Organizations across the world are facing a daunting challenge – detecting criminal acts carried out by employees in positions of trust. Crimes inside organizations not only cause financial harm but can also give rise to civil and criminal liability for the company. The emergence of remote work has served as an accelerant for the growth of fraud inside organizations. Some of the red flags that used to lead to the discovery of internal theft schemes are only effective when they are physically observed.
With so much work being performed remotely, fraud detection has become more of a challenge. Frauds not only cause financial harm that can be devasting, they often expose shortcomings in compliance programs and internal controls, which can make it difficult to pursue avenues of recovery and defensibly state, “We did everything we could to prevent this type of behavior.” As a result, organizations need to have two equally important work streams – investigation and remediation.
Organizations need to have a plan in place to conduct consistent, risk-appropriate internal investigations that are in alignment with the rules of evidence and applied consistently, regardless of who is being investigated. Often overlooked is the need to understand how things happened, why they went undetected, and which internal controls and compliance program elements did not work as intended, didn’t exist, or were poorly designed or implemented. Law enforcement and prosecutor’s offices have become very sophisticated in their understanding of the interrelationship between misconduct and ineffective compliance programs and internal controls and expect organizations to apply what they learned during the investigation to strengthen those controls and make the organization less susceptible to a recurrence.
The time to prepare for an internal investigation is before chaos reigns supreme. One of the most important steps any organization should take is a realistic self-assessment. The process is simple. It starts with asking the question “Is there anyone on our payroll who can oversee an internal investigation and would have credibility with a law enforcement agency or prosecutor?” Often, compliance departments, in-house counsel, corporate security, or cyber have former law enforcement or prosecutors on the team. They become the obvious choice to oversee an internal investigation.
Next, consider the types of things that internal investigations include, such as email review, forensic imaging of devices, background investigations, witness interviews, forensic accounting, and sometimes things like surveillance, executive protection, and crisis management. Most organizations have some but not all of these things in-house. Figure out when you feel comfortable doing in-house and then go about a methodical process of filling the gaps. The most cost-effective way of filling those gaps is to put agreements in place with service providers who specialize in some or all of the gaps that you have identified. Most service providers are happy to enter into contracts to provide these complementary services on an as-needed, on-demand basis with no upfront costs. Contracting takes time, and time is not your ally when all hell is breaking loose.
Scott Moritz (Founder and CEO of White Collar Forensic LLC), an ex-FBI Special Agent, recognizes the growing need for independent and specialized service providers who can help organizations deal with the complex challenges of consequential investigations and compliance remediation. His company offers a curated network of investigative, forensic accounting, and compliance practitioners, including experts from various industries, who can provide tailored solutions for each client.
From FBI Special Agent to Compliance Subject Matter Expert
Scott’s journey into the world of risk consulting and white-collar crime investigation is nothing short of inspiring. After a successful career in business, he made the bold decision to join the FBI as a special agent, a position he held for almost a decade. After leaving government service, Scott ventured into risk consulting, where he has excelled ever since. He has become a go-to expert for organizations and their outside legal counsel in compliance, white-collar crime, and corruption investigations.
Scott helps these organizations pursue financial recovery from the persons directly responsible for their losses as well as third parties that may have contributed to the loss in some way. He also leverages his expertise to assist organizations in navigating asset forfeiture laws when there is a parallel criminal investigation and to prepare insurance claim proofs of loss.
Scott’s turning point came when he realized the impact that fraud and corruption can have on organizations. His passion for protecting organizations from fraudulent activities continues to be his driving force, propelling him to achieve even greater heights in his career.
White Collar Forensic: Empowering Organizations to Combat Fraudulent Activity
Founded in January 2022 in New York City, White Collar Forensic is a game-changing firm in the world of risk consulting. The company was established to address the growing need for agile and independent service providers that can offer the same level of expertise and resources as major firms without the accompanying hassles of auditor independence and conflicts that can arise from working with large firms. By working closely with clients and fully immersing themselves in their issues when necessary, the company aims to provide expert guidance that empowers organizations to take decisive action and combat fraudulent activity effectively.
White Collar Forensic offers a range of interrelated services that are designed to help organizations respond to emergent events effectively. These services include:
- Forensic Accounting
- Investigative Due Diligence
- Executive Protection and Security Advisory
- Complex Investigations
- Whistleblower Response
- Computer Forensics and eDiscovery
- Fixed and Vehicular Surveillance
- Technical Surveillance Countermeasures
- Interim Compliance Officer Services
- Monitoring
- Asset Recovery
- Testifying Experts
What sets White Collar Forensic apart from its competitors is its ability to leverage a global pool of investigative, forensic accounting, eDiscovery, and compliance subject matter experts. This curated network of practitioners allows it to assemble a dream team of experts without the pressure of clearing the bench first, enabling the company to hyper-focus on helping clients achieve the best possible outcome.
