Four Tips for Preparing a Fraud Case for Law Enforcement

KPM Fraud Update link to blog.

21 Dec Four Tips for Preparing a Fraud Case for Law Enforcement

If you have caught an employee stealing from your company, you may think that turning the person over to the police will result in prosecution. That is not necessarily true. Law enforcement officials pursue and reject cases for many reasons. So, if you are determined to request prosecution of an occupational fraud perpetrator, take the following steps to help prepare the case.

  1. Make it Easy to Follow

In the rush to submit a case to law enforcement, it is easy to forget that the police and prosecutors will not necessarily understand your industry’s jargon or understand your business’ accounting records. Make it easier for everyone to understand what the perpetrator might have done and why it deserves their attention. Preparing a document that defines acronyms and common terms used in documents could be helpful. Or if it helps make the case compelling, you might work with your attorney and CPA to develop charts to explain how you believe the fraudulent transactions took place.

  1. Designate a Primary Point of Contact

Once you have submitted a case to law enforcement, designate one employee to serve as a liaison to law enforcement. Your liaison should have access to the people (including legal counsel) and records needed to answer law enforcement’s questions quickly. Any delays in responding to requests can derail a case or result in a prosecutor’s decision to abandon it.

  1. Involve Your Attorney

As the case goes on, law enforcement may ask your business for additional documentation. Make sure these requests are reviewed by your company’s legal department or outside counsel. Even though your business is the fraud victim, your attorney should determine whether law enforcement needs to produce a subpoena before you hand over documents. Just keep in mind that asking for a subpoena can create extra work for law enforcement and the request may be denied.

  1. Do Not Take Law Enforcement for Granted

Defrauded business owners sometimes assume that law enforcement exists to help return stolen funds, but federal, state, and local authorities have finite resources and simply cannot pursue every case. If your company receives law enforcement assistance with one fraud case, then experiences a subsequent fraud incident involving the same set of circumstances, law enforcement could decline the second one. Make sure that if your business experiences fraud, the incident motivates you to fix broken internal controls and possibly upgrade your antifraud policies.

Contact us for help investigating fraud and strengthening internal controls.