Feb 07

3 Tips for Investigating Suspected Fraud

With any investigation into allegations of workplace misconduct, it is imperative that the investigator maintains a neutral and objective approach, and does not make “cut corners” in the investigation process. Following the proper procedurally fair process will not only ensure that your investigation is beyond unfounded criticism, it will also mean that you are being truly diligent in obtaining, collating, comparing and critically examining the evidence and make reliable conclusions on it.

As we noted in the recent case of Kumari v Metro Trains Melbourne [2017] FWC 605, the investigator there made various assumptions and inferences regarding the somewhat limited evidence that he did have to hand about the suspected fruad. This meant that the findings were not reliable, as the investigation was not sufficiently rigorous.

Here are out tips to ensure you do take all the steps you can to conduct a comprehensive and reliable investigation into suspected fraud:

1. Consider trails of evidence

Not surprisingly, fraud often can occur without a trail of witnesses! You may therefore need to think about what other trails of evidence may be relevant. For example, CCTV or other video recording made possibly even for other reasons could be useful to consider.

2. Remember identity fraud is possible

Usually, it may be that you have been given notice of alleged fraud due to a discrepancy surfacing literally out of nowhere, or customer feedback “after the event”, an anonymous whistle-blower tip off, and/or the employee respondent being on annual leave and another employee noticing something irregular about transactions in their absence. You will probably initially be examining a lot of written, electronic and/or invoice records.

Make sure you do not assume that the “key account holder” who presumably operated the bank account, petty cash and/or other access point to company assets was the actual individual who actually did so. Sometimes, individuals can obtain passwords and assume other employee’s identities.

3. Provide an opportunity to obtain comments

Make sure that you do, once you gathered all the relevant evidence, put that evidence for an opportunity to obtain comments from the employee respondent. Do also explore giving the relevant documents to the individual so that they can consider them after the interview is finished.

Certainly, one needs to be very clear about what the available evidence may appear to indicate to you, but at the same time one should not assume any conclusions without a full exploration and opportunity to seek response from all relevant employees. A paper trail alone will be insufficient to provide the basis for a finding of dishonesty or fraud on the part of an employee.

Free Webinar

Join Jason Clark, Associate Director, as he discusses what you should do if you suspect fraud in the workplace as well as how to mitigate the risk of fraud in the first place. Register now to attend Worklogic’s free webinar “What to do if you suspect fraud at work” on Thursday February 22, 2018 at 12.30pm.

About Jason Clark

Jason ClarkJason Clark is Worklogic’s Associate Director, based in Sydney.  Jason has extensive experience as a workplace investigator, investigating a range of issues including fraud, bullying, harassment and sexual misconduct. He has also assisted numerous organisations develop strategies to minimise poor behaviour and encourage a positive workplace culture.

Prior to joining Worklogic, Jason was the Joint Investigation Office Commander for the Australian Defence Force Investigative Service. Acting as mentor and leader, Jason managed a team of investigators in a dynamic environment, handling complex cases. For more advice, please email Jason or give him a call (02) 9152 8706.

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