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Webinar series from FraudResourceNet LLC on Preventing and Detecting Fraud in a High Crime Climate. Recordings of these Webinars are available for purchase from our Website fraudresourcenet.com This Webinar focused on the subject in the title FraudResourceNet (FRN) is the only searchable portal of practical, expert fraud prevention, detection and audit information on the Web. FRN combines the high quality, authoritative anti-fraud and audit content from the leading providers, AuditNet ® LLC and White-Collar Crime 101 LLC/FraudAware. The two entities designed FRN as the “go-to”, easy-to-use source of “how-to” fraud prevention, detection, audit and investigation templates, guidelines, policies, training programs (recorded no CPE and live with CPE) and articles from leading subject matter experts. FRN is a continuously expanding and improving resource, offering auditors, fraud examiners, controllers, investigators and accountants a content-rich source of cutting-edge anti-fraud tools and techniques they will want to refer to again and again.
Citation preview
"Fraudulent Documentation: Fraudsters’ Secret Weapon
... How to Disarm Them”May 29, 2013
Special Guest Presenter:Robert Baier, Handwriting Services Int’l
Copyright © 2013 FraudResourceNet™ LLC
Copyright © 2013 FraudResourceNet™ LLC
About Peter Goldmann, MSc., CFE
President and Founder of White Collar Crime 101
Publisher of White-Collar Crime FighterDeveloper of FraudAware® Anti-Fraud Training
Monthly Columnist, The Fraud Examiner, ACFE Newsletter
Member of Editorial Advisory Board, ACFE Author of “Fraud in the Markets”
Explains how fraud fueled the financial crisis.
Copyright © 2013 FraudResourceNet™ LLC
About Jim Kaplan, MSc, CIA, CFE
President and Founder of AuditNet®, the global resource for auditors
Auditor, Web Site Guru,
Internet for Auditors Pioneer
Recipient of the IIA’s 2007 Bradford Cadmus Memorial Award.
Author of “The Auditor’s Guide to Internet Resources” 2nd Edition
Copyright © 2013 FraudResourceNet™ LLC
Robert Baier Introduction
Bob Baier is a certified handwriting expert and a certified forensic document examiner (CDE)
He has 3 Degrees -- AS, BS, MA. CDE, CHA
Bob is a certified NY State law enforcement instructor and trains in the areas of document examination, identity theft, bogus checks, statement analysis, the criminal mind and handwriting as well as overall handwriting analysis.
Mr. Baier has been on live radio nationally and has been on the Television Shows “Inside Edition” and “Law Talk TV”. In Sept 2005 he was featured in ESPN magazine for an analysis he did regarding an extreme sport athlete.
Copyright © 2013 FraudResourceNet™ LLC
Introduction cont’d
Bob is the author of the book “Identity Theft – Prevention for the College Student.” This is considered by some to be “The finest and most complete book on the market today regarding Identity Theft and the easiest to read with its conversational style.” Cecile Moore N. Attleboro, MA. This book has been used to train law enforcement in at least four different states.
Bob’s new book, “GPS for Success (Goals and Proven Strategies)” is co-authored with Steven Covey author of the book “7 Habits of Highly Effective People”, Dr. John Gray author of the book “Men are from Mars Women are from Venus” and Les Brown nationally known speaker and author.
Bob is one of only 3 people in the country who can do training on both Statement Analysis and Handwriting Analysis.
Copyright © 2013 FraudResourceNet™ LLC
Webinar Housekeeping
This webinar and its material are the property of FraudResourceNet LLC. Unauthorized usage or recording of this webinar or any of its material is strictly forbidden. We will be recording the webinar and you will be provided access to that recording within 5-7 business days after the webinar. Downloading or otherwise duplicating the webinar recording is expressly prohibited.
Please complete the evaluation to help us continuously improve our Webinars.
Unless you are participating in a group that is viewing this Webinar on a common computer screen, you must answer the polling questions to qualify for CPE per NASBA.
Submit questions via the chat box on your screen and we will answer them either during or at the conclusion.
If GTW stops working you may need to close and restart. You can always dial in and listen and follow along with the handout.
Copyright © 2013 FraudResourceNet™ LLC
Disclaimers
6
The views expressed by the presenters do not necessarily represent the views, positions, or opinions of FraudResourceNet LLC (FRN) or the presenters’ respective organizations. These materials, and the oral presentation accompanying them, are for educational purposes only and do not constitute accounting or legal advice or create an accountant-client relationship.
While FRN makes every effort to ensure information is accurate and complete, FRN makes no representations, guarantees, or warranties as to the accuracy or completeness of the information provided via this presentation. FRN specifically disclaims all liability for any claims or damages that may result from the information contained in this presentation, including any websites maintained by third parties and linked to the FRN website
Any mention of commercial products is for information only; it does not imply recommendation or endorsement by FraudResourceNet LLC
Copyright © 2013 FraudResourceNet™ LLC
Today’s Agenda
Introduction: Fraud Statistics: A Growing Fraud Threat
Auditing for Fraud: Standards & Essentials
Writing Habits
Bogus Checks
Numbers
Request Writing DDI
Anonymous/Disguised Writing Your Questions Conclusion
Copyright © 2013 FraudResourceNet™ LLC
Fraud: The Big Picture
According to major accounting firms, professional fraud examiners and law enforcement:
Fraud jumps significantly during tough economic times
Business losses due to fraud increased 20% in last 12 months, from $1.4 million to $1.7 million per billion dollars of sales. (Kroll 2010/2011 Global Fraud Report)
Average cost to for each incident of fraud is $160,000 (ACFE) Of Financial Statement fraud: $2 million
Approx. 60% of corporate fraud committed by insiders (PwC)
Approx. 50% of employees who commit fraud have been with their employers for over 5 years (ACFE)
Copyright © 2013 FraudResourceNet™ LLC
The Auditor’s Role
IPPF Standard 1210.A3 Internal auditors must have sufficient knowledge of…available technology based audit techniques to perform their assigned work
Copyright © 2013 FraudResourceNet™ LLC
Deception and Writing
Copyright © 2013 FraudResourceNet™ LLC
Common Documents Subject to Fraud, Forgery, Crime etc.
Wills, Deeds, Company Contracts, Checks, Mortgages, Financial Statements (car dealerships), Vendor Disputes, Receipts, Office Memos, Notes, Writings on Bathroom Walls, Inside Company Trucks and more.
Copyright © 2013 FraudResourceNet™ LLC
Document Examination
Writing is a learned skill
We learn through repetition (until a habit)
Every mature writer has his own set of unique handwriting habits
These are unconscious habits
Then compare the writing habits of the two writers
Natural variation in writing (range)
Copyright © 2013 FraudResourceNet™ LLC
Polling Question 1
Writing is a learned skillA. True
B. False
C.
Copyright © 2013 FraudResourceNet™ LLC
Bogus Checks
You can examine 7 things in only 10 seconds concerning the check itself -- to determine if it is real.
We are not talking about looking at any writing on the check.
Where exactly on the signature line do yousign your name.
No such thing as a signature line on a check.
Copyright © 2013 FraudResourceNet™ LLC
Check Signature Line
Copyright © 2013 FraudResourceNet™ LLC
Perforation
All “real” personal checks have a perforation on one of the 4 sides.
Only exceptions are some payroll checks and government checks.
Copyright © 2013 FraudResourceNet™ LLC
Microprinting
Copyright © 2013 FraudResourceNet™ LLC
Front of Check
Copyright © 2013 FraudResourceNet™ LLC
Back of the Check
Copyright © 2013 FraudResourceNet™ LLC
Numbers
Our numerals are based on the Arabic numerals.
Formation of numerals is part of penmanship training
Numbers are rarely disguised
Writers don’t realize that numbers are identifiable
Copyright © 2013 FraudResourceNet™ LLC
Numbers
Types of fraud cases involving numbers:
Raising the amount of a negotiable instrument
Doctoring the books in embezzlement cases
Forged or counterfeit checks.
Identification of a writer by his numbers
Copyright © 2013 FraudResourceNet™ LLC
Numbers
Raising the amount of a negotiable instrument
Copyright © 2013 FraudResourceNet™ LLC
Polling Question 2
The numbers we use are based on ________
NumeralsA. Latin
B. Arabic
C. American
D. Roman
E.
Copyright © 2013 FraudResourceNet™ LLC
Embezzlement
Copyright © 2013 FraudResourceNet™ LLC
Altered Documents
Copyright © 2013 FraudResourceNet™ LLC
Check Washing
Some chemicals are used on checks to erase all of the ink. “Washing”
Washed checks have a slimy feel.
Side lighting will show differences in “sheen”
Use “Uni ball Signo 207 Pen”
Copyright © 2013 FraudResourceNet™ LLC
Identifying a Writer by Numbers
Because people are creatures of habit, they can be identified by the way that they separate their numbers when writing dates. Slashes, Dashes, Spacing
Number formations can be identified
Copyright © 2013 FraudResourceNet™ LLC
Anonymous/Disguised Writing
70% of Anonymous writings in the workplace are female
Worst language and most offensive drawings are also females
25% of Anonymous writings in the workplace are done by the person reporting the incident
#1 change is Slant then Capital letters
Cursive to Printing or vice versa
Start from the back and work forward
Copyright © 2013 FraudResourceNet™ LLC
Proportions
Copyright © 2013 FraudResourceNet™ LLC
Request Writing
Dictate, Duplicate and Isolate
Create Words for Combos and Connect.
