The Serious Fraud Investigation Office (SFIO), headed by Bas A.S. van Leeuwen (LL.M., Esq.), attorney at law and forensic auditor, provides the services required to help private and public organizations identity the nature and extent of the problem and deliver appropriate remedies: Fraud Risk Assessment, Fraud Risk Management, Fraud Investigations, Compliance Assistance, Integrity Due Diligence, Forensic Business Intelligence, Litigation, Negotiation and Reputation Management.
The SFIO focuses on fraud with a financial dimension, including tax fraud (Sections 68 and 69, General State Taxes Act), money laundering (Section 420bis et seq., Criminal Code) and forgery (Section 225, Criminal Code). Bas has also a wideranging experience in defending clients in criminal investigations into related offences, including deception/embezzlement (Sections 326 and 321, Criminal Code), bankruptcy fraud (Section 340 et seq., Criminal Code), corruption (Sections 177 and 328ter, Criminal Code), breaches of the Money Laundering and Terrorist Financing Prevention Act and sanctions legislation (Sections 1, 1a and 2, Economic Offences Act), and breaches of the Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, Official Journal No. L.119 of 4 May 2016, p. 1 et seq. (General Data Protection
Create a culture of honesty, openness, and assistance
Creating a culture of honesty, openness, and assistance includes three (3) factors: (1) hiring honest people and providing fraud awareness training; (2) creating a positive work environment, which means having a well-defined code of conduct, having an open-door policing, not operating on a crisis basis, and having a low-fraud atmosphere; and (3) providing an employee assistance program that helps employees deal with personal pressures.
Eliminate opportunities for Fraud
The five (5) ways to eliminate Fraud opportunities are: (1) having good internal controls; (2) discouraging collusion between employees and customers or vendors and clearly informing vendors and other outside contacts of your company’s policies against fraud; (3) monitoring employees and providing a hotline (whistle-blowing system) for anonymous tips; (4) creating an expectation of punishment; and (5) conducting proactive auditing.
Comprehensive approach to preventing and deterring Fraud
Most organizations do not have a comprehensive approach to preventing and deterring Fraud. In fact, most companies don’t think about fraud until they experience one. When fraud occurs, they go into crisis mode, investigate and try to resolve the fraud, and then wait until another fraud occurs. A more comprehensive fraud-fighting approach would involve:
- creating the right kind of modeling and tone at the top,
- educating and training employees about fraud,
- assessing risks and putting proper controls in place,
- having reporting and monitoring systems in place,
- proactively auditing for fraud and then, when fraud does occur,
- investigating and following up on the fraud.
The first element of a good fraud-fighting system is having management, the board of directors, and others at the top of an organization positive “tone at the top.” This involves two (2) steps: (1) caring enough about having a positive organization that effective fraud teaching and training is conducted throughout your organization and a well-defined corporate code of conduct is promoted and (2) setting a proper example or modelling appropriate management behavior.
The second element of a good fraud-fighting system is educating employees and others about the seriousness of fraud and informing them what to do if fraud is suspected. An awareness training might help your organization to prevent fraud and ensure that fraud do occur are detected at early stages, limiting financial exposure to the corporation and minimizing the negative impact on the work environment.
The third element of a good fraud-fighting system involves integrity risk assessment and having a good internal control system. Having a good system of controls means that there will be an explicit study of all frauds and why they occurred, together with implementation of control activities necessary to prevent future occurrences of the same types of frauds. Our analysis involves determinations by people in management, the board of directors, and others at the top, audit, security, human resources, control and finance of why and how the fraud involved. Such analysis are focused on the individuals who were involved, the controls that were compromised or absent, the environment that facilitated the fraud, and related factors. The results are important in understanding the kinds of preventive measures that are needed within the environment in which the fraud occurred.
The fourth element of a good fraud-fighting system includes having a system of reporting and monitoring.
The fifth element of a good fraud-fighting system involves having proactive fraud detection methods in place. Proactive active fraud detection methods are not only effective in detecting fraud, but knowledge of their use is a good fraud deterrent.
The sixth element of a good fraud-fighting system involves having effective investigation and follow up when fraud occurs. Effective investigation means your organization must have formal fraud polices stating who will carry out all elements of an investigation. Your investigation procedures must include: (a) who will conduct the investigation, (b) how the matter will be communicated to management, (c) whether and when law enforcement officials will be contacted, (d) who will determine the scope of investigation, (e) who will determine the investigation methods, (f) who will follow up on tips of suspected fraud, (g) who will conduct interview, review documents, and perform other investigation steps, (h) who will ultimately determine the corporate response to fraud, disciplines, control, etc. A strong prosecution policy must have the support of your board of directors, and others at the top, and must be informed if someone commits fraud and is not prosecuted. The single greatest factor in deterring dishonest acts is the fear of punishment. In order to obtain cooperation from law enforcement officers and the justice system, it is almost always necessary to conduct a thorough an complete investigation (usually including obtaining a signed confession) before the overworked law enforcement agencies and criminal justice systems can accommodate the prosecution.
Proactive Fraud Auditing
Very few organizations actively audit for Fraud. Rather, their auditors are content to conduct financial, operational and compliance audits and to investigate Fraud only when symptoms are so egregious that fraud is suspected.