This article was originally published in Fraud Magazine – March/April 2015 issue.
“I love getting bad guys — I think that would be so funto do with you!said the prospective job applicant sitting across from me. I’d just asked her why she would want to come to work for my firm.
I considered my next move carefully. “Tell me how you would feel about working for one of those bad guys,” I said. The furrowed brow and crook of her neck indicated that she was perplexed. I obliged her. “Well, in this office we work for white-collar criminals, tax evaders and people sometimes perceived as the ‘bad guys.’ So how would you feel about that?” I asked. I then sat back to observe what her verbal and nonverbal cues would be (I practice my interviewing skills any chance I get, don’t you?). She was suddenly parched, swallowed multiple times and took a deep breath before answering, “I didn’t think you would ever do such a thing. I mean, I guess, well … I always thought of you as someone who worked for the good guys.”
I didn’t hire the applicant.
I had a similar conversation with a fraud examiner over lunch during a recent speaking engagement. She clearly was frustrated by her clients who chose not to prosecute their alleged fraudsters. She told the group at our table about a couple of prosecutions that had resulted in the alleged fraudster “only having to do community service and a small amount of restitution.” She was physically and emotionally upset about these outcomes. My curiosity got the better of me and I asked, “Why does this bother you so much?” She explained that she had put so much work into these cases and it wasn’t “fair” or “right” that these people avoided more formal or significant punishment for their alleged crimes.
I gently reminded her that it wasn’t our job to exact punishment. Most importantly, our own ACFE Code of Professional Ethics expressly prohibits us from opining on a person’s guilt or innocence. She acknowledged this, but I pressed further. How many defense cases have you worked? The reaction from her was similar to my job applicant. “None!” she said. “I don’t see how I could ever defend someone who had committed a fraud!”
Encounters such as these aren’t uncommon. Admittedly, they’re delicate conversations — often ones that those of us in private practice discuss in private.
ACFE training is unlike any other. If you want to be a fraud examiner, there’s no better place to get your education, training and credential (and I don’t say this just because I’m an ACFE faculty member and member of the Board of Regents). However, the training applies to both sides. In my own private practice, there’s plenty of room and good reason to work defense cases. In fact, the work is similar no matter what side you’re working on.
If you’re considering how or whether to take on defense cases, read on.
Consider your ability to be impartial
Discovering “why” you’re doing your job is important (it certainly makes going to work every day easier). A predisposition to “get” a bad guy can be a detriment in a case and can place blinders on a fraud examiner who might see questionable documentation as a crime — when in fact it’s only red flags of fraud. Zealotry could lead to unnecessary work, false accusations, inaccurate employment-related decisions and potential liability, which can then harm the client or others.    
Consider a recent case of mine. A woman (I’ll call her Betty) had worked 30 years as the office manager for my client’s medical practice. A new physician-partner in the group was trying to get up to speed, so he asked Betty for bank records, financial statements and other standard documents. She refused. An office-sized firestorm ensued. Doctors took sides, and accusations flew among staff members even though they didn’t yet have any real information.
I walked into the perfect climate for possible fraud: A long-term trusted office manager who never took vacations and who was now refusing to provide simple financial documents.
My interviews discovered that Betty was the sole person responsible for billing insurance companies and patients, collecting funds and taking them to the bank, writing checks, reconciling the bank account, processing payroll and managing the financials. Sounds familiar? Surely I would find fraud, right?
We scoured the bank statements, canceled checks and payroll records. We didn’t find any fraudulent disbursement schemes. We searched the billing system and analyzed customer credits. Betty had supported them with appropriate documentation. We traced funds to the bank with no exceptions. After all that, we still didn’t find fraud.
We recommended stopping the investigation, but the medical practice asked us to keep going back further. More records, more expense but still no fraud.
When I finally talked to Betty, she said she had “hurt feelings” when the new physician began asking questions. Why wouldn’t he trust her when she’d worked there for so long and gave all of herself to her job? However, I gently reminded Betty that her sole custody of these funds meant that she was unsafe in her job, and any missing money would point to her. Betty’s demeanor changed immediately, and she was suddenly ready to start offloading some of her responsibilities.
We didn’t take this job as a true defense engagement, but our work resulted in effectively clearing someone who was “on the defense” against potential criminal allegations.
Fraud examiner’s role
As fraud examiners, our roles are the same in plaintiffs’ or defendants’ cases: We’re fact finders. We conduct interviews, examine documents, identify evidence, prepare reports, and, yes, even work on obtaining confessions.
I’ll never forget the first time a defense attorney called me. My firm was new and I, too, thought my role was to go after “the bad guys.” A call from a new attorney, Steve, changed all of that. His client was accused of taking nearly $10 million from a publicly traded company. She was looking at significant jail time. I wrongly assumed he was calling to ask me to “defend her” (i.e. find some angle or story to get the charges dropped). I couldn’t have been more wrong.
“Ms. Couch, I need help here. The government is telling me she’s taken millions. My client is telling me she didn’t, and it can all be explained. I don’t know who to believe.”
Admittedly, the government’s case was terrible. The feds’ work-up of the case was cumbersome and confusing. The CPA firm that’d originally handled the case hadn’t prepared a written report. I accepted the case, and Steve’s client became my client.
I traced millions of dollars of the public company’s funds into our client’s account. I told Steve the facts — what had happened and how. I had no plausible explanation for these funds being in this account. Amazingly, I worked with our client (the defendant) to confess and admit to her wrongdoing. Steve then could negotiate a plea deal with the government. Our client went to prison for many years. And since then, the attorney has brought or referred countless cases to us .
Communicate your role
Some attorneys will want to pay you to testify to certain positions early in cases. Run away. Fast. Not only do I disengage from these matters, I refuse future calls from these people. Clients pay us for our expertise and our time. They don’t pay us for our opinions or for “prescribed” testimony.
Testimony is based on facts and work performed. You don’t need to worry if cases are for “plaintiffs” or “defendants” when you’re clear in your role and responsibilities and you’re able to communicate that role via your engagement letters and in meetings with your clients. You only need to be concerned that you have the resources to perform the work well.
For those of us in private practice, we also have a business reason to take on cases from “both sides.” Opposing counsel is going to immediately question your credentials and experience to see if you’re working for “our side” or the “other.” He’s going to try to infer a perception of bias. But he can’t do that if you have had a healthy balance of clients who are plaintiffs and defendants.
Working for the defense can help you construct better plaintiffs’ cases. You’ll better understand your work, the necessity for simpler and easily comprehended reports, and that all findings need to be documented with evidence.
The ‘why’ of my job
In the decade I’ve had the privilege of calling myself a Certified Fraud Examiner, I’ve discovered my “why”: I work hard for my clients — whether plaintiffs or defendants — who trust me to assist them through what can be the most difficult times in their lives and who thank me for support and expertise.
When we’re able to take complex and confusing information and turn it into clear and concise deliverables, then our clients are able to make educated decisions. When a client thanks you for doing that, you can’t receive a better compliment.