How do we give fraud and money laundering investigators the confidence to confront suspects, customers, and others who are often aggressive and deceptive?

Both money launderers and fraudsters seek to deceive others and ordinarily operate with confidence in order to convince their victims and others to believe in them and fall for their deceit. Investigators within firms frequently find themselves in dialogue and confrontation with these people. In the event the investigators lack confidence, the fraudsters are more likely to prevail by exploiting this weakness. Thus, how do we help investigators to develop their confidence? I believe this is an area where a former law enforcement officer will commonly have an advantage, because he/she has previously been accustomed to dealing with confident and aggressive con men.

Knowledge equals power

This being so, does it follow the lack of knowledge presents a weakness? And, what knowledge is relevant here? Knowledge of the applicable laws is vital, whereas knowledge of how money launderers and fraudsters think and operate is helpful. Which leads on to the next question: Where do young money laundering and fraud investigators obtain knowledge about how fraudsters and money launderers think?

I was an experienced police detective, but I did not learn all I know through practice and operational work alone. I attended multiple courses, including a three-week, residential company fraud course where the instructors were seasoned fraud investigators. Nowadays, fraud appears to be less and less of a priority for law enforcement agencies, despite the fact fraud is on the rise during this pandemic.

Some authorities are suggesting the U.K. government may have lost as much as £26 billion (U.S. $35 billion) to fraudsters abusing COVID-19 business continuity loans. I have looked at some of these frauds and determined they were easy to identify and prevent, but they were not prevented. Simultaneously, AML and fraud controls failed. Armed robbers of yesteryear never stole so much money from banks or governments, so how and why are we now losing so much money to organized fraud gangs?

The answer is very simple: Crime has changed. Indeed, it constantly changes, and we do not keep pace with the fraudsters. Armed guards stand within bank premises in America, but there are no armed guards online. Criminals have learned there is more money to be made with fingers on a computer keyboard than with a finger upon the trigger of a gun. In addition, on the rare occasion a criminal does point a gun and demand money, his/her actions are clear to see—there is no ambiguity, and consequently an intervening party, such as the armed guard or a police officer, can confidently engage the suspect.

Tips for investigating online fraud

Fraud is different because the fraudster seeks to sew doubt, and in so doing he/she challenges the confidence of the investigator. Thus, please allow me this opportunity to share some investigative tips:

  • Fraudsters like to deal with people who say they don’t know what is being spoken about; those who seek explanations; those who seek more information.
  • Do not be intimidated by them; they may seek to make you feel stupid because you do not know something.
  • Treat the encounter as a learning experience, retain an open mind, do not ignore the gaps, and do not allow the fraudster to fill them with nonsense.
  • Fraudsters do not like to be asked to provide reference points, which an investigator can use to research or corroborate the fraudster’s story. Thus, in the event they previously worked for Bank X or Firm B, ask them who they worked with; the address of their office/branch; their manager’s name; their old work e-mail address. Importantly, ask who you can verify this with?
  • Challenge generic email addresses. In 2020, businesses people do not run their operations and customer relations through Gmail or Hotmail.
  • Always seek a Website address; businesses in 2020 do not operate without one.
  • Ask for a copy of their résumé. This should be full of reference points; therefore, they are likely to refuse to provide it.
  • Challenge bad spelling and bad grammar; ask yourself, would the CEO of your bank/firm want his/her staff sending out e-mails or letters with poor spelling and grammar?
  • Do not be intimidated by aggression, as this is often a sign that your instincts are right. Trust your instincts, do not suppress them, and do not allow others to belittle them.
  • For supervisors, support your staff and tell them they are not to tolerate abusive or aggressive behavior from anyone, including customers.
  • During these restrictive COVID-19 times, identify ways in which you provide mentoring to young investigators who are currently missing chats with senior colleagues, not overhearing interesting conversations and, consequently, whose on-the-job learning is suffering.
  • In the event a fraudster threatens to take his/her business somewhere else, let them go, because no single customer is bigger than your bank/firm, and when investigating suspicions of money laundering or fraud, you are your firm.

Legitimate customers can always be persuaded to be appreciative of your fraud/money laundering prevention endeavors because next week you may use the same approach to stop someone stealing from their account.

If you act with confidence, you will immediately present an obstacle to the fraudsters, and many of them will walk away to seek another “mark” elsewhere. Confidence is key to your success as an investigator. In contrast, your weakness will be exploited by the fraudster/money launderer. Don’t be put off, do not give the benefit of the doubt, and adhere to processes that have proven track records of success.

Do not let the fraudster’s problems become yours. In the event he/she cannot or will not provide the data you seek, the problem is not yours. To reconcile this, put yourself in the shoes of the legitimate customer being asked to provide data and ask yourself, “Is this a reasonable request?” If the answer is yes, the fraudster should act reasonably and provide the data.

Take control and stay in charge. Fraudsters like to talk rather than listen, because they are constantly selling their version of the truth. They seek to dominate conversations and intimidate you; don’t let them bully you, because you and your bank/firm are bigger and stronger than the fraudster.