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19th Fraud Conference Friday, June 14, 2019

raw.rutgers.edu/19fraud.html

Welcome to the 19th Fraud Seminar which is being conducted by Rutgers Business School, Newark, New Jersey, in conjunction with the Association of Certified Fraud Examiners – New Jersey Chapter#9 (“ACFENJ”). Below are directions for attending this event. You will notice that our new online method of registration and payment are being handled directly by ACFENJ. Please bring your event registration ticket so that we can check you in promptly. Thank you and we will see you there. This event offers a unique forum to discuss emerging issues in fraudulent activity with experts and an outstanding opportunity to earn reasonable CPE credits in today’s economic times. The event will be held on June 14, 2019 at the Rutgers Business School located at One Washington Park, Newark, NJ, Room 220, New Jersey, 07102, from 8:00 am to 4:30 pm. Parking is available at numerous lots at the individual’s expense. Conference attendees will receive an estimated six (6) CPE credits in Auditing and two (2) credits in Behavioral Ethics. Attendees must sign in and sign out. Late arrivals and early departures may result in a reduced credit award. NASBA Sponsor Identification #116231

Registration: Our new online registration form can be found on the ACFE NJ website (www.acfenj.org) under events. The link is: https://acfenj.org/event/19th-fraud-seminar-rutgers-business-acfe-nj-friday-june-14th-2019/. The cost for the event is as follows: $150 for ACFE /ISACA/AGA members with a minimum of 48 hours advanced reservation and payment. $175 for non-ACFE/ISACA/AGA members with a minimum of 48 hours advanced reservation and payment. $175 for ACFE/ISACA/AGA members with no prior reservation. $200 for non-ACFE/ISACA/AGA members with no prior reservation.

PAYMENT METHODS: Credit Card

PayPal Account

Check made payable & mailed to:” ACFE NJ Chapter#9” 1925 Mountain Avenue, Scotch Plains, NJ 07076**

**All CHECKS MUST BE RECEIVED NO LATER THAN June 9, 2019 to qualify for advanced registration & payment**

Time and Attendance: Attendees are required to sign in and sign out. Credits are awarded based on actual time in attendance. Refund policy: 100% refund, if cancelled at least 48 hours prior to the event with an email to membership.acfenj9@gmail.com. Complaint Resolution: Complaints will be resolved by the Rutgers Accounting Research Center (973)-353-5172

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19th Fraud Conference Friday, June 14, 2019

raw.rutgers.edu/19fraud.html

continued Intended Audience: CPAs, Fraud Examiners, and professionals with an interest in ethics, fraud and computer systems Program Description: Professionally-qualified speakers will present ethics and various fraud topics of current interest. Learning Objectives: To provide updated information in the following areas:

What is FINRA?

Ethics – The Business Case for Corporate Social Responsibility (this meets the ACFE requirement for annual ethics training)

Elder Fraud – Financial Abuse and Trends

Artificial Intelligence

Delivery Method: Group live Program Level: Update Prerequisites: None Advance Preparation: None

Directions to Rutgers Business School can be found at: http://www.business.rutgers.edu/about-rbs/visit/maps-directions. Parking is the responsibility of the attendee. There are several parking lots within a block of this location. Rutgers Business School is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through this website: www.NASBAregistry.org.

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Scheduled Speakers and Topics

Joseph J. Sheirer serves as Vice President & Director of FINRA’s North Region. Mr. Sheirer has been with FINRA (and its

predecessors) for 20 years serving in various capacities. Mr. Sheirer currently oversees teams responsible for the Examination, Risk

Monitoring, and Cause Investigation Programs for member firms monitored by FINRA’s New Jersey, Boston, and Philadelphia

offices. Mr. Sheirer is a graduate of Brooklyn Law School and Drew University and is a member of the Bars of the States of New York

and New Jersey.

Lisa Colone serves as Chief Counsel in FINRA’s Enforcement Department, overseeing the work of the Enforcement Staff in

FINRA’s North Region. She joined FINRA in 2016 and served as Senior Regional Counsel in FINRA’s North Region until her

promotion to Chief Counsel in May 2018. Prior to joining FINRA, Ms. Colone served as an Assistant U.S. Attorney in the U.S.

