Internal Fraud Investigation at Lakes Inc Assignment

Internal Fraud Investigation at Lakes Inc - Assignment Example Next were co-conspirators then the main suspect. Professionalism was maintained as was respect for the suspects rights. All interviews and proceedings were recorded. A confession was obtained from the key suspect after a leniency deal with the co-conspirator. The investigation recommended an out of court settlement. Introduction Internal fraud is increasingly becoming a major concern for organizations either with staff abusing their positions, making false claims or outrightly obtaining company assets by unauthorized means. While staff should be the first line of defense against fraud attacks, some staff members take advantage of this and become the fraudsters. The UK leading anti-fraud agency, CIFAS reported a 70 percent increase in internal fraud by employees in the half year of 2009 (Jones, 2011). The rise in staff fraud necessitates investigations in the most professional and effective manner to root out the offenders, recover stolen property and mitigate such future occurrences. This paper will give a narrative of Lake Inc. case where the Associate purchasing director was reported to be abusing his position to obtain goods fraudulently. The essay will report on how the investigation was done, the findings and conclusions made. On receiving the tip, the Lakes Inc. management contacted the writer to get to the bottom of the issue by conducting a thorough and professional investigation. The basic steps for investigating internal fraud were conducted to solve the case. The fact that the investigations started almost two months after the staff tip-off could potentially have jeopardized the case. This is because frauds should be reported, verified and investigated as soon as possible. This way tracking evidence is faster and the evidence is still fresh. Sufficient grounds to believe fraud had taken place were established by myself before getting on with the investigation. I used interviewing, document scrutiny and making personal observations to get to the root of the case, and secured control and ownership of the relevant purchase and payment documents. This was essential in ensuring they are not tampered with and that they could be availed and used as evidence. The documents helped form the basis for conducting the investigation at Lakes Inc. I reviewed the obvious information first; that false invoices had been used to obtain refunds by the purchases department amounting to $ 8 795.60, before getting into the details. Getting detailed information involved interviewing neutral third party witnesses to the case after scrutinizing the invoicing documents and authenticating them. The neutral third party witnesses interviewed were dispatch and collection personnel, the stores and inventory clerks, and the IT support department (Coenen, 2009). These were interviewed to verify no computer servers were bought as stated in the invoice and claim documents were actually delivered, entered into the inventory records, and/ or installed. The intervie w took place on the 6th August. From here, witnesses who could corroborate the evidence adduced so far were interviewed on the same day (Coenen, 2009). An evaluation of the requisition system for new equipment or office equipment was done to establish the procedures and who were involved in the process.