Fraud is rampant. Everywhere.
A freshly certified fraud examiner (CFE) in Yarmouth has no doubts about the existence of deception.
Gwenda Wheelans, a partner with Wheelans White Chartered Accountants, is now a certified fraud examiner. There are approximately 45 of them in the province.
CARLA ALLEN PHOTO
“No question. The risk of fraud is common to all entities and they say fraud losses are estimated at five per cent of revenue,” said Gwenda Wheelans.
“Fraud needs to be proactively addressed,” she added.
CFEs have the ability to: examine data and records to detect and trace fraudulent transactions; interview suspects to obtain information and confessions; write investigation reports; advise clients as to their findings; testify at trial; understand the law as it relates to fraud and fraud investigations; and identify the underlying factors that motivate individuals to commit fraud.
CFEs on six continents have investigated more than one million suspected cases of civil and criminal fraud. There are approximately 45 CFEs in Nova Scotia.
Mortgage fraud in Yarmouth and attempting to understand the impact of mortgage fraud on world markets prompted Wheelans to learn more about the Association of Certified Fraud Examiners (ACFE).
This association is the world’s largest anti-fraud organization and leading provider of anti-fraud training and education.
Joseph T. Wells, founder and chairman of the ACFE, saw a need to bring professions together to fight fraud. Those professions include forensic accountants, law enforcement officials, and lawyers.
Wheelans says a certified fraud examiner’s role is to help the prosecutor make his case by having all proof ready, in a format that is admissible in court, remembering that a prosecutor has limited resources and shifting priorities.
A good fraud investigation requires the skill set of an accountant, an investigator, a criminologist and a lawyer.
“All these skill sets need to be combined,” she said.
Wheelan’s strength is her public accountant skill set. She is a partner in Wheelans White Chartered Accountants and has been involved with designing, implementing and testing accounting systems.
“The best way to fight fraud is to prevent it from happening in the first place,” she said.
Crime has evolved from strolling into a bank and holding up a teller with a gun.
“It is far easier to steal money from a bank by committing fraud than using a gun and mask. It is less risky, harder to catch and lighter sentences if caught,” said Wheelans.
In June she attended the 24th annual ACFE global fraud conference in Las Vegas with 2,600 others from 65 countries. Organizers arrange for a fraudster to speak to the delegates.
“We like to have them talk to us so we can try and get into their mindset and understand them,” said Wheelans.
This year’s fraudster was Andy Fastow, the American businessman who served as the chief financial officer of Enron Corporation. He was one of the key figures behind the complex web of limited partnerships that Enron controlled and used to conceal their massive losses.
Wheelans says she wants to raise public awareness by speaking to the community, especially non-profit groups where directors have a responsibility to have a fraud awareness program in place.
Hotlines – numbers you can call to report wrongdoing, without worrying that you’re going to lose your job - are said to be one of the best tools against fraud.
“It’s good to have policies and procedures put into place so that people know the rules, (saying) if you do this, that’s against our fraud policy and you’ll be prosecuted,” she said.
A key red flag to fraud detection is when you see people living above their means.