TheFraudGuy.com

Fostering an Ethical Tone - CCI Article

The Fraud Guy — Mon, 06 Feb 2012 13:03:24 GMT

I recently published an article on my column at Corporate Compliance Insights that highlights four ways that companies can foster a positive ethical tone within their organizations. Below is a short "teaser" from the article, which can be read in full by clicking this link.

The Ethics Resource Center released their 2011 National Business Ethics Survey (NBES). In their own words: “This year, the results have surprised us in every possible way.“

On the positive side, the NBES found that the percentage of survey respondents who witnessed misconduct in the workplace dropped to 45% from 49% (2009 NBES) and that those who reported the misconduct that they observed increased from 63% in 2009 to 65%. In short, people saw less misconduct and were more likely to report what they saw.

Much more concerning was that the NBES found an increase in the percentage of companies with “weak ethics cultures,“ an increase in the percentage of respondents who felt pressured to compromise their company’s ethical policies and standards (or even break the law), and that retaliation against employees who reported misconduct had risen. Perhaps an oversimplification, but this might be summarized as: More companies have a weak ethics culture wherein which employees are pressured to disregard the ethics policies and/or break the law and punished if they report someone doing so.

Scary? Wait, it gets “better.” Another finding was that far fewer employees believed their direct supervisors acted ethically and that confidence in senior leadership had dropped 6% from 2009, matching the historic low of 62% (2000 NBES).

Most compliance and ethics professionals would agree that the heart of an effective compliance and ethics program is the “tone at the top.” The NBES findings appear to indicate that “tone” is becoming less ethical. Absent some outliers that skewed these results, these findings are stunningly concerning. If the heart is diseased, the whole body suffers.

Get out the crash carts. Organizational Intensive Care could have a lot of patients this year!

Click HERE to see the rest of the article, which includes four ideas about how an organization can foster a positive ethical tone within their organizations.

Lessons from an Independent Corporate Monitor

The Fraud Guy — Thu, 03 Nov 2011 11:35:10 GMT

During the SCCE Conference in Las Vegas this September, I was interviewed by the i-Sight Blog regarding my work in the area of Independent Corporate Monitoring. The article was recently published and I hope that you find it informative and helpful in your professional role(s).

Link to Article: "Lessons from an Independent Corporate Monitor"

© 2011 John Hanson, CPA, CFE, CCEP

The Human Lie Detector - A Lie Itself

The Fraud Guy — Thu, 22 Sep 2011 14:34:49 GMT

I just published an article by this title with Corporate Compliance Insights. It cautions against some of the organizations and people who peddle interview techniques advertised to turn a person into a "human lie detector." Link here

© 2011 John Hanson, CPA, CFE, CCEP

Post Traumatic Settlement Disorder

The Fraud Guy — Thu, 18 Aug 2011 11:08:52 GMT

I recently had an article published on Corporate Compliance Insights entitled "Post Traumatic Settlement Disorder." Organizations are frequently held liable for the actions of their employees and will enter into settlement agreements (i.e. deferred prosecution agreements, non-prosecution agreements, consent agreements, administrative agreements, etc.) with government agencies in order to resolve that liability.

This article covers two of the key things that an organization can do to maintain order and better meet their settlement agreement obligations - from the perspective of an independent corporate monitor. Both parts are linked below:

Part 1
Part 2

© 2011 John Hanson, CPA, CFE, CCEP

FCPA Settlement Agreements, Monitors and Self-Monitoring

The Fraud Guy — Mon, 01 Aug 2011 17:01:13 GMT

There has been a slightly less frequent requirement by the DOJ for Independent Corporate Monitors (“Monitors”) in FCPA-based settlement agreements during 2011. Counts may vary a little due to timing, but there have been about seven (7) such settlement agreements during the first half of 2011, of which two (2) required Monitors and three (3) required some form of “self-reporting.” Previously, Monitors had been required, on average, in a little more than forty percent (40%) of FCPA-based settlement agreements, a fair amount more than the twenty-eight percent (28%) average for the first half of 2011.

What is behind this apparent trend and does it have anything to do with concerns that have been raised over the last few years about the costs and scope of Monitors? Does it signal a broader "policy" shift within DOJ and/or outside of just FCPA matters?

What should be considered by government agencies when contemplating whether or not to allow an organization to self-monitor their compliance with the terms of a settlement agreement?

