1. Using the Internet to Investigate Fraud
William N. Dilla, CPA, Ph.D.
December 17, 2010

2. Person of the Year 2010

3. Presentation Objectives
We will learn about:
Using the Internet to develop a predication of fraud
How a fraud investigators might use the Internet
Using the Internet for background checks
Protecting one’s self on the Internet

4. Two Fraud Triangles The “motivation triangle” The “element triangle”
Pressure / Incentives
Opportunity
Attitude / Rationalization
The “element triangle”
Theft Act
Concealment
Conversion

5. The Motivation Triangle
Pressure / Incentives
Living beyond means
Vice (gambling, drugs, etc.)
Financial Emergencies
Bonuses or stock options (financial reporting fraud)
Opportunity
Poor internal controls
Override of internal controls
Collusion
Attitude / Rationalization
Dishonest individual
“Everyone else is doing it”
“They owe it to me”
“I’ll just borrow the money”

6. The Element Triangle Theft Act Concealment Conversion
Rarely observed directly
Concealment
Often causes anomalies, investigate with:
Analytical procedures
Data mining
Examination of documents
Conversion
Sales of stolen assets
Living beyond means
Investigate with wealth analysis
Perpetrator brags to others

7. Where can the Internet assist with fraud investigation?
Motivation triangle
Pressure / Incentives
Opportunity
Attitude / Rationalization
Element triangle
Theft Act
Concealment
Conversion

8. Aviva, USA Case
Exercise: Pretend you are an investigator who has just discovered a predication of fraud involving Phyllis and Marla Stevens. Perform an Internet search to gather information supporting your case.

9. Additional Information for Stevens’ Case
Current residence
Des Moines, IA
Previous residence
Indianapolis, IN

10. Aviva, USA Case Alleged $5.9 million fraud over four years
Used terminated employee identity to generate fraudulent commission payments
Another Aviva employee noticed a discrepancy (“accidental” discovery)
Alleged perpetrator (Phyllis Stevens) and spouse (Marla Stevens) owned considerable property and had made substantial political contributions
Substantial cash withdrawals made before alleged perpetrator’s arrest

11. Categories of Available Information
Free websites
Proprietary websites
Databases only accessible to law enforcement

12. Starting Point—General Purpose Sites
google.com
bing.com
yauba.com
Privacy safe
Allows search by source type (e.g., news, images, document type)
Easy to navigate
Learn how to use advanced features

13. People Search Sites spokeo.com zabasearch.com / intelus.com pipl.com
Notoriously inaccurate!
zabasearch.com / intelus.com
These two are linked
Better quality sites, costs to get information
pipl.com
“Deep web search” engine
Shows links to other sites
peekyou.com
Provides links to multiple sites
others??
search term “people search sites”
Exercise: find yourself on one of these sites

14. News Sites Free resources Proprietary resources
factiva.com
nexis.com
Public and college libraries

15. Auction Sites
ebay.com
craigslist.com
searchtempest.com

16. Photo / Video Sites flickr.com picasa.com
images.google.com / images.bing.com
youtube.com
video.google.com

17. Blogs technorati.com icerocket.com
Icrerocket also for searching social networks, images

18. Social Networks linkedin.com twitter.com facebook.com
weddingchannel.com
lococitato.com
Shows maps of relationships between facebook users

19. What if the information you’re looking for is “private”?
“Friend” person
Attempt to
What if you don’t want to use your real identity?
See next slide

20. Pretexting Private investigators will set up “fake” accounts
For fun, look up:
Jorge Beale
Jinger Rytand
NOT a strategy for non-professionals!

21. Background checks on the Internet
New hires
New clients
Free sources
Many of the sources we’ve discussed already, plus:
Is the job candidate’s online information the same as what they gave you?
See “LinkedIn’s top 10 overused resume phrases” at CNN.com

22. Other Background Check Resources
Partly free
Individual information
BRB Publications
Business information (Dun and Bradstreet)
Charity information
Entirely fee-based
Personal information summary
Online background check

23. Protecting Yourself
“Opt-out” of background check information possible, but not easy
Proprietary privacy services available
Social networks, blogs, etc.
Set privacy settings
Careful who you friend
Careful what you share!!!
See “The internet and the end of privacy” at CNN.com

24. Summary Internet searches useful for:
Preliminary fraud investigation
Basic background checks
Hire a professional for more involved investigations
Be careful what you post and who you friend!
For more on this topic:
Cynthia Hetherington
Look under “Training”
Electronic version of this presentation: