just classroom education but repeated experience, careful mentoring and the passion to roll up ones sleeves, get into the dirt of the devil’s activity and all the while remain clinical. It is about making a difference while serving the public.  As individuals seek out the next trend in careers, they look for what brings income while raising peer acceptance. Young professionals seek out the career goals that take them forward in both income and position. And those that are stymied by hiring freezes and worse sudden income loss seek out ways to reinvent or augment the current situation. This means that there are many more people focusing on the world of fraud fighting but lack the necessary level of skills. This concerns me.

This is not about being competitive. It is about the safety of the public including those impassioned to enter the field of fraud fighting. There is a high level of liability that fraud work brings. Technology growth is constantly challenging our knowledge base not to mention the ever-growing level of global connection. The subtleties of culture, ethics and business models come with job maturity and work diversity. Knowing when someone is being polite by not looking you in the eye verses being nervous and avoiding eye contact can change the way investigative interviews are conducted. One must also consider the sequestering  of public agencies and enforcement officers resulting in the near stuttering to a stop of processing growing crimes.

Grassroots Solution?

I would like to challenge state and local government agencies to consider establishing internships for professionals (with proper vetting of course), to handle the back load of financial crime work. I would like to see a community grassroots approach of the educational system with the work programs that allow work experience that offsets educational costs, which would provide serious young professionals the opportunity to gain real-life lessons-learned experience. By establishing a contractual agreement of a time period for and vetting, we could put many individuals into the field with both mature and novice experience together. Establishing a certification program that also requires work experience for credentials and a mentoring process that signs off on professional understanding will provide both work, education and strongly enforced ethical standards for work ethics and case work. It takes the overwhelming level of paperwork and case load to a more manageable level and helps ensure that new professionals are properly trained and given the diversity of case experience.

What are your thoughts? How would you provide a means to education coupled with mentoring and job opportunities while maintaining the high level of expected ethical standards? Sound off!


April 10, 2013

Stealing From the Dead – Time for Change?

Filed under: Uncategorized — fraudjournal @ 1:04 PM

The Annual ID Theft Season

Tis the season to file  your taxes – Hooray. Just kidding. Most of us try hard to avoid this process until the last-minute. This year, Congress took so much time to act that the IRS had to actually rewrite forms, software codes and delay the initial processing of tax returns. This in turn resulted in tax preparers becoming challenged to meet the deadline of April 15th after having lost nearly a month of preparation time; not to mention the allowed delay of brokerages and financial institutions to get out their documents to their clients.

So what has this to do with “stealing from the dead” you ask? If you ask any Enrolled Agent (EA) or Certified Public Accountant (CPA) preparing the annual tax return, they will roll their eyes and become flush with anger that the social security numbers of deceased clients are available to the public for ten dollars from the Social Security Administration.

An Attempt to Stop Fraud Begets Fraud

Unfortunately, what was started to help fight identity fraud has resulted in aiding and abetting fraud. Fraudsters, who seem to hold a wealth of creative talent, have realized that for a nominal fee they can get the social security number of recently deceased individuals, file a fraudulent tax return with a sizable refund and then disappear. Once the spouse or family get around to filing the return, the IRS is unable to honor the second, albeit true taxpayer, the refund of taxes paid. The return is processed but without the final step of refund money. And this happens each year and has become a growing problem. It will take an act of Congress, literally, to change this process and you can help. Contact your representatives and congressional representatives to enact the removal of this easily accessible master list from the general public. Sound off!  Make it a grass-roots action!

Here are some links to review for more information.

April 3, 2013

Pursuit Magazine’s “Thirty Rules to Live by for Private Investigators”

Filed under: Uncategorized — fraudjournal @ 12:44 PM

I find great delight in sharing insights and ‘lessons learned’ from those out in the field. Private Investigators deal with a multitude of information and people on a daily basis. Dealing with clients often requires keen insight into the psychology of emotions and motivation not to mention education of the realistic process of investigation and the costs involved.

Much like their government counterparts, detectives and agents, the process of investigation requires careful attention to detail. The devil is in the details is an often made statement regarding how important it is to be mindful of our policies and procedures during any case of investigation and engagement we encounter. And mindful of how we present our selves to the world. Most business owners often learn the hard way that they must wear multiple hats and not doing so can result in burn-out and worst of all, mistakes.

Please take time to read this list of “Thirsty Rules to Live by for Private Investigators” from Pursuit Magazine as it contains some important information, most of which many of you have already learned the hard way, but if not you have a chance to gain knowledge before any hard knocks hit you from the sidelines. Take care and always be mindful of your choices in life. And thanks to my friend K. Paxton in Oregon for sharing this with me today.



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