Presentation on theme: "Using the Internet to Investigate Fraud William N. Dilla, CPA, Ph.D. December 17, 2010."— Presentation transcript:
Using the Internet to Investigate Fraud William N. Dilla, CPA, Ph.D. December 17, 2010
Person of the Year 2010
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
Two Fraud Triangles The “motivation triangle” – Pressure / Incentives – Opportunity – Attitude / Rationalization The “element triangle” – Theft Act – Concealment – Conversion
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”
The Element Triangle Theft Act – 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
Motivation triangle – Pressure / Incentives – Opportunity – Attitude / Rationalization Element triangle – Theft Act – Concealment – Conversion Where can the Internet assist with fraud investigation?
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.
Additional Information for Stevens’ Case Current residence – Des Moines, IA Previous residence – Indianapolis, IN
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
Categories of Available Information Free websites Proprietary websites Databases only accessible to law enforcement
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
People Search Sites spokeo.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
News Sites Free resources Proprietary resources – factiva.com – nexis.com Public and college libraries
Blogs technorati.com icerocket.com – Icrerocket also for searching social networks, images
Social Networks linkedin.com twitter.com facebook.com weddingchannel.com lococitato.com – Shows maps of relationships between facebook users
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
Pretexting Private investigators will set up “fake” accounts For fun, look up: – Jorge Beale – Jinger Rytand NOT a strategy for non-professionals!
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.comCNN.com
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
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.comCNN.com
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: –