Six Costly Mistakes to Avoid When Fraud Is Suspected

This article on costly fraud mistakes from Hughes Pittman & Gupton echoes a lot of what we’ve learned from clients over the years.: https://bit.ly/SixCostlyMistakestoAvoidWhenFraudIsSuspected

Here are some other things we’ve learned:

1. Making a rush to judgment can also lead to missed theft. One of our cases involved a theft of several hundred thousand dollars. The company fired the employee based on this evidence. After further investigation, the actual theft was several million dollars.
2. Letting word of an investigation get out can also cause honest, well-meaning employees to provide erroneous information in an effort to be helpful. This information also has to be investigated, thereby prolonging the time and cost of the investigation.
3. Proceeding without notifying legal counsel and HR professionals is always a bad idea. To put it simply, you don’t know what you don’t know.
4. Failing to maintain a document trail is only part of the problem. The other part is failing to maintain a proper document trail. Will this investigation end up as a criminal case or a civil matter? That will affect how evidence should be collected.
5. Not realizing that U.S. practices don't apply overseas is a mistake that can be remedied by consulting with legal counsel and HR professionals.
6. Not holding executives to the same standards is not only a bad investigative process, it’s also potentially a legal issue. Again, consult with legal counsel.

In our experience, the most successful investigations include a team of professionals. This includes both internal employees (inside counsel, HR, finance, accountant, subject-matter experts, witnesses) and external professionals (outside counsel, forensic accountant, private investigator).