Copyright © 2013 FraudResourceNet™ LLC
Fredie Forger
Copyright © 2013 FraudResourceNet™ LLC
Polling Question 3
______ percent of anonymous writing in the workplace is by females
A. 50%
B. 25%
C. 70%
D. None of the above
E.
Copyright © 2013 FraudResourceNet™ LLC
Is this a photocopy of an original receipt?
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Handwriting Analysis
Brief history
Handwriting is brain writing
Handwriting is a science
Graphology/Handwriting Analysis
Forensic document examiner (testifies in court)
Copyright © 2013 FraudResourceNet™ LLC
Uses of Handwriting
Forgery Detection
Law Enforcement (profiling depts)
Job Placement (5000 US)
Jury Selection
Tenant Selection
Copyright © 2013 FraudResourceNet™ LLC
Uses of Handwriting (cont’d)
Self Improvement
Grapho-Therapy
Relationship Compatibility
Help Children
Disease Detection
Copyright © 2013 FraudResourceNet™ LLC
Europeans
European Countries use handwriting analysis extensively
US Customs Agent
Copyright © 2013 FraudResourceNet™ LLC
Taking Statements
If you can “weed out” fraud suspects you will save time. “Speed Read” your suspects.
Change your statement sheet. Same heading with directions but where they write should be a blank paper with no lines.
Office personnel help out
Copyright © 2013 FraudResourceNet™ LLC
Polling Question 4
Handwriting analysis is useful for which of the following…
A. Law Enforcement (profiling depts)
B. Job Placement (5000 US)
C. Jury Selection
D. All of the above
E.
Copyright © 2013 FraudResourceNet™ LLC
Statement Analysis Training
Personal Vocabulary
25-50-25 story
Try to Tell the Truth
Writing Changes When Lying
Copyright © 2013 FraudResourceNet™ LLC
The Criminal Mind
Copyright © 2013 FraudResourceNet™ LLC
The Criminal Mind
No Margins – live with no boundaries
X’s at baseline-thinking about death
Smiley face – deception, do not trust
Covering or scratching things out – deceit
If obscure name-do not trust
Copyright © 2013 FraudResourceNet™ LLC
Criminal Mind
Copyright © 2013 FraudResourceNet™ LLC
Criminal Handwriting Traits
Copyright © 2013 FraudResourceNet™ LLC
Polling Question 5
Covering up or scratching out portions of written documents is often a sign of…
A. Correction of honest errors
B. Deceit
C. Professional editing
D. None of the above
E.
Copyright © 2013 FraudResourceNet™ LLC
Covered a Lot
Handwriting Habits, Bogus Checks, Numbers, Request Writing, Anonymous, Disguised Writing, Hate Crimes, Tremor, Criminal Mind, Identity Theft etc.
Diff. Between Doc. Exam and Handwriting Analysis
Copyright © 2013 FraudResourceNet™ LLC
Resources
Book – Forensic Handwriting Examination
www.reedwrite.com/publication.html
808 528-1112 (Hawaii)
Taking Statements – Miranda Fitchette
www.forgeryexaminer.com
www.handwritinguniversity.com
Copyright © 2013 FraudResourceNet™ LLC
Questions?
Any Questions?Don’t be Shy!
Copyright © 2013 FraudResourceNet™ LLC
Thank You!
Website: http://www.fraudresourcenet.com
Jim KaplanFraudResourceNet™
800-385-1625 [email protected]
Peter GoldmannFraudResourceNet™
Copyright © 2013 FraudResourceNet™ LLC
Thank You
Bob Baier
Forensic Document Examiner
www.expertdocumentexaminerweb.com
1-888-460-3828
Copyright © 2013 FraudResourceNet™ LLC
Coming Up Next Month
"An Expert’s Advice on Establishing an Organization Wide Fraud Policy” on June 5
"How to Catch Expense Reimbursement (T & E) Cheaters Using Data Analysis"Effective Anti-Fraud Controls, on June 18
"Ethics for Auditors: Understanding Current Issu es in Financial Integrity” on June 26 http://www.fraudresourcenet.com
Copyright © 2013 FraudResourceNet™ LLC
Check Fraud Detection Tools
Copyright © 2013 FraudResourceNet™ LLC
Check Fraud Detection Tools