If one looks at DOJ’s written policies on the topic and public statements by DOJ officials, such a change is clearly not “official policy” in general, nor is it just for FCPA matters. Also, while costs of a Monitor are certainly among the many factors considered by all parties, there is nothing to indicate costs are a key consideration by DOJ in determining whether or not to require a Monitor at all, much less a factor in this trend.

As a Monitor and one who tracks the use of Monitors intensely and very broadly, I am absolutely confident in saying that the use of Monitors is universally (FCPA being an exception thus far in 2011) increasing, not decreasing. Not only among more regulatory and enforcement agencies at all levels of government within the United States, but abroad. Without articulating and referencing all the support behind this assertion (just look at previous issues of “The Monitor” to see the broad use and requirement of Monitors), I think we can dispel any notion that this apparent trend in FCPA-based matters has any broader implications, both in and outside of DOJ. Accordingly, I would like to explore why this trend may be happening within DOJ FCPA-based settlement agreements.

From my reviews of the underlying settlement agreements in the older and more recent FCPA matters, both where a Monitor was and was not required, there seem to be three key things that have happened and are continuing to happen that I believe explain this trend. The cost of a Monitor is definitely not one of them and never should be.

Expertise of Counsel

First, outside counsel for the firms involved in FCPA matters have gotten really good. Not only have they gained an abundance of experience in such matters because of the sheer volume of DOJ FCPA investigations that have taken and are taking place, but they now have a plethora of settlement agreements available that tells them explicitly what the DOJ expects with regards to compliance programs and what other companies have done in those instances where a Monitor was not required, or vice-versa. Accordingly, even as these seasoned defense attorneys begin to plan an internal investigation, they are looking for compliance and control failures and providing immediate advice about remedial measures aimed specifically at addressing the issues they know DOJ will have and in a fashion similar to that which they have seen other companies do to avoid a Monitor. The cost savings of this as compared to the cost of a Monitor could be argued to not be as large as perceived, given that the “additional” services by such law firms does not come free, or inexpensively, nor does it always necessarily entail the use of very experienced compliance professionals, though that is changing too. Nonetheless, many of these attorneys are exceptionally experienced in these matters and this strategy and process has been very effective to date in helping companies avoid the imposition of a Monitor in resolving FCPA matters.

Along those same lines, the DOJ (and the SEC) have not sat quietly regarding their expectations of compliance programs and internal controls within companies subject to the FCPA. To the contrary, they have been very vocal in sharing their views about the topic, as well as about Monitors and some of the factors involved in considering whether or not to require them. With such an abundance of information (i.e. settlement agreements, public statements by DOJ/SEC officials, articles, white papers, etc), its longer “rocket science” to “reverse engineer” what needs to be done in order to minimize the likelihood of a Monitor being required in DOJ FCPA matters.

The Corporate Compliance Industry

Second, among the key considerations in resolving FCPA matters (and corporate misconduct in general), is the state and effectiveness of an organization’s “pre-existing” corporate compliance and ethics program and internal controls. Corporate compliance, as an industry, is still relatively new and has grown tremendously over the last few years. Their impact on organizations’ pre-existing compliance programs has been positive, deep and broad.

There are several large and highly reputable organizations that now cater specifically to the compliance industry, some of whom even offer certifications for compliance professionals. These organizations host large national and international conferences, as well as a myriad of local and regional seminars that cover all aspects of compliance within just about every industry. They have created and aggressively communicated standards and best practices as well, which comport with, among other things, the United States Sentencing Guidelines as it relates to corporate compliance & ethics programs. As the compliance profession has grown and made more training and information accessible about best practices in compliance and ethics programs, corporate compliance professionals within organizations with pre-existing compliance programs have become better trained and equipped to improve their organization’s compliance programs, which results in less remediation and oversight if/when a problem occurs.

In addition to those organizations focused on the industry of corporate compliance and ethics, FCPA compliance has been a major topic of coverage by industry organizations (i.e. American Bar Association, Association of Certified Fraud Examiners, American Institute of Certified Public Accountants) and the professional training companies that serve the constituents of those organizations (i.e. American Conference Institute, Practising Law Institute, etc.). It is also the topic of a huge amount of “viral” coverage, with law firm websites, newsletters, tweets, Linked-In groups and blogs that track everything going on related to FCPA matters and, in some cases, providing instant access to libraries of relevant documents and resource materials.

