Fraud Eats Strategy

Losses from a major financial crime can have a long term, negative impact on an organization.  The odds of recovering those losses are not great. In fact, many fraudsters embark on their criminal path because of the financial wreckage that is their personal lives. Divorces, job losses, health crises and addictions often cause otherwise decent, law-abiding people to lose their minds, become desperate and commit fraud. Fraudsters who committed crimes because of crushing debt don’t usually represent an attractive option when it comes time to seek financial recovery. Third parties sometimes do. The most reliable avenue for financial recovery may be your insurance carrier. Fraud losses incurred because of employee dishonesty are probably covered under your commercial crime or fidelity policy. If the bad actors in your company are board members or officers, the losses may be covered by your Directors & Officers (D&O) liability policy. Other policies that could come into play depending upon the facts include your general liability, property and casualty, professional liability and cyber policies.  

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“It's better to keep your mouth shut and appear stupid than open it and remove all doubt”. Certainly, this quote, who depending on who you ask is attributable to Mark Twain, Abraham Lincoln or Confucius, is a great way to encapsulate the importance of crisis communications.  

We have all seen examples of how things can go from bad to worse when someone steps to the podium during a crisis that is unfolding and makes public pronouncements without first gathering the facts. Mishandling crisis communications can shift the focus away from the crisis at hand and make the company’s handling of the crisis the bigger story. Crisis communications is a critically important tool in the company’s arsenal during a high-profile investigation.

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In this episode, we talk about remote witness interviews and how to make the best of a bad situation using time-tested interrogation techniques and other methods. While things are starting to return to something resembling normal, our use of video conferencing as a business tool is here to stay. I’ve been fielding a lot of questions about use of body language and other techniques to try to limit a witness or deponent’s ability to be coached or misdirect the interviewer. With us today is a subject matter expert on interviewing and interrogation skills, Michael Bret Hood. Bret is the Founding Partner of 21st Century Learning & Consulting, LLC where he teaches leadership skills. He is also an adjunct professor of Corporate Governance and Ethics at University of Virginia. 

For more information visit: https://fraudeatsstrategy.com/

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Some human beings are wonderful. Some are middle of the road and some are truly terrible.  Terrible human beings are frequently indistinguishable from wonderful ones.  How can we tell them apart? In the context of business relationships, the tip of the compliance spear in attempting to separate the good from the bad is frequently open source intelligence investigations. Sometimes referred to as investigative due diligence or background investigations, this investigative tool can be a game changer when it comes to counterparty risk.

Since leaving the FBI in 1996, I have overseen tens of thousands of such investigations and have designed and implemented programs to risk rank counterparties and perform investigative due diligence of customers, borrowers, investment targets, vendors and intermediaries commensurate with their potential risk.

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In this episode we going explore “bullet-proofing” your FCPA acquisition due diligence, merger integration and the government’s recent revisions to the FCPA Resource Guide and Evaluation of Corporate Compliance Programs guidance. Gone are the days when the potential bribery and corruption risk of an acquisition can afford to be something assessed at the 11th hour or not at all. Successor liability stemming from undiscovered bribery activity can give rise to devastating financial consequences. Joining me today is Skadden Arps partner and FCPA luminary Gary DiBianco. Gary’s practice focuses on advising senior management and boards of directors faced with complex government or internal investigations.

For more information visit: https://fraudeatsstrategy.com/

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Successor liability under the Foreign Corrupt Practices Act has been a risk for companies since the statute was first enacted. But until recently, the DOJ and SEC have been deliberately vague in terms of the guidance offered and their expectations about FCPA due diligence and the time imperatives surrounding post-merger integration as it relates to combining compliance programs. That all changed in October of 2023 when Deputy Attorney General Lisa O. Monaco announced the implementation of DOJ’s Safe Harbor Policy for voluntary self-disclosures made in connection with Mergers and Acquisitions.   Put succinctly, DAG Monaco said “we want to incentivize the acquiring company to timely disclose misconduct uncovered during the M&A process.” She further announced: “Going forward, acquiring companies that promptly and voluntarily disclose criminal misconduct within the Safe Harbor period, and that cooperate with the ensuing investigation, and engage in requisite, timely and appropriate remediation, restitution, and disgorgement – they will receive the presumption of a declination. Of particular note is that in order to qualify for the Safe Harbor, companies must disclose misconduct discovered at the acquired entity within six months from the date of closing. That applies whether the misconduct was discovered pre- or post-acquisition.

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In this episode, we delve into the psychology of white-collar criminals. White-criminal criminals are often treated differently than other categories of criminals which provokes a response unlike other crimes. White-collar criminals are not better than or more deserving of leniency than other categories of criminal, it’s just that they are wired differently and understanding that fact can better position us to help safeguard organizations from the types of crimes that white-collar criminals commit. Joining Scott on today's episode are two experts on the subject of white-collar crime psychology, Nicolas Bourtin and Eugene Soltes.  

For more information visit: https://fraudeatsstrategy.com/

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In this episode we have an ambition agenda. We are going to provide a high level overview of virtual currencies, blockchain technology and the vital role of crypto exchange, touch upon some spectacular failures in the crypto space, how the incidence of crypto crime is going down and the role that exchanges like Binance are playing in the mitigation of crypto crime.

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The FBI’s Behavioral Science Unit and Violent Crime’s Apprehension Program (ViCAP) help

coordinate cross border violent crime by assisting police departments with behavioral science profiling and by maintaining a massive law enforcement database on unsolved violent crimes largely serial murders. 

Joining me today is former FBI Assistant Director Frank Figliuzzi. In total, Frank served as a special agent for 25 years. Frank is the author of the new book: Long Haul: Hunting the Highway Serial Killers. It is an in-depth examination of this ongoing initiative by the

FBI together with police agencies throughout the U.S.

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Human trafficking is the fastest-growing transnational crime with more than 25 million people held in forced labor and sexual exploitation. As if these numbers aren't horrifying enough, 10 million of those trafficked people are children, and yet rarely are US organizations focused on human trafficking's impact on their operations, much less society as a whole. In fact, most of us consider human trafficking to be a problem occurring in developing countries and that there are more pressing issues that should demand our attention and compliance resources. That false narrative is part of what makes human trafficking so difficult to counter.

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