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Interviewing Tips for Corporate Fraud Investigations

Asking the right questions gets you only partway to the truth. A good investigator needs rapport-building skills and a nose for getting to the truth.

Posted by Dawn Lomer on April 12th, 2012

When interviewing the suspect in a fraud investigation, an interviewer’s questions may lead directly to the truth or to web of deception. A good interviewer applies a variety of investigation interviewing skills to make sure it’s not the latter.

Once you’ve established rapport with the suspect, you can start probing further.
It’s important to set out on the right foot from the start. “Investigators must always ask open-ended, non-accusatory questions to begin the interview,” says Kevin Napper, practice group leader of Carlton Fields’ White Collar Crime and Government Investigations practice. “Let the interviewee get comfortable with the setting and the interviewer. Start general and get more specific as the interview unfolds,” he says.

Once you’ve established rapport with the suspect, you can start probing further. “Always ask the who, what, when, where, how and why questions after beginning the interview with general questions,” says Napper.  “Lock the interviewee in to his or her answer and get them to be specific.”

Make it a Conversation

“We recommend having a conversation with the subject instead of asking questions,” say Brian Fox,  CPA and Founder and Chief Marketing officer of audit confirmation company Capital Confirmation Inc, and Rick Schumacher, CFE and Director of fraud investigation company Cover Six Risk Management.

“For example, in admission seeking interviews, instead of asking: ‘Why did you steal the money?’, say something like: ‘Tell me why you would need to access the expense account without approval.’”

This conversational tone helps to build rapport and empathy and allows the subject the opportunity to tell a story as well as shift some of the blame onto some perceived need, say Fox and Schumacher. But they caution against using loaded words, such as steal, theft, cash, etc.

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“Most importantly, empathize with them. If we refer to Cressey’s fraud triangle, both the subject and the interviewer can generally relate on both need and opportunity. The only thing separating the two is rationalization/justification. If the interviewer can help the subject to understand the justification aspect of the triangle, the confession pretty much writes itself,” they say.

Establish a Baseline

A good interviewer develops a baseline early in the conversation, by asking questions to which the interviewer already knows the correct answers, says Steven Wolf, Executive Director at Capstone Advisory Group and an adjunct professor at Georgetown University at the McDonough Business School, specializing in fraud investigation and forensic accounting.

“The baseline is the reaction and behaviors exhibited by the subject when telling the truth. The interviewer should compare the baseline behavior with the subject’s behavior when he or she later has a reason to lie,” says Wolf. “Differences between the two may suggest deception or lying. If the body language or behavior is not different from the baseline, the person may be truthful,” he says.

“Sometimes the facts involved in a fraud investigation can be a bit complicated. Always ask for clarification. Repeating statements and clarifying the facts are useful tips for making sure you’ve understood the interviewee’s story. You can’t afford to misinterpret or misunderstand what an interviewee is trying to say- it’ll ruin your investigation,” says Wolf.

Ask the Obvious

Did you do it? It’s the simplest question you can ask a suspect. “It is always amazing to me how many people want to tell you they did it and all you have to do is ask them,” says Chris Hamilton, a fraud and forensic accounting consultant and founder of Arxis Financial, Inc. “Probably the biggest mistake is not asking that one question. Another error, however, is making this the first question in the interview process,” he warns.

Hamilton stresses the importance of asking suspects about themselves. While it may seem like a waste of time, this has several purposes. Firstly, it helps to relax the suspect. “Everyone relaxes once they are talking about what they know best – themselves,” he says. These questions also set the baseline for how the suspect responds when telling the truth, as discussed above.

And sometimes asking general personal questions provides the investigator with an unexpected bonus. “Extraneous or random other information and clues are possible as the conversation progresses,” says Hamilton. “This is particularly true if the suspect gains confidence in their position with the interviewer.”

Don’t Leave it There

No matter how thorough an investigator is during the interview, there is always a chance that he or she has missed a crucial nugget of information. Don’t give up the opportunity to find it. “Always conclude the interview with: ‘anything else you would like to tell me about XYZ?’” says Napper. This could provide the last piece of information you need to conclude the case.

Dawn Lomer
Dawn Lomer

Manager of Communications

Dawn Lomer is the Manager of Communications at i-Sight Software and a Certified Fraud Examiner (CFE). She writes about topics related to workplace investigations, ethics and compliance, data security and e-discovery, and hosts i-Sight webinars.

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