Want to keep up with FCPA issues/happenings? Set a “Google Alert” on “FCPA” with instant updates and watch your email inbox explode.

Proactive FCPA Services

Finally, the universe of companies with exposure to the FCPA is tremendous and the risk(s) high. For many years now, attorneys, consultants and compliance professionals have been using the DOJ’s aggressive prosecution of violators, which entails individual criminal prosecutions and monstrous organizational fines and restitution, to make companies (and their Board Members, where applicable) abundantly aware of their FCPA risks, personally and organizationally. While organizations have traditionally avoided the costs of such proactive services in general, the seemingly huge personal and organizational risk(s) in FCPA has caused many organizations to shift their cost/benefit considerations in favor of action. As a result, many companies have obtained professional compliance related services to proactively assess and improve the FCPA compliance components of their corporate compliance programs. Proactive FCPA compliance has been among the hottest professional service areas of all proactive risk-based services for several years now.

As a result, there are many more companies, particularly within the industries “targeted” by the DOJ for FCPA, with viable “pre-existing” compliance programs today, who previously had little or no compliance program at all, much less one that addressed FCPA specific risks.

Self-Monitoring is Not Monitoring

The need for a Monitor must be evaluated in light of each matter’s particular circumstances. A Monitor is not always necessary or appropriate to assuring the timely and effective compliance of an organization with their settlement agreement obligations. However, the DOJ (and any other government agency) should cautiously contemplate their reliance on self-reporting by an organization on that organization’s compliance with the terms of a settlement agreement. While the DOJ might hope that most companies, their counsel and the company’s employees would do so with the effectiveness, transparency and integrity expected of an Independent Corporate Monitor, there is no “independent” in self-reporting.

As just one example from my own experiences as a Monitor, I have had within the scope of my Monitorships the responsibility of verifying that organizations have met their settlement agreement obligations regarding reports/complaints of employee misconduct. These have included complaints raised through a Hotline, directly or indirectly with the Chief Compliance Officer, through a direct supervisor, and/or any other means. For those raised through a Hotline, for example, I routinely review the Hotline log (often done through a third-party and may include both telephonic and electronic communications) and assess how all such complaints were responded to, resolved and reported. I then report to the relevant government agency on my findings.

In my Monitorships, regardless of whether a complaint was made through a Hotline or otherwise, the organizations knew that a I was watching, reducing the risk that any complaints could be ignored, mishandled or not appropriately reported in accordance with the settlement agreement obligations and/or applicable laws and regulations. While not all complaints and/or resulting investigations required that they be reported, either to me as the Monitor or the government, the ability of the company to subjectively and solely make such a decision was impacted by my presence. This helps assure that complaints are not only appropriately and effectively addressed, but that what needed to be reported to the government was so reported. In fact, the companies that I have served as the Monitor of have tended to “over-report,” meaning they reported to the government about complaints that did not require reporting, either by law or the settlement agreement. For example, in one of my Monitorships a Hotline call was received regarding an employee’s request for their own personal tax information and had no implications or relationship to misconduct; however, it was reported by the organization to me and the government merely because it came through the organization’s Hotline.

Though I am not involved in it and have no personal knowledge about the particulars, a company presently under a Monitor has very recently and publicly come under scrutiny as a result of a complaint (they note it as a “tip” in their public filings). While it is unclear at this point whether the tip that led to that internal investigation came into the Hotline or not, it and the results of their internal investigation was reported to their Monitor and the government and has called into question whether or not they “knowingly and willfully breached material provisions” of their settlement agreement. The company further acknowledged that this was a “significant liability” for them and could lead to government and civil liabilities and possible exclusion from certain government contracting which would have a “material adverse effect” on their financial condition.

Would this have come to light at all without a Monitor present, if they were left to self-reporting? We may never know.

In addition to the utter lack of independence, an organization’s capability/ability should also be carefully and closely weighed by government agencies that contemplate permitting an organization to self-report on their compliance with a settlement agreement. Among the chief responsibilities of a Monitor is to verify not only that the company complies with their settlement agreement obligations, but that they do so timely and effectively. As it relates to effective compliance, many companies may not have the requisite resources and compliance experience to adequately make such a determination, while Monitors do, frequently having more experience in making such assessments than a company’s management, in-house counsel and/or compliance personnel.

