Use of interviews in international fraud investigations

February 2020  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2020 Issue

As the global economy becomes increasingly interconnected, professionals must be able to access immediate countermeasures in order to investigate criminal financial activity within corporations, international financial institutions and other types of clients. The specially developed capabilities of interviewers tasked with understanding the nature of financial crime are central to that response. Interviewers piece together the various details of the puzzle that the investigators assemble. In certain cases, the testimony of a single witness or suspect serves as the most significant piece of evidence for a judge or jury at a criminal trial.

Law enforcement and the private sector

Companies often hire private investigative firms to assist internal or external counsel when conducting complex international fraud investigations. Without diminishing the all-important role of law enforcement agencies, several factors make private investigative firms suitable for the purpose of international fraud investigations. Such firms often employ highly skilled professionals from diverse backgrounds, including former members of law enforcement or government agencies, leverage the latest IT technology and forensic equipment, work across jurisdictions and are not restricted by country boundaries, and keep clients’ fraud-related matters internal.

Private investigative firms may be better positioned to assist than law enforcement in certain situations, including cross-border investigations, in which law enforcement may not be able to conduct interviews overseas, have the local language expertise required or respond appropriately to cases of employee dismissal, resignation or non-cooperation. In the last scenario, non-threatening interviews conducted by private investigators can be more efficient than interviews conducted by a law enforcement officer utilising a more confrontational approach.

Private firms and professional enforcement may collaborate before, during or after their investigations. A company may be legally required to pass the results of its internal investigations on to law enforcement agencies. In other cases, a company may want to refer the results of an internal investigation to law enforcement to bring perpetrators of fraud to justice.

Law enforcement authorities often hold different views on the use of interviews conducted by private investigative firms. German prosecutors, for example, take the position that law enforcement may not use internal company interviews. Similarly, the UK Serious Fraud Office (SFO) insists that the companies should ‘consult’ with the SFO before speaking to witnesses. US law enforcement authorities take a more pragmatic view – they generally welcome the support of private investigative firms in complex, fraud-related investigations in which witnesses are scattered around the globe.

Role and types of interviews

Evidence can be both physical, such as documents, emails and accounting records, or verbal, such as statements from employees, suspects and other witnesses. Interviewers can collect valuable insight from discussions with witnesses. Interviews can provide background information of the events leading to fraud, the context investigators require to interpret data, information and documents obtained throughout the investigation and new leads to further the investigation.

Investigative interviews can be either general fact-finding interviews, process ‘walk-through’ interviews, interviews related to specific communications, documents or events or admission-seeking interviews.

While there is a significant difference between interviewing a witness to fraud and interviewing a suspect of fraud, sometimes it can be difficult to distinguish between the two types of interviewees. An individual may be a witness in one event and a suspect in another. For example, a low-level bank clerk may observe an internal policy violation but also forge loan approval paperwork. Treating an individual as either a witness or a suspect dictates the individual’s behaviour, in addition to the dynamics and the consequences of the interview. A witness who chooses to honestly cooperate with an interviewer is not likely to face any significant negative consequences. However, a suspect who chooses to honestly cooperate may face disciplinary, civil and criminal actions as a result of an interview. An interviewer should be mindful of the type of interviewee and select the appropriate techniques to reach the goals of interview.

Planning and preparation

Successful interviews depend on planning and preparation. It is the responsibility of the interviewer to think about and proactively arrange for important factors, such as time, venue, interview room, layout of furniture and any other logistical arrangements required for a successful interview. The rule is simple: the environment should be conducive to an effective and efficient interview process. Generally, a more relaxed and safer environment will make the interviewee more comfortable. A successful interviewer should treat the interviewee in the way he would want to be treated himself.

For example, in one financial crime investigation, interviewers arranged an interview with an important witness outside of local offices. To set the witness at ease and meet his requests, the team agreed to conduct the interview at a local McDonald’s restaurant. The safe, informal environment helped the interviewers to obtain sensitive information which the witness may not have shared if the interview were conducted in the main office building.

