In order to commence with such an investigation, a seasoned Investigator can utilise minimal information to obtain success. However, the following information will be of great assistance:
- Identity of the suspected fraudster(s);
- Any documentary evidence; and
- All information collected by the victim.
The investigators will utilise a variety of databases at their disposal to trace fixed and movable assets, bank accounts etc. that are linked to the fraudsters or their accomplices. Read our previous blog to find out what can be traced.
Stages of an investigation:
- Gathering of evidence and intelligence: The investigators will gather all available evidence and relevant information about the fraudsters’ assets as well as their accomplices. This is then used to create a profile of the fraudsters and compile financial analyses.
- Analyse: By analysing the financial information, investigators are able to determine the source of the fraudster’s income and expenditure, whether legitimate or illegal.
Once analysed, the investigators then create a flowchart to demonstrate the flow of monies and acquisition of assets, whether fixed or movable. There are 3 simple methods:
- Timeline analysis: This is useful to establish when the fraud began and how it continued. This method provides an overall picture of how the illicit act was committed.
- Link analysis: This is applicable when multiple fraudsters, assets or companies are involved. This method shows the relationship between the above mentioned. For example: Person A defrauds the company and acquires assets that are divided between Persons A, B, and D.
- Money flow analysis: This is useful to determine what the money was used for and how the money or assets where moved to limit suspicion.
Many fraudsters accumulate portfolios of property and businesses to launder the stolen funds through by purchasing, renting or investing, thereby generating “clean” money.
The recession has escalated in fraudulent activity as well as employee dishonesty, thus it is more crucial than ever before to have systems in place and to be vigilant with employees and colleagues to follow procedures.
Be sure to have a Companies and Intellectual Property Commission (CIPC) verification done if you suspect any employees or partners are potentially operating businesses that are in conflict with their employers or current business partners.