FRAUD EXAMINERS MANUAL

1 FRAUD EXAMINERS MANUAL . TABLE OF CONTENTS. VOLUME I. SECTION 1. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES. ACCOUNTING CONCEPTS. Accounting Basics .. Financial Statements .. Generally Accepted Accounting Principles (GAAP) .. FINANCIAL STATEMENT FRAUD . What Is Financial Statement FRAUD ?.. The Cost of Financial Statement FRAUD .. Why Financial Statement FRAUD Is Committed .. Trends in Financial Statement FRAUD .. Financial Statement FRAUD Schemes .. What Red Flags Are Associated with Financial Statement FRAUD in General? .. Detection of Fraudulent Financial Statement Schemes .. Financial Statement Analysis .. Interviews in Fraudulent Financial Statement Cases .. Prevention of Financial Statement FRAUD .. ASSET MISAPPROPRIATION: CASH RECEIPTS. Skimming .. Cash Theft of Cash on Hand .. ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS.

2 Register Disbursement Schemes .. Check Tampering Schemes .. Electronic Payment Tampering .. Billing Payroll FRAUD Schemes .. Expense Reimbursement Schemes .. ASSET MISAPPROPRIATION: INVENTORY AND OTHER ASSETS. Misuse of Inventory and Other Assets .. Theft of Inventory and Other Misappropriation of Intangible Assets .. 2018 FRAUD EXAMINERS MANUAL i FRAUD EXAMINERS MANUAL . FINANCIAL TRANSACTIONS AND FRAUD SCHEMES. BRIBERY AND CORRUPTION. Detection of Bribery Schemes .. Conflicts of Interest .. Anti-Corruption Programs .. THEFT OF DATA AND INTELLECTUAL PROPERTY. Competitive Intelligence Versus Where Intelligence Professionals Get Information .. Favorite Employee Targets of Intelligence Professionals .. How Information Is Lost or Stolen .. Electronic Countersurveillance .. Insider Threats to Proprietary Information .. Investigating Corporate Espionage.

3 Program for Safeguarding Proprietary Information .. Minimizing the Risks of Misappropriation IDENTITY THEFT. What Is Identity Theft? .. Perpetrators of Identity Theft .. Victims of Identity Theft .. Methods of Committing Identity Theft .. Types of Identity Theft Schemes .. How Identity Thieves Steal Information .. Methods of Preventing Identity Theft .. How to Respond to Identity FINANCIAL INSTITUTION FRAUD . Embezzlement Schemes .. Loan FRAUD .. Real Estate FRAUD .. New Account FRAUD Schemes .. Money Transfer (Wire) FRAUD Schemes .. Automated Teller Machine (ATM) FRAUD .. Account Takeover .. Advance-Fee FRAUD .. Letter-of-Credit FRAUD .. Inside/Outside Frauds .. Prevention .. ii 2018 FRAUD EXAMINERS MANUAL FRAUD EXAMINERS MANUAL . FINANCIAL TRANSACTIONS AND FRAUD SCHEMES. FINANCIAL INSTITUTION FRAUD (CONT.). Suspicious Activity Reports.

4 Applicable Federal Statutes in the United States .. PAYMENT FRAUD . Check FRAUD .. Credit Card FRAUD .. Prevention and Detection of Credit Card FRAUD .. Electronic Bill Payment and Person-to Person Payments .. Online and Mobile Account FRAUD .. Alternative Currencies .. INSURANCE FRAUD . Types of Insurance Policies .. Agent/Broker FRAUD .. Underwriting Vehicle Insurance Schemes .. Property Life Insurance Liability Schemes .. Red Flags of Insurance FRAUD .. Computer-Generated Detection Reports .. Workers' Compensation FRAUD .. HEALTH CARE FRAUD . Introduction .. Types of Health Care Systems .. Laws Relating to Health Care Medicaid and Medicare FRAUD .. Provider FRAUD .. FRAUD by the Medical Staff .. Inflated Kickbacks in the Health Care Industry .. FRAUD by Medical Institutions .. Other Frauds in the Institutional FRAUD in Special Care Facilities.

5 Insured and Beneficiary FRAUD .. FRAUD in Managed Care Environments .. FRAUD by Insurance Companies .. 2018 FRAUD EXAMINERS MANUAL iii FRAUD EXAMINERS MANUAL . FINANCIAL TRANSACTIONS AND FRAUD SCHEMES. HEALTH CARE FRAUD (CONT.). Employee Claims FRAUD .. Agent FRAUD .. Criminal Rings .. Electronic Claims Health Care Compliance Programs .. CONSUMER FRAUD . Consumer FRAUD Schemes .. Elder FRAUD .. Telemarketing Ponzi and Pyramid Schemes .. Franchise FRAUD .. COMPUTER AND INTERNET FRAUD . Computer FRAUD Versus Computer Computer Malware .. Email .. Internet FRAUD .. Electronic Commerce and Information Security .. Insider Computer Security .. CONTRACT AND PROCUREMENT FRAUD . Basics of Contract Law .. Methods of Procurement .. Phases in the Procurement Categories of Procurement FRAUD Schemes .. Preventing Contract and Procurement iv 2018 FRAUD EXAMINERS MANUAL FRAUD EXAMINERS MANUAL .