One example of evaluating effective compliance from my own Monitorship experience involved an organization’s obligations in their settlement agreement regarding specific accounting and internal control requirements. The complexity of these requirements exceeded the ability of the accounting and compliance professionals within the organization. They intended to comply with their settlement agreement requirements in these areas and genuinely thought they had done so, but in reality they had not. As the Monitor, I brought their failure to their immediate attention and provided guidance about how they might remedy their errors, which they were able to do, improving their own systems and procedures while effectively fulfilling their settlement agreement requirements at the same time. Had this been left to self-reporting, neither the company nor the government would have known that the actions taken by the company were not effective.

Similarly, but much more frequently, I have experienced this same issue in evaluating the effectiveness of compliance training(s) required by settlement agreements. Because such trainings are a key means of communicating a company’s compliance policies and the primary means of assuring that their employees understand and can apply them in their roles, they have been and continue to be a recurring requirement in settlement agreements. There have been instances in my own Monitorships where, with the best intentions in mind, such compliance training has been conducted, in accordance with the requirements of a settlement agreement, that were wholly ineffective. My testing found that those who received the training did not adequately understand the compliance policies or how they were applicable in their roles. This lack of effectiveness was immediately raised with the organizations, allowing them to refine and improve their compliance training, as well as learn techniques to assess the effectiveness of that training within their own on-going compliance program monitoring, while effectively meeting their compliance training obligations as per their settlement agreements. Once again, without the presence of a Monitor to recognize such a deficiency, neither the organizations involved nor the government agencies to whom they would have self-reported would have ever known.

Perhaps most concerning of all as it relates to self-reporting are those instances where companies view their compliance with a settlement agreement as a “check the box” exercise, with no regard to the spirit and goals of the settlement agreement. In such instances, the government (and possibly the company itself) would not know whether or not a company is effectively complying with their settlement agreement obligations. To the contrary, they would think everything was proceeding along smoothly. At least until the next crisis arises.

Yes, Monitors come with a price. While there are many misperceptions about how high that price may be (perhaps another good topic to explore), such a price is outweighed by the many benefits for the organization, the government agency, the industry and the public-at-large, among others. Not only do I think that costs are not a factor in the recent decline in the use of Monitors in FCPA-based settlement agreements, I think they should never be a significant consideration at all in any matters where a Monitor is considered. If the costs of a Monitor are a concern to a company, perhaps the attorneys who help companies negotiate the settlement agreements with the government should push harder to have the government offset any associated fines with the costs of the Monitorship, as was recently done in the Sirchie Acquisition Company (FCPA) and XE Services (Export Controls) settlement agreements.

The price of non-compliance, intentional or not, is too high to pay.

John on CNBC Discussing Investigative Techniques in the Rajaratnam Matter

The Fraud Guy — Wed, 09 Mar 2011 13:04:00 GMT

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© 2011 John Hanson, CPA, CFE, CCEP

UK Bribery Act Presentation

The Fraud Guy — Thu, 24 Feb 2011 12:45:00 GMT

I am pleased to be speaking with Tom Fox on March 17th in DC on the topic of compliance with the UK Bribery Act. The UK Bribery Act will become effective on April 1st. It differs substantially from the FCPA in several key areas and has been dubbed by one former DOJ official, Mark Mendelsohn as “The FCPA on steroids.”

Is your company ready for this new law? Join Tom and I for a discussion about compliance aspects and issues related to this new law. Unlike other presentations on this topic, this one brings together and presents the unique viewpoints of a renowned bribery and corruption compliance professional and a leading expert in the field of Corporate Monitoring.

For more information about this event and/or to register (it's free!), please click here.

Corporate Monitor Not an In-House Investigator

The Fraud Guy — Thu, 16 Dec 2010 14:47:00 GMT

There is a misperception that Independent Corporate Monitors are akin to some sort of in-house Inspector General or government appointed special investigator. That we will discover and ferret out all instances of wrongdoing, fraud, waste and abuse within the organizations we are appointed and entrusted to monitor. That misperception has been particularly and publicly demonstrated in the recent months of debate regarding the appointment of a former Corporate Monitor to a post within the DOJ, where that person has been accused of not finding a significant fraud within the entity he was appointed to monitor.

