Why Anti-Fraud & Financial Crime Management?

Corporate crime is an unlikable fact in today’s big business world. It has touched every country, every industry, and has no signs of stopping. Throughout the past 5 years, the number of reported cases of fraud and corruption has continued to grow radically. Compounding this are the challenges faced by the audit team and a general lack of the necessary skill sets to collect the right audit evidence so critical to criminal investigations.

While the regulatory measures and internal controls in reporting requirements help to lessen the potential for falsified activities to take place, history has shown that ingenious employees can and have manipulated even the best control systems for personal gain.

Virtually every entity suffers from fraud, though management might not know it: organized crime, money laundering, business fraud. With fraud costing entities an estimated 5% of their annual revenues, organizations lacking proactive fraud prevention measures are the most at risk.

• Understand the basic purposes of internal controls
• Clarify the differences between fraud deterrence and detection
• Show different types of assets misappropriation
• Understand the red flags of fraud
• Know suitable controls and policies over assets and revenues
• Know the controls and procedures to minimize the eventuality of fraud
• Recognize deficiencies, assess cost/benefit effectiveness and implement a course of action
• Get acquaintedwith the gaps in your fraud prevention processes
• Be familiar withways to mitigate the risk and cost of fraud in your organization
• Be familiar with the practical application of forensic accounting techniques for civil and criminal litigation and internal auditing and security
• Know the importance of understanding and using circumstantial evidence to secure a conviction
• Explains both the Net Worth and Personal Expenditures method and the Bank Deposits and Cash Expenditure method of proof
• Clarify instruction on how to organize and prepare the evidence so the average citizen can understand the complexities of the financial investigation
• Explain of white collar crimes within an organization
• Show basic Skills for Forensic Investigations
• Highlight successful prosecution of economic crimes, in particular, fraud
• Emphasis on the integration of accounting, auditing,and investigative skills.
• Show how to carry out good interviews
• Know basic detection of risk and red flags

Fraud Principles

A quick glimpse into:

• What is Fraud?
• The Basics of Fraud
• Who Commits Fraud and Why
• Fraud Triangle – Fraud Diamond
• Understanding How Fraud Can Be Committed – Red Flags
• Financial Statements Schemes:
  • Fictitious Revenue
  • Timing Differences
  • Improper Asset Valuation
  • Concealed Liabilities and Expenses
• Asset Misappropriation Schemes:
  • Skimming v Cash Theft
  • Billing Schemes
  • Payroll Fraud Schemes
  • Expense Reimbursement Schemes
  • Misuse of Inventory and other Assets
  • Theft of Inventory and other Assets
  • Misappropriation of Intangible Assets
• Case studies/Workgroup
• Fraud Risk Assessment
• Approach to risk management: Definitions
• Risk and culture
• The COSO Framework for Enterprise Risk Management
• The Sarbanes-Oxley Act (SOX)
• Risk identification
• Management of risk
• Anti-Fraud and Anti-Corruption Programs
• Bank Secrecy Act

Introduction on Fraud Schemes and Red Flags

• Asset Misappropriation
• Embezzlement Schemes
• Financial Statements Fraud Schemes
• Loan Fraud and its Red Flags
• Real Estate Fraud – Fraudulent Appraisal and Red Flags
• Mortgage Fraud
• New Account Fraud Scheme
• Money Transfer (Wire) Fraud Scheme
• Letter of Credit Fraud
• Cheque Fraud – Prevention and Investigation

An overview on Money Laundering – Methods and Mechanisms

• What is Money Laundering and why is important
• The Money Laundering Cycle
• Legal and Illegal Laundering
• Who Uses Money Laundering Practices
• Advantages and Disadvantages of Transaction Systems to Money Launderers
• Sources of dirty money
• Indications and tell-tale signs

Financial Institutions’ Role in Money Laundering

• Correspondent Banking
• Tools Bank Use to Identify Money Launderers
• Due Diligence Laws for Banks
• Shell Banks
• Currency Transaction Report
• Suspicious Activity Report
• Case study: Shell bank

Money Laundering Schemes

• Use of a Nominee
• Simple Business Cover
• Simple Banking Operation
• Banking-Business Operation
• Banking-Business Combination

FATCA Due Diligence

• Specific FATCA due diligence requirements
• Identification of account holders
• What is acceptable documentary evidence?
• What is the validity period of documents?
• How long must documents be retained?
• Confirming the reasonableness of self-certification
• Examples of the reasonableness check
• Self-certification by account types/ structures

Requirement of Indirect Methods of Proof

• The specific items case
• The bank deposits and cash expenditures case
• The net worth and personal expenditures case
• Scenario case

Analyzing Financial Records for Leads

• Finding leads in Bank Records
• Financial Records to Examine
• Uncovering Patterns
• Identifying Indicators of Illegal Activities
• Using Graphs and applying Critical Thinking

Beginning the Investigation

• Developing an Investigation Plan
• Begin collecting information
• Create a subject profile for each investigation target
• Profiling the subject
• Analyzing the information
• Conduct interviews
• Trace the assets

Forensic Analytics

• Methods and techniques to identify Fraud
• Financial and Non-Financial data
• Data analysis
• Benford’s Law
• Time-Series Analysis
• Correlation
• Ratio Analysis
• Horizontal and Vertical Analysis
• Matrix
• Net Worth and Expenditure Method
• Case study: application of data analysis methods

Tracing Illicit Transactions

• Direct method of tracing financial transactions
• Indirect method of tracing financial transactions
• Locating hidden assets – common ways to hide assets
• Methods to obtain information for locating assets

Analyzing Documents

• Obtaining documentary evidence
• Examining fraudulent documents
• Handling documents as evidence
• Identifying writings
• How to obtain handwriting samples
• Dating a document
• Photocopies
• Indented writings
• Counterfeit printed documents

Interview Preparation – Conducting the Interview

• Interviewing Witnesses
• Question typology: open, closed, introductory, informational
• Legal considerations when conducting an interview
• Elements of conversations: expression, persuasion, information exchange
• Inhibitors of communication: ego threat, forgetting, chronological confusion, unconscious behavior
• Dealing with resistance and difficult people
• Admission seeking questions: preparation and steps
• Role play in conducting an interview

Concluding the investigation

• Presenting the results of your investigation
• The outcome of the investigation and the next step
• Preparing and writing the report
• Format of the report and objectives

Target group

• Teller staff of bankdepartment.
• Staff BankingOperations department.
• Staff exchange companies.
• Staff investment companies

Language

• The materials for the trainees will be in English.
• The language of instruction will be in English and or Spanish.

Material

• Handbook ( about 135 Pages ) in English for the professional as a reference
• Handouts about 50 pages in English for the attendees
• PowerPoint Presentation – in English and or Spanish

P.S The Handbook can be localized and translated 50 languages other than English per request and with additional charges.