When investigators have a suspect in their sights and are looking for evidence linking them to the crime, they ask themselves what type of person they are dealing with. Different personalities leave different trails of evidence. So if you get to know your Joe, you will boost your chances of finding proof. In Part 2 of our series Myths about Fraud Investigations, we discuss four types of white-collar criminals that investigators should know.
Please note, this is by no means an academic typology based on data points collected by people in white lab coats. It is simply my personal experience in 15 years of investigations, subjective as that is. So take it with a grain of salt.
Normally, white-collar criminals are no spring chickens. Typically middle-aged, they have collected 10+ years of experience in their respective field of business before they start defrauding their employer (having learned the lay of the land first). But as always, there are exceptions.
Personality #1 – Young and Digital
Some ambitious types get into the game early in their careers. The young ones are excellent in using digital technology; got into crypto early; communicate mostly through apps, not e-mail; and know how to delete traces of evidence on their company-issued laptops and phones. (So, likely you won’t find much by doing computer forensics.) They have a weakness, though: they are hyper-focused on their devices and the open internet. So with this type, you have to look for external or real world information. Namely, information that exists outside of where they work, such as in commercial (and thus harder to find) deep-web public sources; and the real world, such as friends, family or co-workers. The latter is an excercise in recruiting human sources – wittingly or unwittingly – but this effort is outside of the fraudster’s area of digital expertise and that makes it promising.
Personality #2 – Young but Analog
Some up-and-comers know their smartphones and laptops well, but are not as deep into devices as the digital enthusiasts above. They might work in traditional fields such as engineering, real estate and construction, or medicine. Because they are still in the early stages of their careers, they have to put their own hands into the cookie jar if they want to steal – no staff to delegate to yet. With this type, you stand a good chance of finding relevant information on their personal company-issued devices because they are not as adept at erasing all their tracks and have to do the work themselves.
Personality #3 – The Grey-Haired Executive
This type is a tougher nut to crack. Typically, a managing director of a business division or a country manager. These Grey-Haired Executives tend to communicate very little in writing. They know that e-mails are their natural enemy (they followed the VW Dieselgate probe with great interest), so they never e-mail anything of consequence anymore. When you write to them about a management problem that needs fixing, they just write back, „Call me.“ They delegate a lot inside the company through layers of hierarchy. Plausible deniability is the name of their game. So part of the evidence for the fraud may be found on their coworkers’s devices. Interestingly, the Grey-Haired Executives are convinced that what they do outside of the company is covert by nature. So external information is how you can catch them. Typically they screw up in the areas of how to set up a shell company anonymously, or how to involve family members in their fraud without leaving a trail in public records. Because they are older, they are mostly beginners when it comes to using messaging apps. So if you are authorized to collect communication from their company-issued devices, there is a good chance they forgot to delete some interesting chats.
Personality #4 – The Big Kahuna
This is the top-level executive, think CEO or founding partner. I netted a big fish like that some years ago, a former president of a stock exchange-listed corporation who was running a multi-million euro side business with real estate. He was similar to the Grey-Haired Executive above, in that he would not communicate anything of relevance in e-mails or do anything digitally himself, so forget IT forensics. Analog to the core, he instead delegated his dirty work, but outside of his workplace: to his personal lawyer, accountant and wealth manager. He also smartly stayed away from involving family members. The key with this type is to uncover their entire private network of professional helpers first, then run searches on these individuals and companies worldwide to find the inevitable shell companies needed for a multi-million euro fraud. In this social stratum, there are also bound to be some „competitors“ who vacation in the same hot spots and know about skeletons in the Big Kahuna’s closet. So you may want to go the extra mile and talk to these people – it might point you in the right direction.
Sebastian Okada heads Corporate Trust’s Investigation & Fraud Prevention department in Munich. Since 2004, he has conducted fraud investigations at home and abroad.
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