I have also personally had to deal with this misperception in my role as a Corporate Monitor. In one, which began in May of 2010, the organization was enormously concerned from the outset with this. As a result, when I began requesting documents, numerous objections were offered based upon their concerns about my conducting investigative activities outside of the scope of their settlement agreement (a common occurrence according to my Corporate Monitor peers). Of course this was not the case (I am a major proponent of remaining in scope and opponent of Monitors acting as investigators - despite my FBI Agent background) and I was able to overcome their concerns, though the initial back-and-forth caused delays and additional costs. It took a couple of months before the organization began to trust me and recognize my commitment to remaining within scope and not conducting any investigation(s). Having now gained that trust and confidence from the organization, I enjoy a very good working relationship with them, enabling me to work more efficiently and effectively in fulfilling my obligations as their Corporate Monitor. For my part, I learned from that experience and have now designed a strategy for entering into a monitorship in such a manner as to mitigate such concerns, saving future organizations that I may be involved in monitoring additional costs and heartache.

So let's be clear. A Corporate Monitor, absent specific requirements in the underlying settlement agreement regarding their scope/role, is NOT an investigator. We are not expected, nor would we attempt, to conduct investigations regarding the criminal or regulatory allegations giving rise to the settlement agreement, nor would we actively attempt to discover occurring or future frauds.

Even if this expectation and scope existed, that is not to say that a large fraud could be occurring that a Corporate Monitor would not discover, even if perceived to be "right under our nose." Fraud is, by definition and nature, something that is hidden - a "lie." For example, a Corporate Monitor may find it within his or her scope to evaluate an organization's controls over financial reporting (or otherwise) and make recommendations to strengthen those controls - and he or she may do so quite well. But what must be recognized is that fraud is generally conducted in ways intended to disguise or hide it in order to circumvent controls. In reality, internal controls are designed and implemented in such a manner as to balance costs with effectiveness and risk(s). There is no perfect practical internal control structure that can assure against fraud or even assure that it will be detected in a reasonable period of time if it occurs. At least not one that is realistically financially feasible.

Absent some indicia of wrongdoing that would lead even a professional fraud investigator or others to look into a particular area, it is an unrealistic expectation that anyone, regardless of their experience, would find every fraud, large or small, that might be occurring within or affecting an organization. To have even a reasonable chance of success for finding such frauds would require such a broad scope as to be financially unconscionable to any organization, though professional fraud investigators may have a greater likelihood of recognizing red flags or other indicia of wrongdoing than others.

As a Corporate Monitor, our scope is completely guided by the terms of the settlement agreement between the parties to that agreement and an experienced Corporate Monitor will go to great lengths to understand, define and remain within that scope. Generally speaking, that scope is limited to verifying the compliance by the organization with the terms of their agreement. While that scope may entail a Corporate Monitor conducting certain reviews within specific areas, departments, units, etc. of an organization, it most likely would not require that those verification procedures would be of such extent as to discover any, much less all, potential wrongdoing within those areas, regardless of the size of that area - though a particularly large, decentralized or complex area would obviously make the discovery of such wrongdoing even more remote.

I truly hope that this misperception diminishes over time, particularly as best practices and standards (currently being developed my the American Bar Association's Ad-Hoc Task Force on Corporate Monitors) are created and become available and publicized. For now, knowing that we as Corporate Monitors do not have it within our scope or within the practical bounds of reality the ability to detect all possible wrongdoing within an organization, yet are perceived quite the opposite, it remains our worst fear that wrongdoing will occur "under our watch" that might lead to unfair and unjust criticisms about both the role of a Corporate Monitor and our individual reputations in serving as such.

© 2011 John Hanson, CPA, CFE, CCEP

The Monitor - Dec 2010 Edition

The Fraud Guy — Fri, 10 Dec 2010 11:53:00 GMT

It is with great pleasure that I released the third edition of The Monitor this week. Thanks to so many of you who have shared how useful the information in this newsletter has been to you. My goal with The Monitor has been to provide current and relevant information related to the area of independent corporate monitoring and provide the most comprehensive collection of informational resources available on the topic in one place. I hope that you continue to use and benefit from this newsletter and the provided resources as that collection grows.

The last three months have seen a surge of activity as it relates to criminal and regulatory enforcement involving organizations that have been resolved through some form of a settlement agreement requiring a Corporate Monitor. From a "trend" perspective, as occurred with the Sirchie Acquisitions Agreement (see our September 2010 newsletter ), more Agreements are permitting organizations to off-set their fines with various expenses associated with remedial measures taken pursuant to or because of the Agreements, including the costs of the monitorships. Another hot area of interest has developed as it relates to protecting the reports of Corporate Monitors, which is elaborated on in this newsletter and could be of significant use to attorneys and the organizations they counsel.

