Web of Lies

Unraveling Defenses of Unverified Affluence


By Colin May, M.S., CFE;Mark F. Zimbelman, Ph.D., CPA

 

colin-may-80x80  mark-zimbelman-80x80.jpg Starting Out  

Our previous column discussed the importance of identifying red flags. Now, we take the next logical step: How do we deal with subjects' affirmative defenses about the sources of allegedly ill-gotten gains? Based on case law and investigative practice, finding the truth is a process - more art than science. Dismantling a "web of lies" can strain even the most experienced investigators, but it is an important skill that new and budding fraud examiners should begin to master.

UNVERIFIED AFFLUENCE

As investigators, we frequently encounter unexplained affluence - someone has accumulated wealth with no explainable source of income. We believe an even better phrase to describe this condition is unverified affluence because we want to identify subjects whose sources of wealth have not been independently verified. We will be able to show they are truthful or deceptive by asking the right questions and obtaining documentation to verify sources of wealth.


 

 


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By Mark_Walsh_3
It's interesting that a pre-employment background investigation ended with a conviction for wire fraud. Why would the prospective employer keep questioning how the pool was built, once the establish the candidate was a liar. Most would've stopped the process once the potential employee was found to be untruthful.