Avoid a Critical Failure - Always Start with Step 1

For each post in this four-part blog series, I will use stories that will explain the steps of solving a jigsaw puzzle and tie them to the steps for most fraud investigations. As you may recall, the first step to solving a puzzle was to turn all the pieces face up and locate the edge pieces. I am certain that you understand this basic step, but the directions were a little more difficult for my daughters to understand.

As a family, the first time we worked together on a large puzzle I explained this step to my daughters prior to opening the box. However, it is very exciting when you open the jigsaw puzzle box and pour all the pieces on the table. The little hands began to remove pieces from the pile with very little thought. My wife and I were the only ones following directions, and we even repeated the directions several times.

We completed the puzzle and didn’t bother with enforcing the rules because we wanted it to be a fun family experience. However, we would have completed it faster if we all followed directions.

Believe it or not, the first step in a fraud investigation is very similar to my children’s reaction the first time we poured the puzzle pieces on the table. You want to jump in, run as fast as you can, and get to the end as fast as possible. But how do you know you’re running in the right direction? You could be going down the wrong path or you may tip off the fraudster if you’re not careful. Jumping in without a plan could mean critical failure.

A plan is important as there is no time to lose. Additionally, fraud investigators must think on their feet and be flexible enough knowing that the plan will probably change as the investigation progresses. During this step, you are uncovering information. The following are important ways to turn over the pieces and start identifying the edge pieces:

• Gather information from knowledgeable sources by conducting interviews. These internal sources can provide you with some of the puzzle pieces; help identify the location of additional pieces; and possibly help explain what the completed puzzle will look like. Proceed with caution because these sources could be biased, ill-informed or out of the loop depending on their position and background.
• What internal documents are available? Remember to protect and collect. Protect to prevent destruction by fraudsters. Be careful not to raise the suspicion of the fraudster(s). This will help mitigate a fraudster from hiding or destroying your puzzle pieces.
• What external documents are available? Remember again to request and collect. Request early because third parties will take longer to respond to requests. Prior to requesting, consider the relationships of the target with the third party.

This step is all about gathering information and trying to determine the location of the puzzle pieces. During this phase of the investigation, all information is vital even if it is later determined to be unreliable. The phase is critical to beginning the next phase related to putting the edge pieces together, which will define the project direction. Stay tuned for next week’s blog.