At Artifice, we have a vast collection of materials related to this field and are always looking for more. If you have any information concerning Corporate Monitors or relevant to this evolving practice area that you would like to share publicly, please email it to: Information

I hope that the information in our newsletter may continue to be helpful to you and/or your clients and am available to help you should you require more information or assistance. Whether you are faced as an organization with finding or working with a Corporate Monitor, are counsel to such an organization or are a candidate yourself for a Monitorship, I am happy to share thoughts and "best practices" that might be helpful to you. Over the last three months alone, I have been contacted and provided such thoughts to three different Corporate Monitors, all without any commercial interest to me, rather with the goal of helping them serve more effectively and efficiently in their roles.

The following link will take you to the web-version of the December edition of The Monitor.

London Calling

The Fraud Guy — Mon, 15 Nov 2010 13:50:00 GMT

I will present “How To Work Effectively With A Corporate Monitor” at the Global Corruption & Bribery Compliance Conference for Life Sciences on November 29, 2010 in London. This is a shortened version of the presentation I did for the Society of Corporate Compliance & Ethics in September 2010, which is available in pdf form in an earlier posting.

When the IQPC (Conference Organizer) called me to speak about Compliance Monitors earlier this year, I found it very interesting that this topic was increasing in interest by European compliance professionals and attorneys. While the US authorities have been using Corporate Monitors for years and are continuing (and increasing) such use, most other countries have not followed that particular settlement trend. That said, we have seen several settlements in 2010 that required a Corporate Monitor outside of the US (i.e. BAE, Alcatel-Lucent, Technip), though all had a heavy US interest/involvement.

I hope and suspect that as the non-US law enforcement and regulatory agencies see how these Corporate Monitors bear out and learn more about how they both benefit the entities and government agencies using them, we may see more use of international Monitors.

As it relates to my presentation in London, among the topics I will discuss are:

Definition of a “Corporate Monitor”
The Role & Scope of Corporate Monitors
Qualifications - Finding & Selecting an Effective Monitor
How to Work Effectively With a Monitor

Click here for a link to the IQPC's website for information about the conference.

I'll make a copy of the presentation available here shortly after it is presented.

© 2011 John Hanson, CPA, CFE, CCEP

Certified Compliance and Ethics Professional

The Fraud Guy — Tue, 26 Oct 2010 13:50:00 GMT

Nearly every settlement agreement entered into by the government and an entity has required that the entity remediate their corporate compliance and ethics programs. Not surprising given their roots in the United States Sentencing Guidelines.

About half of those agreements require an independent corporate monitor to verify and oversee the entity's compliance with such remediation and in my previous and current corporate monitorship experience, the corporate compliance and ethics programs of the entities I monitored was the primary focus.

Corporate compliance and ethics is a relatively new and specialized field. While many professional service providers (CPAs, lawyers, etc.) who may at some point serve as a corporate monitor may have some tangential experience with it through their service to clients, not that many have a comprehensive and detailed understanding of it. With that area being such a primary focus, it seems that such experience should be a necessary qualification for corporate monitors.

As my business continues to specialize in the area of corporate monitoring, I felt it of utmost importance to the future companies and government agencies that I might serve in the role of a corporate monitor that my experience and knowledge in this area was formally recognized. This is not only important from the sense of establishing greater capability and credibility, but in being able to better advise and serve the monitored entities more efficiently and effectively.

While there are several entities that serve the field of corporate compliance and ethics, I found that the Society of Corporate Compliance & Ethics seemed to be the thought leader. They not only provide practical world-class training and resources to compliance professionals, but offer a serious certification as a Certified Compliance and Ethics Professional (CCEP), which has strict requirements to qualify for and requires that candidates take a proctored exam that combines the right mix of academic and practical compliance knowledge and experience consistent with what one would expect of an expert in the field. I fully expect that the CCEP designation will become the primary recognized designation in this field, much like the CFE has become in the world of fraud investigations, and I am proud to now have that designation as part of my credentials.

For more information about the SCCE and CCEP designation, please visit the SCCE Website.

