Digging Deep with Primary Sources
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During their breakout session at the 36th Annual ACFE Global Fraud Conference, Jennifer Mackovjak, CFE, and Craig Kelbus reviewed cases they worked where critical information was found using primary source materials. They emphasized the importance of digging deep to search beyond public databases to get necessary information for solving fraud investigations.
Mackovjak and Kelbus do investigative work for an investigations firm in Chicago. They explained that although public databases can offer fraud investigators important information, many of their cases were solved by searching through primary source documents that revealed crucial information not available in commercial databases.
The types of records fraud examiners can search and that Mackovjak and Kelbus used in their cases include:
Uniform Commercial Code (UCC) filings
Real property and related records
Civil, criminal and bankruptcy court records, with their predicate dockets
Police reports
Traffic citations
These primary sources can reveal mental health diagnoses, histories of violent or aggressive behavior, bank loans, spending habits and other information on individuals that are necessary for investigations. Mackovjak and Kelbus also said they found notable assets they wouldn’t have otherwise found in UCC filings.
They gave an example of a noteworthy personal property case involving a former CEO of an energy company. The public database search revealed general proceeds but did not report any collateral. By searching the underlying documents, including UCC filings, Mackovjak and Kelbus discovered boats the CEO owned and other pledged assets, including 82 pages itemizing his extensive wine collection.
In another example, Mackovjak and Kelbus talked about a due diligence investigation they conducted on an individual who had filed bankruptcy. The bankruptcy filing revealed gambling debts and other important information on the individual.
Civil litigation records can also provide essential information. Mackovjak and Kelbus described a case where they conducted due diligence into an executive and found two divorces. By searching through the divorce filings, they discovered important employment information about the subject and that the subject had a history of physical violence and other disruptive behaviors.
In a prostitution allegation case, Mackovjak and Kelbus were asked to investigate an individual who was hired to run a company’s finances. The company suspected the subject of embellishing on his resume, but Mackovjak and Kelbus identified a criminal charge claiming the subject had lied about violating the terms of his child visitation schedule. Searching through court records and files revealed the subject had arranged sexual encounters with a prostitute and paid for the service with money he stole from his employer.
Mackovjak and Kelbus shared a wealth of experience and cases with conference attendees and demonstrated that finding new avenues of inquiry and intelligence from primary sources will greatly improve fraud investigations.