Investigation and Remediation
White Collar Forensic’s clients come from diverse industries, as the company is industry-agnostic and has worked across various sectors. However, the most common pain points among its clients are the exposure of shortcomings in their compliance programs and internal controls once fraud schemes are detected. In response, the company provides two critical work streams – investigation and remediation, which help clients, address these issues and avoid further exposure to risks.
Clients who have used White Collar Forensic in the past have praised the company for its transparency and for providing critically important information that enables informed business decisions. They appreciate the calming influence that the company has during stressful and crisis-filled times and would not hesitate to call on them in the future.
Gray Hair, Wrinkles, and Expertise
White Collar Forensic’s team comprises experienced investigators, forensic accountants, and compliance advisors who have decades of public and private sector experience. They have a wealth of knowledge and expertise that they can draw on to assist clients with their immediate and long-term needs. The team is composed of seasoned professionals with well-earned gray hair and wrinkles, and that deep talent pool and many years of experience double as an ad-hoc benchmarking study and intellectual capital for our clients to draw on.
The company believes in empowering its employees to work in their chosen profession in a fulfilling and meaningful way. They get excited about helping clients with difficult situations, be it investigations or compliance challenges. The company’s culture is collegial, which allows for personalized relationships between team members. They work side by side with one another, contributing positively to the organization’s overall morale.
As a leader, Scott believes in putting his colleagues in a position to play important roles and empowering them to think and act independently. This approach enables the team to build credibility with one another, creating a sense of camaraderie and trust within the team.
Inside White Collar Forensic
At White Collar Forensic, every team member has a client-facing role and is responsible for achieving client objectives with professionalism, attention to detail, and innovation. The company prioritizes a pragmatic approach and transparency in its work.
When asked about his favorite part of the job, Scott mentioned the satisfaction he derives from helping clients navigate through a crisis and achieving a successful outcome. He enjoys forging strong bonds with clients during the process and maintaining those relationships even after the crisis has passed.
However, not all investigations have happy endings, and this is something that Scott finds difficult. Despite the company’s high success rate in uncovering the truth, there are times when the evidence simply isn’t there, leaving everyone involved feeling unfulfilled. Nonetheless, the team remains committed to delivering the best possible outcome for their clients.
Embracing Technology to Stay Ahead of the Curve
In the past, investigators, forensic accountants, and compliance advisors had to rely on statistical samples of transactions to test for fraud or corruption indicators. However, with advancements in computing power and speed, it is now possible to analyze every single transaction, email, or electronic record with lightning speed. Scott acknowledges the significant impact that technology has had on the industry as a whole. He recognizes that incorporating technology into White Collar Forensic’s offering is essential to keeping up with the ever-evolving demands of clients. Therefore, the company embraced the power of technology, specifically in investigations and compliance remediation.
Scott uses robotic process automation, machine learning, and deep learning to thoroughly examine terabytes of data and email communications in a matter of minutes. This allows the company to provide clients with more in-depth and accurate analyses, uncovering even the most complex cases of fraud or corruption.
The Future of Consultancy: 3 Key Trends to Watch
Scott understands the importance of staying current with the latest trends driving the future of professional services. He identifies three key trends that will shape the industry in the coming years.
The first is the increasing need to adapt internal controls to better keep track of remote workforces. With more employees working from home, organizations must monitor their team members’ activities to ensure productivity without appearing overly invasive. This trend is expected to continue as remote work becomes more common.
Next is the use of predictive analytics to model stakeholder behavior, detect outliers, and tailor solutions to create unique experiences for each organization. With the availability of real-time data, research-driven choices, and a thoughtful approach will be prioritized over brand or headcount.
Perhaps the most significant trend is the explosion of artificial intelligence (AI) and its availability to individuals through platforms like Open AI’s ChatGPT. While AI presents limitless opportunities, it also poses ethical challenges such as software-driven racial profiling and discrimination, making it the new compliance frontier.
White Collar Forensic understands the importance of adapting to emerging trends and building and growing its critically important trusted advisor relationships with clients. It encourages clients to monitor their peer groups, allocate budgets for proactive improvements, and plan for potential scenarios through crisis management planning and desktop exercises. By doing so, clients are better equipped to perform in crises and adapt to regulatory and enforcement landscape changes.
Expert Tips for CEOs and Business Leaders
As an advisor to C-suite executives and boards, Scott offers invaluable advice to leadership teams.
- Don’t take the position that the success or failure of the compliance program rises and falls on the shoulders of the compliance team. Setting the right organizational tone is no longer sufficient. You must be the leading proponent and champion of your organization’s ethical culture and your support for the compliance mission must be persistent and unwavering.
- Have an intimate understanding of the risks nuanced to your organization, industry, countries of operation, and customer base.
- Determine if your controls and compliance frameworks are sufficiently robust to weather any potential storm.
- Stay informed of emerging risks and regulatory changes.
- Take a proactive approach to compliance, make sure the chief compliance officer has direct access to leadership and the board, and choose to set the ethical bar in your industry.
Quotes
