"I want to welcome you to the first-ever ACFE Middle East Fraud Conference. I am excited to be here and I look forward to sharing this time with you to learn, grow and reinforce the global fight against fraud," said ACFE Vice President and Program Director Bruce Dorris, J.D., CFE, CVA, during the opening of the 2016 ACFE Fraud Conference Middle East in Dubai, February 14-15.
Under the kind patronage of His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, the Deputy Ruler of Dubai and Chairman of the Financial Audit Department, and hosted by the FAD of Dubai, the inaugural conference brought together more than 400 anti-fraud professionals to learn the latest anti-fraud techniques and tools.
Featured speakers included Prof. Dr. Marco Gercke, Director of the Cybercrime Research Institute; Jeffrey Robinson, author and international expert on organized crime and fraud; and Hamed Kazim, CEO of HK Consulting. Concurrent sessions focused on the global nature of fraud by teaching attendees how to address cybersecurity risks in the Middle East, taking fraud examinations to other countries, and how to navigate global expectations for addressing fraud risk and the investigative process. Live interpreters enabled attendees from multiple regions to interact and partake in the presentations as they happened.
Focusing on the human element
During the first keynote presentation, Hamed Kazim spoke about the importance of tackling what he calls the "common denominator" of fraud: the human being. While we live in a world that's filled with huge global challenges, including the impact of technology on our lives, businesses and governments, the human element shouldn't be ignored.
"When you look at the resources dedicated to addressing the human element, it's minimal in comparison," said Kazim. "We spend billions of dollars globally on fraud detection, on professionals, on technology, etc. … But it all boils down to that human being."
Kazim used an example from his own experience. He heads the audit committee for his organization, so he commissioned the internal audit team to use data analytics to compile data from the past 10 years to look at fraud findings. The results showed that 70 percent of fraud was committed by people that shouldn't have been hired in the first place, so they implemented new steps into the organization. Kazim said they began emphasizing the induction of entry-level employees with much more scrutiny beyond the norm; he advised that other organizations go beyond normal reference checks in the hiring process.
It doesn't stop at the hiring process, though. Kazim said you have to monitor employees' behavior and performance during their careers, and you have to create a culture of healthy awareness in your organization. Make it easier for people to report tips or to blow the whistle on fraud.
Kazim also discussed the importance of how companies handle budgetary constraints or budgetary cuts, especially when it comes to employee layoffs. "The way you go about laying off employees can make a huge difference," said Kazim. "You're either upfront to your employees and you tell them, ‘We're going through an economic recession, we have to tighten our belts, and that's how we're going to go about it, in a very transparent way.' Because if you don't actually handle it well, it will demoralize the staff. When you demoralize the staff, what will happen? Productivity will drop and the incentive for creating fraud increases substantially."
Kazim wanted attendees to takeaway these key points from his presentation: It's important to focus on technology. It's important to have firewalls, to have fraud detection systems, to have awareness, etc. "They're all important, I'm not taking away the importance of having these functions," said Kazim. "But we have to go back to the basics. Focus on the single most important element in these things, and that's the human aspect."
His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, the Deputy Ruler of Dubai and Chairman of the FAD (4th from the left) and His Excellency Abdulla Mohammed Rashid Al Huraiz, Acting Director General of the FAD (4th from the right), watch keynote speaker Jeffrey Robinson.
Fraud fighters are tackling a pandemic
"In case you haven't noticed, and I'm sure you have, fraud has become pandemic around the world," said Jeffrey Robinson, bestselling author and international expert on organized crime and fraud, in his keynote session. "I mean seriously, it has become pandemic. If fraud were a disease, political leaders of all our nations would have to declare a global health emergency."
And why has fraud spread like this? According to Robinson, it's not getting the attention it should. "If you are Bernie Madoff and you've stolen 50 billion dollars, yeah, that does get an awful lot of attention." But it only garnered attention after the fact — after $50 billion had been stolen and even though the clues were there all along.
"The problem is that except for you guys, the ACFE, no one's really paying attention to it." Robinson went on to highlight law enforcement's priorities. The No. 1 priority for law enforcement is terrorism, then drug trafficking, followed by firearms and then sex offenses. "Yet fraud, if you put a monetary value on fraud, it's second only to drug trafficking of all the crimes. It's right up there with drug trafficking. But it's really far down on the list of crimes that get investigated."
But people aren't reporting fraud either. Businesses that get hit by fraud feel embarrassed and don't want to report it to their shareholders. Individuals that suffer a loss from fraud feel violated or stupid, and decide to forget about it because of the feeling of foolishness for allowing it to happen in the first place.
Robinson referred to this as a "two-way street crime." For a fraudster to be really successful, the victim has to cooperate in some way, and that's why victims "feel so stupid." For example, take a victim of a hacking that used the word "password" as their password. They've easily set themselves up to become a victim of fraud.
Robinson explained that the best defense any company can have when it comes to fraud is total transparency. Remove the theory of "unshareable problems." Pay attention to your employees. Help them. Tell your people that you're going to share in their problems.
Robinson finished by expressing the value of fraud fighters. "If it weren't for you — and I am so high on this organization, because you're really the only people standing in the way of the fraudsters and havoc — if it weren't for you asking at every turn ‘How come nobody died?' the 21st century is guaranteed to belong to the fraudsters. You're my heroes."
The ACFE is sponsoring three additional conferences in 2016: Fraud Conference Europe in Brussels (March 20-22), Fraud Conference Canada in Montreal (September 11-14), the 27th Annual ACFE Global Fraud Conference (June 12-17) in Las Vegas and Fraud Conference Asia-Pacific in Singapore (November). We hope to see you at one of these events! (Learn more at
ACFE.com/Conferences.)
Emily Primeaux is the assistant editor of Fraud Magazine. Her email address is: eprimeaux@ACFE.com.