1. Immediate Issues & Tasks after the discovery of Occupational Fraud March 17, 2016

2.  My business appears fine… BUT  No idea where the profits went…  Things just don’t add up  I leave all the details to my trusted office manager Your client tells you

3.   Entrepreneur knows their business (doctor, lawyer, plumber)   Entrepreneur is not a business manager   Entrepreneur hires an office manager Background

4.  Business not doing as well as in the past  Client suspects error or mistakes  Client notices changes in behavior Client says they may have a Problem What’s going on ???

5.  Client notices employee misconduct  Client has “proof” against employee  Client has confronted his suspect  Denial  Confession  In conclusive / explanation Client says they DOES have a Problem

6.  Where do we go from here?  What does you client want to do?  What are you going to recommend? Victims Attorney knows there has been misconduct

7. Actions to be managed  Stop the bleeding  Preserve evidence  Return to normal operations  Recovery of Assets

8. Decisions to be made  Who should do the investigation  Does client have expertise to investigate  Does your law firm have the expertise  Where do you get the expertise  How to proceed  Informal / negotiations  Civil Action  Criminal prosecution

9. The Investigation  Preserving Evidence  Business Records  Business specific docs (shipping/receiving/invoices)  Surveillance video  Communication records  E-mail  Voice Mail  Cell Phone  Paper

10. Investigation – Continued  Internal Financial Records  Paper  Bank statements  Contracts  Financial statements  Electronic  Computerized Accounting  Documents images  Audit trail

11.  External financial records  Bank documents  Bank Surveillance Investigation - Continued

12.  People to interview  Evidence to evaluate  Reports to be written  Testimony as needed  Expert witness as needed Organizing the Investigation Get Organized

13.  Banks  Broker  Non-Bank Financial Institutions  Tax Preparer Services  Title / Escrow Companies  Dealers Where to Find It

14.  “This is a civil problem”  “We don’t have the resources”  “This is not a priority case”  Police generally hate to do “paper cases”  Time consuming  Requires special skills  If you bring them a complete investigative report, they will send it to the DA for review What to expect from Police

15. These are not on topic but may be of interest  A Behind the Scenes Look at the Bank Secrecy Act  Mitigating the Risk of Emerging Payment Systems Free on my web-site This is an ON-TOPIC separate presentation Small Enterprise Embezzlement – “Trust but Verify” (Reagan) All are available on my web-site www.LeonardFraud.com

16. 1415 Fulton Road #205-222 Santa Rosa, CA 95403 707-755-1684 Michael @ LeonardFraud.com www.LeonardFraud.com Retired