Managing the Case


In this chapter:

  • Assembling the Team: Where to Start
  • Assembling the Team: Company Insiders
  • Assembling the Team: Key Participants
  • Assembling the Team: Outside Consultants
  • Importance of Credentials
  • Management and Supervision of Staff
  • Work Programs and Checklists
  • Document Management
  • Preserving Evidence
  • File Maintenance
  • Investigative Software
  • Professional Standards
  • When to Stop Investigating

What should you keep in your investigative file? From the book:

It is important for all members of the fraud investigation team to understand and apply good file maintenance procedures. Particularly in cases that may escalate to litigation, rules should be followed by the fraud investigators (expert witnesses for litigation purposes) to ensure that the expert’s report and testimony are not tainted.

Anything that was used to help form an opinion in the case should be kept with the file. The fraud investigator may need to refer back to that item, and the other side of the case has a right to see it as well. It is not a good idea to haphazardly throw out documents in a case. It is more appropriate to keep everything that was produced for you, and segregate the documents into two sets: items that will be used in your analysis and items that will not be used.

Why wouldn’t you use something that was produced by a party to the litigation? Documents are often produced that have no bearing on the fraud investigation. This might include contracts with unrelated parties, personnel files of uninvolved employees, details of transactions that are not relevant to the case, or account statements for customers that are not included in the investigation.

There is no rule of thumb for including or excluding documents from your investigation. An experienced fraud investigator should go through the documents produced and decide which ones need detailed examination on a case-by-case basis. Do not make the mistake of relying on the client’s judgment about what you need or do not need. Look at all available documentation related to the matter, and make an independent decision about whether items are relevant.

Note-taking is an important part of any professional’s work. Thereare varying schools of thought on the issue of taking notes during afraud investigator’s discussions, meetings, field work, interviews, anddocument review. On one end of the spectrum is the advocate for no notes. To this investigator, if there are no notes, there is nothing for opposing counsel to examine if the case ends up in court. While that may sound like a clever strategy, it doesn’t seem to make a lot of practical sense. I haven’t met anyone who is able to remember everything they ever heard or saw, so notes are a way to refresh one’s memory during an investigation. No notes also make it difficult for team members to evaluate what others have done or seen in a case. The absence of notes imposes limitations on the staff that are not practical or helpful.

On the other end of the spectrum is the investigator who believes everything should be written in the notes. Even one tiny detail should not be lost if proper notes are kept of everything. The problem with that is that in the case of litigation, all those notes will eventually be discoverable by opposing counsel. Your working theories or lines of thinking will be exposed, and any preliminary conclusions you may have written about will be open to scrutiny.

I prefer a moderate approach, leaning toward the “less is more” theory. A fraud investigator should take modest notes on facts only, noting details that might become important to the investigation. It is appropriate to make notes about who is responsible for certain functions in a company, how the work flows, dollar figures in question, and what the procedures are.

Avoid notes that may embarrass you later. You do not need to make notes about anyone’s appearance or demeanor. If someone was rude, you will remember that. There is no need to put it in your notes and potentially give rise to a later claim that you are biased or had a negative attitude toward someone. Avoid writing about preliminary opinions in your notes, or about your initial impressions on guilt or innocence. Take a “just the facts” approach to note-taking, and there will be less to criticize later. Make sure your notes include dates of meetings and who was present and providing key information. With this fact-based approach, you will have the important points on paper in case you need to refer to them, but you do not have anything that calls your opinions and independence into question.

As will be discussed in Chapter 11, it might be necessary to disclose in your report what documents you relied on in forming your opinion. Good file maintenance practices will help this process as well.