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In the company of criminals

An undercover ace learned fraudsters’ methods and blind sides



March/April 2013

MarchApril-chris-mathers-1An important tenet of fraud examination: Learn to think like a fraudster. Chris Mathers knows the intricacies of money laundering and drug trafficking because he worked undercover for 20 years. Now he wants to teach you what he learned.

Chris Mathers says he’s spent most of his adult life in the company of criminals. He worked undercover for 20 years for the Royal Canadian Mounted Police (RCMP), the U.S. Drug Enforcement Administration (DEA) and the former U.S. Customs Service. 

Mathers, a Canadian citizen, said he began his “life in crime” because he was looking for adventure. “I was thinking of joining the French Foreign Legion,” he says. “I figured, I speak French, maybe I could? But the Mounties recruited me, and I went with them. I passed selection into the undercover program, shortly after my initial training, and they put me on the street to buy drugs.”

As he matured, the RCMP had him working “big drug and money plays.” Mathers then posed as a money launderer to assist top criminals who wanted to wash some cash. The Mounties later assigned him to partner with the U.S. Internal Revenue Service Criminal Investigative Division and what used to be the U.S. Customs Service. (It became two distinct programs when it was rolled into U.S. Homeland Department of Security.) He subsequently also worked with the DEA and the FBI.

At the time of his retirement from the RCMP, Mathers was the senior undercover operator at the Proceeds of Crime Section where he established and operated a number of “storefront” money laundering businesses targeting Colombian, Russian and Asian organized crime groups. Mathers personally infiltrated criminal organizations in North America, the Caribbean, Latin America and Europe.

In 1995, Mathers joined the forensic division of KPMG. In 1999, he was appointed president of KPMG Corporate Intelligence Inc., where he was responsible for international due diligence, asset recovery operations, and the investigation and prevention of organized crime and money laundering. 

In 2004, Mathers established CHRISMATHERS INC. He provides crime and risk consulting services, specializing in fraud, money laundering, terrorism and organized crime issues.

Mathers has appeared on television and radio interviews on CNN, PBS, MSNBC and media outlets around the world. His experiences posing as a gangster, a drug trafficker and a money launderer are the subjects of his book, “CRIME SCHOOL: Money Laundering.”

He also has served as a consultant on several feature films and documentaries, including “Don’t Say a Word,” starring Michael Douglas, “Werewolves – The Dark Survivors” and the National Geographic Channel’s “The Egyptian Job.” A film company has an option on his book, and “Treasure Agents,” a documentary on art theft, with funding from PBS and Discovery (U.K.), is in pre-production.

Mathers will be a keynoter at the 24th Annual ACFE Global Fraud Conference, June 23-28 at the ARIA Resort & Casino in Las Vegas, Nev. 

He recently spoke to Fraud Magazine.

FM: When you posed as a money launderer, what were some of the ways you were able to prove the illegal sources of money? 
 

CM: The problem is trying to get the bad guys to admit that the money came from a predicate offense [a crime that produces the funds that are to be laundered]. You know that the guy is a criminal, or you wouldn’t be targeting him, but that isn’t enough for the court. Our old adage was that we only worked on targets who had “demonstrated a predisposition to the committing of criminal offenses.” 

When I posed as a money launderer, I had one trick that I used that worked pretty well. I would say to the bad guy, “Look, I don’t care where your money comes from or how you made it. But if you made it from (I’d refer to an appropos crime), I need to know. You don’t have to say the words, just nod or something. Because if that’s how you made it, I am going to have to do a couple of extra things to the money to clean it up. I won’t charge you extra. I will be doing it to protect myself as much as you.” 

In retrospect, it seems kind of lame, but it worked more often than it didn’t. You would see the guy, right there on the video, nodding like an imbecile.

FM: How were you able to ingratiate yourself to fraudsters?
 

CM: Fraudsters are always ego driven. I think their egos are often more important to them than the money. You have to appeal to their baser instincts. Find out what aspect of themselves they are the most proud of and exploit that.  

 

If the guy is good at something, pay him compliments, but don’t be too obsequious.

FM: What advice would you give to fraud examiners who need to infiltrate criminal networks? 
 

CM: The game is all about personalities. People do business with people that they like. There are a lot of tricks like manipulating conversation, non-verbal cues, etc. But for someone who is just starting out, there are only a few things you need to know. 


Make really good notes. Good notes are the key to every successful case. You will have notes, and the bad guys won’t. The judge and the jury will be more impressed the more detailed notes you have.

 

Make the bad guys want to be you when they grow up. Speak well. Dress well. Show some breeding. Never interrupt. Always let them speak.  


Don’t make your cover story too complicated. Make your undercover persona exactly the same as your true self. As much as possible. Just change where you work. That way, you will only have to remember a few lies.
 


People will think of you, what you think of you. My mother always told me that, and it works. As George Costanza said, “It’s not a lie if you believe it.”

MarchApril-chris-mathers-2FM: What spurred you to leave governmental work for the private sector? And then to begin your own business?

 CM: When I was with the Mounties, I worked undercover in Europe on this big corruption case. The guy in charge of our drug unit in Montreal was corrupt and was providing information to the gangsters. When the investigators came to interview him, he went into his office and shot himself. It was pretty bad. 


The undercover case was super secret. The chain of command was from the commissioner to the cover team to me. That is pretty unusual in an organization like the RCMP, bypassing five or 10 levels of command. But I got to know the commissioner, Norman Inkster, pretty well because, sometimes, when they were briefing him over the phone from overseas, he would ask to speak to the undercover agent, which was me. [Inkster is a CFE and was the keynote speaker at the ACFE Sixth Annual Fraud Conference in 1995 – ed.]
 


Norm was also the head of Interpol. He retired and joined KPMG where he headed up its Forensic Group Worldwide. A few months after he got there, I was offered a spot. I thought, what the heck? Maybe it will be another adventure. It was. 
  

 

Norm and I have become very close friends over the years. When he retired, I had just written my book and had started doing professional speaking engagements. I decided to leave and try to do my own thing. KPMG was a great place with remarkable people. I loved my time there, and I still see many of my old colleagues regularly. 


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Investigating Money Laundering (Online Self-Study)
Money Laundering Prevention: Deterring, Detecting and Resolving Financial Fraud (Book)
The Washing Machine: How Money Laundering and Terrorist Financing Soils Us
2013 CFE Exam Prep Course, US Edition
2013 CFE Exam Prep Toolkit, US Edition

 

 

 
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