Conversion investigation methods
- 1. Chapter Nine Fraud Examination Presented by Kirsty Peterson 5th August 2013 Conversion Investigation Methods
- 2. Learning Objectives Explain why it is important to find out how perpetrators convert and spend their stolen funds Understand how public records can assist in following the financial “tracks” of suspected perpetrators Access information from the internet to assist in an investigation Perform net worth calculations on suspected perpetrators and understand how they are effective in court and in obtaining confessions
- 3. Spending Stolen Funds “With few exceptions, perpetrators spend what they steal. Because of this, looking at spending patterns is a primary investigation technique” (Albrecht, Albrecht, Albrecht, & Zimbelman, 2012) “Whether driving his Lamborghini, cruising on his luxury boat in Fiji, or relaxing in his antique-furnished historic homestead, Michael Swann made no secret of his high- flying lifestyle” (“How Mr Money Bags got rich”, 2008)
- 5. Conversion Searches Conversion searches are performed for two reasons: 1. To determine the extent of the embezzlement, and 2. To gather evidence that can be used in interrogations to obtain a confession The most common technique used to investigate and resolve fraud is by interviewing. By providing evidence of lifestyle and expenditures that cannot be supported by earned income, cornered suspects may breakdown and confess.
- 6. Conversion Searches Information can be gathered from: 1. Government, council and other public organisations 2. Private sources of information 3. Online sources of information 4. Using the net worth method of analysing information
- 7. Conversion Searches Public Records Government Central Local Private Sources Acquaintances Trash cover Credit agencies Online Database Subscription Per-search fee Free Internet Searches Google Yahoo! etc
- 8. Government and Public Sources Electoral Roll Post Office or Library Companies Office www.business.govt.nz/companies Local Councils e.g. www.rdc.govt.nz Land Info NZ www.linz.govt.nz Min. Economic Dev. www.insolvency.govt.nz Personal Property www.ppsr.govt.nz Securities Register While some information can be obtained by anyone who requests it, other information is covered by privacy laws (such as the Privacy Act 1993) and requires authorisation
- 9. Online Sources Examples: www.veda.co.nz www.dnb.co.nz www.carjam.co.nz www.terranet.co.nz www.lexisnexis.com
- 10. Private Sources Private acquaintances “Trashing” Shredded documents Original files on computers Be sure you have the legal rights to gather and use the information
- 11. Internet Searches Google Search by phrase Minus search terms Domain restrictions Google Groups Cached Results Google Images Google Earth Yahoo!
- 12. Net Worth Calculations 1. Assets – Liabilities = Net Worth 2. Net Worth – Prior Years Net Worth = Net Worth Increase 3. Net Worth Increase + Living Expenses = Income 4. Income – Funds from Known Sources = Funds from Unknown Sources
- 13. Net Worth Example Financial Data for Joe Blogs 2012 2013 Financial Data for Joe Blogs 2011 2012 2013 Income Assets Salary 39,000 41,000 Dwelling 250,000 250,000 250,000 Vehicle 20,000 20,000 60,000 Expenses Cash at bank 1,000 5,000 15,000 Mortgage repayments 10,000 10,000 Total Assets 271,000 275,000 325,000 Vehicle loan repayments 3,000 3,000 Living expenses 15,000 16,000 Liabilities 28,000 29,000 Mortgage 200,000 195,000 141,000 Vehicle loan 10,000 8,000 - Total Liabilities 210,000 203,000 141,000 Net Worth 61,000 72,000 184,000 Change in net worth 11,000 112,000 Plus living expenses 28,000 29,000 Total income 39,000 141,000 Less known Income 39,000 41,000 Income from unknown sources - 100,000
- 14. Summary Discovering how perpetrators convert and spend their funds is an important investigation technique Government and other public records are important sources of information about the financial “tracks” of suspected perpetrators Private and online sources of information are important sources of information during an investigation Net worth calculations are effective in court and in obtaining confessions from suspected perpetrators
- 15. Questions
- 16. References 1. Albrecht, W.S., Albrecht, C.O., Albrecht, C.C., & Zimbelman, M.F. (2012). Fraud Examination (4th Ed.). Mason, OH: South-Western. 2. Akuhatawhare, W. (2011, October 6). Te Puia ticket seller was stealing more than $1000 a day. The New Zealand Herald. Retrieved from http://www.nzherald.co.nz. 3. Granny avoids jail term for Te Puia theft. (2012, June 22). 3 News. Retrieved from http://www.3news.co.nz. 4. Hartevelt, A. (2011, November 11). Jail term for theft at Te Puia. Rotorua Daily Post. Retrieved from http://www.rotoruadailypost.co.nz. 5. How Mr Money Bags got rich by robbing the sick. (2008, December 13). Otago Daily Times. Retrieved from http://www.nzherald.co.nz. 6. KPMG. (2013). A survey of fraud, bribery and corruption in Australia & New Zealand 2012. Retrieved from http://www.kpmg.com/au.