Using the Internet to Investigate Fraud William N. Dilla, CPA, Ph.D. [email protected] December 17,...
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Using the Internet to Investigate Fraud William N. Dilla, CPA, Ph.D. [email protected] December 17, 2010
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Transcript of Using the Internet to Investigate Fraud William N. Dilla, CPA, Ph.D. [email protected] December 17,...
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
Auction Sites
ebay.com craigslist.com searchtempest.com
Photo / Video Sites
flickr.com picasa.com images.google.com /
images.bing.com youtube.com video.google.com
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 e-mail 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:– http://www.bbb.org/us/– http://www.linkedin.com/
• 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
Other Background Check Resources
Partly free – Individual information
• BRB Publications http://www.publicrecordsources.com/
• http://www.intelius.com/ – Business information (Dun and Bradstreet)
http://www.dnb.com – Charity information http://www2.guidestar.org/
Entirely fee-based– Personal information summary
http://www.spokeo.com – Online background check
http://www.ussearch.com
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
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– http://www.hetheringtongroup.com/– Look under “Training”
Electronic version of this presentation:– http://www.bus.iastate.edu/wdilla/Acct591/default.asp