© 2011 John Hanson, CPA, CFE, CCEP

9th Annual Compliance & Ethics Institute

The Fraud Guy — Thu, 09 Sep 2010 11:46:00 GMT

I will present “Understanding and Working Effectively with Independent Corporate Monitors” at the Society of Corporate Compliance and Ethic’s 9th Annual Compliance and Ethics Institute on September13, 2010 in Chicago, IL. My distinguished fellow panelist for the presentationare Jacob Frenkel (Shulman Rogers) and Doug Lankler (Pfizer).

This presentation will address:

What is a “Monitor”?
Current Trends in Monitor Usage
Finding & Selecting a Monitor
Scope, Role, Transparency, Reporting and Costs of Monitors
Benefits to the Monitored Entity and Government
Working Effectively with a Monitor

Link to more detailed information about this conference and this presentation.

Click here for a pdf copy of the presentation.

© 2011 John Hanson, CPA, CFE, CCEP

"The Monitor" Newsletter

The Fraud Guy — Thu, 09 Sep 2010 11:33:00 GMT

I began publishing a newsletter entitled "The Monitor" on the topic of Independent Corporate Monitors in June 2010. A second newsletter was released in Sept 2010. This newsletter presents current information relevant to those involved in pre-trial diversion, settlement, administrative and plea agreements that may require the use of an independent corporate monitor. It also contains what may well be the most comprehensive collection of links to information relevant to this topic available. A frequent concern raised by entities (and the lawyers who represent them) faced with the prospect of a Monitor is their lack of knowing what to expect and lack of resource materials and information available on the topic.

Much thanks to all the wonderful white collar defense attorneys who have shared how useful and informative this newsletter is and have begun using it as a resource to find information relevant to their clients and services. A great deal of work has gone into making "The Monitor" a resource tool and is it wonderful to hear and see it being used as such.

The next release will be in December, but here are links to the web-version of the June and September issues:

The Monitor - June 2010

The Monitor - September 2010

© 2011 John Hanson, CPA, CFE, CCEP

"Advanced Forensic Accounting" - Mailing List Invitation

The Fraud Guy — Thu, 29 Apr 2010 19:52:00 GMT

I am currently planning to offer my wholly unique and practical “Advanced Forensic Accounting” course in various locations. The course is worth 8 hours of CPE for CPAs, which should be accepted also for CFEs, CIAs and others who accept CPA CPE. If you have an interest in getting on our mailing list so that you can become aware of offerings near you, please email: Training@ArtificeForensics.com

Using just three months of bank account information, will you be able to unravel "Sammy's" plan? Lives may depend on it....

This unique and interactive course is designed primarily to influence the way that one approaches and thinks when analyzing financial records in the course of a fraud or financial investigation. It is an improved and appropriately modified course (i.e. nothing “classified”) that I developed and used to train new FBI Agents at the FBI Academy, many of whom had no prior investigative, audit or financial investigations experience.

The course begins with an introduction to critical thinking in an investigative context, followed by a discussion about how financial records can be used to profile a person and how that profile can be critical and useful in an investigation. Specific and technical steps are then discussed about collecting, organizing and analyzing financial information and how to document that analysis.

The vast majority of learning is through participation in and discussion about a detailed practical exercise where you are challenged with a forensic accounting role within a real-life scenario. In the scenario, you work in teams and are provided with three months of bank statements, including the supporting documentation for each transaction, and tasked to conduct analysis and live internet research using the techniques you have learned. The places and people in the scenario are mostly real or otherwise back-stopped on the internet to challenge and enthrall new and experienced financial investigators alike.

The practical based nature of this course, team-work (as small teams and as a larger class) and double-reinforcement of the learning through repeated application works, effectively impacting the way that you think and making you a better financial/fraud investigator.

The course not only works - it's the most fun eight hours of CPE or similar training you'll ever have outside of Hogan's Alley!

Preventing, Detecting & Responding to Fraud - Presentation Download

The Fraud Guy — Sat, 17 Apr 2010 13:57:00 GMT

I've had many requests for a copy of the presentation that I did last Thursday on this topic, so I've posted a link for people to download it below.

The ppt in and of itself is not very telling or substantive. I've never been a "slide reader," so though the presentation took a full two hours, there are only about 10 substantive slides. In other words, the ppt has little meaning or value without the accompanying delivery. Also, I use a lot of graphics and ppt animations, so while it is small in number of slides, it is a very large file (over 42MBs).

