What can CFEs learn from private investigators?

There’s a good possibility you’re a Certified Fraud Examiner. But you’re probably not a licensed private investigator. Are you missing out? Not necessarily, but some CFEs believe their hard-won PI skills burnish their fraud examiner careers and make them better professionals.

Leah Wietholter, a licensed PI, is one of those CFEs. In a case she worked, an engineering business came to her firm, Workman Forensics, after its managers suspected a subcontractor was stealing from them via overbilling. The subcontractor had burned through the budget granted by the engineering firm, then requested more money from the engineers, spent that and requested even more. And he wasn’t delivering adequate work.

The engineers invoked the audit clause in the subcontractor’s contract. Wietholter sent him a letter asking for explanations and records, but the subcontractor never responded. “Some fraud examiners at this point might have thought, ‘I can’t get much further because I have no financial records,’” Wietholter says. “But my PI instincts kicked in, and I began an open-source intelligence [OSINT] investigation. We found that the subcontractor in turn subcontracted to a guy in India who was charging only $30 an hour, but the original subcontractor was billing the engineering firm $150 an hour.”

Wietholter then discovered through OSINT that the original subcontractor wasn’t even a licensed engineer but had been using the stolen licensing number of an actual engineer. OSINT is the process of obtaining intelligence in an investigation through publicly available information. [See “Everything about Open Source Intelligence and OSINT Investigations (2021),” Maltego, tutorial, Oct. 31, 2021.]

“I never got to look at the original subcontractor’s invoices and time sheets like I would in a financial investigation, but through my PI work I was able to write a report for the client so they could end the subcontractor engagement and turn it over to law enforcement,” Wietholter says. “I was able to get the job done successfully without looking at one spreadsheet!”