Management Response

A director decided to confront a senior manager about a third party company which he had set up: a plausible explanation was provided and accepted at face value. Six months later, an investigation in another area linked him as one of the ringleaders of a group of employees defrauding the company.

• KEY POINT: Confrontation should occur only when enough evidence is available.

A senior manager was under suspicion and the investigators wanted to search his work area covertly. The Human Resources manager decided that he would conduct the search himself after the employee had gone home, but found no evidence. The employee noticed the search the next day, promptly attempted to destroy evidence hidden on his computer and tipped off his associates by email. Fortunately the investigators were monitoring his email and were able to use forensic techniques to recover the evidence.

• KEY POINT: Professionals should be used when covert investigation is called for.

A manager hired private investigators which he found listed in the Yellow Pages, to conduct carte blanche investigations using techniques which senior management would never have approved; for example, searching the garbage removed from the employees’ home. After a neighbour called the police, the investigators were arrested and charged with theft. The result for the company was civil litigation and adverse national publicity.

• KEY POINT: Competent, ethical investigators should be used. Legal advice and top management approval should be obtained for investigation techniques.

Disclosures in the Fraud-i™ reporting module, as well as during "Understand the Risks" workshops using the Fraud-i™ tool have helped reveal a great deal of sensitive information regarding malpractice and unethical behaviour within organisations.

The results of these findings remain confidential and anonymous.