The presentation comes from the perspective of one who has been involved in these areas for nearly 20 years and whose experience includes internal corporate (was Director of Internal Audit), law enforcement (10 years as a FBI Agent), consulting (forensic accounting/fraud examinations) and having served as an independent corporate monitor.

Having the experience of having evaluated corporate compliance policies and controls for the purposes of determining corporate criminal responsibility of an entity for the actions of its employees, agents, etc., combined with the experience of serving as an independent corporate monitor charged with, among other things, overseeing and evaluating an entity's corporate compliance program and internal controls, brings a very unique perspective that touches on each area discussed - prevention, detection & response.

Here's the presentation - Preventing, Detecting & Responding to Fraud

© 2011 John Hanson, CPA, CFE, CCEP

Preventing, Detecting and Responding to Fraud

The Fraud Guy — Wed, 14 Apr 2010 00:08:00 GMT

The Virginia Government Finance Officers’ Association, PBGH LLP and Artifice Forensic Financial Services are hosting a lunch, followed by a presentation by me about preventing, detecting and responding to fraud. I will share my insights and experience on issues that may arise as a result of or related to fraud and how you can better prevent, detect and respond to fraud. The lunch and presentation are free (it is requested that you make a donation of a nonperishable food item for the local food bank) and will qualify for CPE.

For location, time and registration information, please visit the Artifice Events Page

© 2011 John Hanson, CPA, CFE, CCEP

3rd Eastern Conference on Defense Export Controls

The Fraud Guy — Tue, 16 Mar 2010 18:57:00 GMT

I am excited to announce that I will be speaking on the topic of current activities and trends in export control enforcement at the 3rd Eastern Conference on Defense Export Controls, to be held in the DC area this June. The brochure and agenda just came out and it looks to be a fabulous conference where speakers and attendees alike will catch up on all the latest happenings, risks, trends, strategies and solutions in this risky business area.

If you plan to attend, please let me know. In addition to speaking at the event, I plan to attend it and would love to meet in person.

Click HERE for a link to the event announcement on Artifice's website, which includes links for more information, registration and the conference brochure/agenda.

© 2011 John Hanson, CPA, CFE, CCEP

ABA WCC Institute

The Fraud Guy — Sat, 20 Feb 2010 12:30:00 GMT

I will be one of the sponsors at next week's 24th Annual White Collar Crime Institute next week in Miami Beach. This event is put on by the American Bar Association and has a sensational agenda of topics and speakers talking about the latest and greatest happenings in the industry. It is expected there will be more than 1,000 professionals attending and the ABA schedules the event in such a way as to allow ample time to network.

In addition to sponsoring the Institute, I am one of the sponsors for the Young Lawyer's Reception on Weds night. This is the biggest reception of the event and I hope to see you there. If you can't make it, don't worry... there are MANY other receptions, parties and events.

For more detailed information, follow this link to the Artifice website: ABA WCC Institute

Artifice Forensic Financial Services, LLC

The Fraud Guy — Mon, 18 Jan 2010 16:10:00 GMT

Artifice Forensic is a boutique financial consulting firm focused on forensic accounting, fraud investigations and independent corporate monitoring. With more than 70 degreed accountants, most of whom are CPAs, and affiliations with other CPA and Forensic Accounting firms nationally and internationally, Artifice Forensic allows me to respond to clients' needs with the same superior quality service, responsiveness, coverage and fraud expertise that I was able to offer while with a large, publicly traded international financial consulting firm, but at a fraction of the costs.

Learn more at the Artifice Forensic website.

If I may be of any service to you or your clients, I can be best contacted at:
Email: JHanson@ArtificeForensic.com
Phone: 202 590 7702

Best wishes for an outstanding 2010.

© 2011 John Hanson, CPA, CFE, CCEP

DOJ Promulgates Guidance on Criminal Discovery

The Fraud Guy — Wed, 06 Jan 2010 11:11:00 GMT

On January 5, 2010 Deputy AG David Ogden announced and published memorandums regarding this hot issue, which is sure to have an impact on how lawyers and investigators on both sides conduct and defend criminal investigative matters. These are a "must read" for everyone in the field.

The two memos published included:

1) Issuance of Guidance and Summary of Actions Taken in Response to the Report of the Department of Justice Criminal Discovery and Case Management Working Group

2) Guidance for Prosecutors Regarding Criminal Discovery

© 2011 John Hanson, CPA, CFE, CCEP