Concealment and Conversion Welcome to Unit 4 Concealment and Conversion 1

Unit 3 Review Proactive and Reactive Investigations Chapters 6-7 Discussion Board – 2 topic Quiz Seminar We learned how analysis of financial instruments can detect fraud. We looked at surveillance and covert operations as they relate to fraud investigations. Finally, we saw how physical evidence can be used in a fraud investigation 2

Unit 4 Concealment and Conversion Chapters 8-9 Discussion Board – 2 topic NO QUIZ OR EXAM Seminar We’ll see how to identify concealment investigation methods and how they relate to fraud, the importance of obtaining documentary evidence, the importance of learning how perpetrators convert and spend their stolen funds, and how the Internet can assist a fraud investigation. 3

Chapter 9 Short Cases 3-7 All found on pages 264-266 of Chapter 9. UNIT 4 SEMINAR Chapter 9 Short Cases 3-7 All found on pages 264-266 of Chapter 9.

Case number 3 You receive an anonymous tip that your controller is embezzling assets from your company. You begin your investigation by interviewing several employees in the accounting department, who report no unusual behavior or sudden changes in the suspect’s standard of living. One interviewee does report that the controller has gone on a number of extravagant vacations. You perform a net worth analysis, based on a search of public records, and find the following information:

Case number 3 Based on the evidence gathered in your search, what conclusions can you make about the controller? Would you feel comfortable using the evidence above in an interview to obtain a confession? Why or why not? What additional investigating could you pursue to obtain more evidence? 6

Case number 4 Bill James is being investigated for embezzling over $700,000 from ABC Capital Management, for whom Bill has worked for nearly 10 years. When coworkers noticed the new “toys” Bill was buying, they jokingly asked him to tell them his stock picks as they wanted in too! Bill told them that they better adopt some rich relatives. “My Uncle Eddie didn’t have any kids, so he left a chunk of his money to each of his nephews.” Explain how you might go about checking the validity of Bill’s claim to a recent inheritance. Include in your discussion the relevant information you need about Uncle Eddie and where you could find that information. 7

Case number 5 You manage a car dealership in a large city. Many of your sales employees are very successful and have purchased their own vehicles from your dealership. Your dealership finances the sale of some of these vehicles. One employee recently paid off the balances on a couple of new vehicles purchased from your dealership. You discover this information after investigating complaints from customers about this particular employee’s actions. His sales are down, and customer complaints about his attitude abound. He previously worked for two other car dealers, both of which were satisfied with his performance. This employee is in charge of having used cars reconditioned by various automobile repair shops. 8

Case number 5 What signs of unusual behavior and lifestyle symptoms are present in this case? What are some possible causes for them? How might this employee be defrauding the company? 9

Case number 6 Janet Moody is one of XZY Company’s most trusted employees. She never complains about her work and rarely misses work due to illness or vacation. The company has been successful over the years, but is now having cash flow problems. Because of the recent downturn in the company, you take a closer look at all the company’s financial records. When you ask Janet about the recent cash flow problems, she responds, “I don’t know what is going on. I only do the reporting. Ask those who manage the company.” This behavior differs from Janet’s normal pleasant deportment. As you continue your investigation, you discover that the reported financial results do not match what the company is doing, but you can’t determine why. You decide to investigate Janet further. 10

Case number 6 What are some behavior and lifestyle changes that you should look for? What resources can you use to conduct your research? 11

Case number 7 Using the net worth method, analyze the following financial data for potential signs of fraud or embezzlement. 12

Case number 7 Do your results indicate that this person could be committing some type of fraud? If so, why do you think so? What other factors might you consider to determine whether fraud has been committed, other than the final total income from other sources (if any)? Is this scenario realistic? 13

Midterm Project and Essay Exam TIPS Grammar - PROOFREAD Spelling – PROOFREAD Organization Numbers and Bullet points – Notice how the assignments are laid out. Use the bullet points as a checklist—this is how I’ll be grading; After you are done with your paper RE-READ the assignment to go over checklist. Questions about the assignment specifics? 14

Midterm Project and Essay Exam TIPS Timeliness – Due at the end of Unit 5. After that, LATE PENALTIES WILL BE ASSESSED APA Format: Appropriate Cover page Appropriate Citation WITHIN THE TEXT Appropriate Citation WITHIN REFERENCES PAGE Page Requirements – Cover page and references page do not count 15

Thanks and Good Luck on Midterms!