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The Kickback
Mine: Vendor
Fraud with a
Kickback
Twist
J. Aaron Christopher, CFE CPA – www.christophercpa.com
J. Aaron Christopher, CFE CPA – www.christophercpa.com
Objectives
Tipoff
Interview
Investigation
Evidence
Prosecution
Lessons Learned
J. Aaron Christopher, CFE CPA – www.christophercpa.com
The Tipoff
Anonymous Call to Corporate HQ
“Your
Vendor is
overbilling
you!”
J. Aaron Christopher, CFE CPA – www.christophercpa.com
The Internal Audit Investigation
Richardson Construction
Payroll Records
Paid by Crimson Mine
J. Aaron Christopher, CFE CPA – www.christophercpa.com
Subject Interview
Setting
Step 1 – Get him talking
Step 2 – Make accusation
Step 3 – Get details
Step 4 – Get continued cooperation
Step 5 – Anything else????
Keith
Richardson – Owner of
Richardson
Construction
J. Aaron Christopher, CFE CPA – www.christophercpa.com
The Criminal Investigation
Interview Subject(s)
Review Internal Audit Findings
Bank Statements
Interview Witnesses
J. Aaron Christopher, CFE CPA – www.christophercpa.com
Other Evidence
Interview of Rich Bowden
Richardson Bank Statements Regular Cash Withdraws
Payment to a strange Credit Union…
Net Worth Analysis of Subjects
J. Aaron Christopher, CFE CPA – www.christophercpa.com
Prosecution
Over $500,000 in Restitution Ordered, Jointly
3 defendants received jail time 2 – 12 months in minimum security federal prison camp
1 – 36 months in federal penitentiary
Richardson Closed his Business 30 Employees lost their jobs
Sold business building to pay restitution in full
J. Aaron Christopher, CFE CPA – www.christophercpa.com
Lessons Learned
Blanket PO Oversight Dual Approvals
Behavioral Indicators Living beyond means
Close relationship with vendor
Fraud Tipline
Random Internal Audits
at Small Subsidiaries
Early Interview
Investigative Myopia
“Association of Certified Fraud Examiners,”
“Certified Fraud Examiner,” “CFE,” “ACFE,” and
the ACFE Logo are trademarks owned by the
Association of Certified Fraud Examiners, Inc.
The contents of this paper may not be
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