6 SECTION 2. LAW. OVERVIEW OF THE LEGAL SYSTEM. Basic Concepts of the Law .. Types of Legal Systems .. International Issues in FRAUD Cases .. The Court System .. Civil and Criminal Actions for FRAUD .. THE LAW RELATED TO FRAUD (PART 1). Definition of FRAUD .. Principal Types of FRAUD .. International Initiatives Against FRAUD and Corruption .. THE LAW RELATED TO FRAUD (PART 2). Federal Legislation Related to FRAUD .. Fines Under Title 18 of the Code .. Qui Tam Suits and the Civil False Claims Federal Whistleblower Statutes .. BANKRUPTCY (INSOLVENCY) FRAUD . Introduction .. Key Parties in the Bankruptcy System .. Types of Bankruptcy Filings .. The Bankruptcy Code (Title 11, United States Code).. Creditors' Rights and Remedies .. Bankruptcy Crime Statutes .. Bankruptcy Cross-Border Insolvency Regimes .. The World Bank Principles.

7 SECURITIES FRAUD . Introduction .. What Constitutes a Security? .. Securities Laws and Regulations .. Federal Regulation of Securities in the United States .. Self-Regulatory State Regulation of Securities in the United States .. 2018 FRAUD EXAMINERS MANUAL v FRAUD EXAMINERS MANUAL . LAW. SECURITIES FRAUD (CONT.). Securities FRAUD Schemes .. Investigative Tips .. MONEY LAUNDERING. Introduction .. The Money Laundering Process .. Money Laundering Methods .. Federal and State Law .. International Anti-Money Laundering Efforts .. Enforcement and Prevention Strategies .. Special Problems for Insurance Companies .. TAX FRAUD . Introduction .. Evidence of Tax FRAUD .. Types of Tax Evasion Schemes .. Common Defenses to Allegations of Tax FRAUD .. IRS Rewards for Tax Whistleblowers .. Taxation of Illegal Income in the United States.

8 INDIVIDUAL RIGHTS DURING EXAMINATIONS. Employees' Duty to Employees' Rights During the Investigation .. Interviews .. Searches and Polygraph Examinations .. Avoiding Liability for Obstruction of Justice and Witness Tampering .. Discharging a Suspected Wrongdoer .. THE CRIMINAL JUSTICE SYSTEM. Basic Principles of Criminal Law .. Constitutional Rights .. Arrests .. Interrogation of Suspects .. The Charging The Trial Process .. vi 2018 FRAUD EXAMINERS MANUAL FRAUD EXAMINERS MANUAL . LAW. THE CRIMINAL JUSTICE SYSTEM (CONT.). Sentencing .. Appeal .. THE CIVIL JUSTICE SYSTEM. Introduction .. Civil Litigation .. Amendments to the Federal Rules of Civil Procedure .. Alternative Dispute Resolution .. Trial of a Civil Fidelity Insurance .. BASIC PRINCIPLES OF EVIDENCE. Definition of Evidence .. Three Basic Forms of Evidence.

9 Direct Versus Circumstantial Evidence .. Admissability of Evidence .. Special Rules Concerning the Admission of Evidence in Adversarial Chain of Custody .. Excluding Illegally Seized Evidence .. Impeachment .. Privileges and Protections .. TESTIFYING. Introduction .. Considerations for Testifying as a Lay Witness .. Considerations for Testifying as an Expert .. Qualifying to Testify as an Expert Witness .. Preparing to Testify .. Direct Examination .. Cross-Examination .. Expressing an Opinion on Witness Immunity for Summary .. 2018 FRAUD EXAMINERS MANUAL vii FRAUD EXAMINERS MANUAL . VOLUME II. SECTION 3. INVESTIGATION. PLANNING AND CONDUCTING A FRAUD EXAMINATION. Why Conduct a FRAUD Examination? .. What FRAUD Examination Entails .. FRAUD Examination and Forensic Accounting .. FRAUD Examination Develop a Response Plan.

10 Initial Response to Suspicions or Allegations of FRAUD .. Planning and Conducting a Formal Investigation .. Structure the Investigation to Preserve Confidentiality .. ANALYZING DOCUMENTS. Obtaining Documentary Evidence .. Examining Fraudulent Documents .. Handling Documents as Physical Evidence .. Identifying Writings .. The Document Expert's Findings .. How to Obtain Handwriting Samples .. Typewriters and Computer Printers .. Photocopies .. Dating a Document .. Indented Writings .. Counterfeit Printed Documents .. Fingerprints .. Sources for Expert Document INTERVIEW THEORY AND APPLICATION. Preparation .. Characteristics of a Successful Interview .. Characteristics of an Effective Interviewer .. Legal Considerations When Conducting an Interview .. Elements of Inhibitors of Communication .. Facilitators of Communication.