The largest, single obstacle to a successful interview is the interviewer himself. The way the interviewer looks, talks and behaves toward an interviewee impacts the level of rapport and cooperation given. Equally important is the objectivity, professionalism and avoidance of prejudices toward the interviewee or issue at hand. A successful interviewer cannot afford to become personally or emotionally involved in the interview process. It is critical for an interviewer to leave his ego at the door of the interview room.

Finally, the interviewer should have thorough knowledge of all the facts and details relevant to a matter at hand. The interviewer is responsible for studying all relevant material such as the biography of an interviewee, documents, communications, accounting records and reports. Interviewers should prepare an interview questionnaire and keep documentary evidence organised and easily accessible. This way, the interviewer can focus on questioning the interviewee, detecting deception and eliciting truthful responses.

The interview process

Interviewing is as much an art form as it is a process. An interviewer should always allow an interviewee to speak, listen attentively, observe changes in behaviour and direct subsequent questioning on the areas where the changes have been noticed. The outcome of an interview, however, depends on the ability of the interviewer to control this process. Interviewers maintain control by using appropriate questioning and communication techniques at appropriate points within the interview. An interviewer’s ability to control the interview process is rooted in his prerequisite skills, education and training, as well as his mindset, attitude and discipline. Interviewers must be disciplined to hone these skills and develop them to the level required for consistent success during an interview.

Although the main weapon of an interviewer is questioning, it is equally important for him or her to be able to listen attentively. If the interviewer is unable or unwilling to pay attention to the interviewee over a prolonged period, he will not be able to notice subtle changes in the interviewee’s behaviour. It is also essential for interviewers to establish a rapport at the outset of the interview. Once a rapport has been established it is much more difficult for an interviewee to deceive and easier for the interviewer to notice signs of deception. Establishing a rapport within the limited time frame of an interview requires a degree of emotional intelligence and flexibility on the part of the interviewer.

Laws and regulations

Each jurisdiction has its own set of laws and regulations applicable to recording an interview, especially regarding video or audio recording. The general rule and best practice are that an interviewer obtains consent for any type of technically enabled recording from the interviewee. Often, contemporaneous note taking is the most effective and easiest way to capture an interview. Taking notes is conducive to an efficient interview as it does not subject the interviewee to additional psychological stress or anxiety. It is important to capture questions and answers as fully as possible, as small details within responses may be significant. If an interview team consists of two people, it is good practice to have one person solely responsible for leading the interview and the other responsible for taking notes. The lead interviewer may fully concentrate on the interview itself. Depending on the circumstances, it can be good practice to give the interviewee an opportunity to read the notes and correct any mistakes, omissions or inaccuracies.

Interviews conducted by a skilled and professional interviewer are valuable to international fraud investigations. Interviews provide another layer of information for the investigation, complementing the information obtained from books and records, accounting systems or corporate communications. In some cases, interviews of key witnesses guide the investigators toward new documentary evidence or draw a more complete picture of events. However, to be an effective and efficient tool for investigation, interviews require a great deal of planning and preparation. Even more importantly, they require an interviewer with the appropriate level of skill obtained through specialised training, study, observation and practical experience.

Mikhail Lastovskiy is a managing director, Don Rabon is an independent contractor and Sara Shaner is a senior associate at Ankura Consulting Group LLC. Mr Lastovskiy can be contacted on +44 (0)207 015 2399 or by email: mikhail.lastovskiy@ankura.com. Mr Rabon can be contacted on +1 (828) 606 9167 or by email: dwrabon@msn.com. Ms Shaner can be contacted on +1 (202) 507 5523 or by email: sara.shaner@ankura.com.

© Financier Worldwide

BY

Mikhail Lastovskiy, Don Rabon and Sara Shaner

Ankura Consulting Group LLC

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