A fraud case is any activity that relies on deception to obtain a benefit from another person or organization. Generally, fraud is classified as either criminal or civil, and the penalties vary by state. Criminal fraud cases involve monetary punishments while civil cases involve compensation and other remedial relief for losses caused by the fraudulent actions.
Fraud investigations are painstaking efforts that require dedicated resources and can expose weaknesses in an organization’s risk management. Often, a fraud investigation will reveal that the apparent perpetrator was not guilty at all and could be reformed.
A good fraud case starts with a careful review of the relevant records and documentation. The investigator will then decide whether a case is worth pursuing. This decision is based on the factual basis and should consider the impact of the fraudulent activities on the company’s operations, financial well-being and reputation.
The investigative process for a fraud case should include interviewing the alleged perpetrator and those who have knowledge of the suspicious activities (whistleblowers, other employees, or external sources). Obtain a statement of intent, if possible, and try to get helpful admissions that eliminate any innocent explanations for what happened.
Then the investigator will determine the scope of the fraud and decide where to seek evidence and interview others who may have been involved. The gathered records should be documented and shared with all stakeholders, including the alleged perpetrator, to demonstrate the thoroughness of the fraud investigation.