Attorney’s Office for the District of New Jersey for nearly nine years. Ms. Colone is a graduate of the University of Virginia School

of Law and the University of Virginia and is member of the Bar of the State of New York (with a limited in-house license to practice

in the State of New Jersey).

Gina Rettagliata is Associate District Director in the New Jersey District Office, responsible for planning and executing the office’s

Firm Examination Program. Ms. Rettagliata has a Bachelor of Arts degree in Political Science from the University of South Florida.

She joined FINRA in 2003 and brings over 15 years of industry experience to her role, most recently as Vice President and AML

Compliance Officer of a major online trading firm.

Glenn Albaum is Surveillance Director in the New Jersey District Office, with approximately 235 firms assigned to him and a team

of six regulatory coordinators. Firm monitoring consists of reviews of firms’ financial filings, private placement filings, changes in

firms’ business activities, onboarding of new member firms, as well as being a resource for firms when contacting FINRA. Mr.

Albaum has a Bachelor of Arts degree in Business Administration from Rutgers College and brings 25 years of industry experience to

his role.

FINRA - What We Do and Noteworthy Cases

What is FINRA

o Mission & Jurisdiction

o Select Departments and Roles

Member Supervision

Examinations

Risk Monitoring

Investigations

Enforcement

OFDMI

Market Regulation

RAD & MAP

Investor Education

Senior Helpline

Interactions with Other Agencies

o State and Federal Regulators

o Criminal Authorities

o Other Agencies

Noteworthy Cases

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Melaine B. Campbell, Esq. Melaine B. Campbell, Esq. – The Business Case for Corporate Social Responsibility (CSR)

Melaine Campbell is an attorney with expertise in the corporate and financial services arenas on AML/KYC, ABAC and Sanctions

compliance programs and investigations. She is experienced working with American, European, LATAM and Asian markets. In her

consulting practice she provides strategic professional services for financial services entities, law firms, corporations and businesses

on global issues. She served as a Managing Director for the Dun and Bradstreet Global Compliance Solutions Group advising global

corporations and financial services businesses on best-practices for ABAC, AML/KYC and Sanctions regulatory compliance program

design, risk assessment methodologies and systems as well as data program management. Her prior experience includes service as

the Corruption and Government Integrity Bureau Chief and Organized Crime and Racketeering Deputy Bureau Chief for the New

Jersey Division of Criminal Justice.

The Business Case for Corporate Social Responsibility (CSR)

Globally we are facing social, political, environmental, economic and political crises. Today stakeholders, including shareholders, customers, civil society and employees, expect companies to respond by operating in an ethical, socially responsible way. Failure to prioritize CSR can impact brand, employee loyalty and investor interest. What CSR strategies and policies promote the company’s ethical growth while driving company profit?

The presentation will offer insight into the social, political, environmental, economic and political crises facing the business world today. Recent corporate scandals will be highlighted, detailing the damage sustained by the business including brand impact.

Businesses practice corporate social responsibility when they are ethical, contributing to the local and global communities. We will examine how CSR policies and programs manage a business’s societal impact. Some of those impacts include human rights, environmental, product safety, sustainability and anti-corruption.

We will discover how CSR drives company profit including stock prices, revenue, risk management efficiencies, investor interest, customer and employee retention and other benefits. Examples of corporate CSR success stories will be highlighted.

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Howard Silverstone, MBE, CPA/CFF, CFE

Howard Silverstone has a BA (with Honors) in accounting from London Metropolitan University (formerly known as City of London Polytechnic), London, England. He is a licensed certified public accountant in Pennsylvania as well as a chartered accountant (UK) and a certified fraud examiner. He also holds the AICPA’s Certified in Financial Forensics designation. He has presented many programs to the legal, accounting and insurance industries on fraud, the calculation of damages in financial disputes and other financial matters.

Howard has concentrated his practice in the field of forensic accounting since 1985. Howard is a Director of Forensic Resolutions, Inc., which he co-founded in 2004. He was previously with Kroll from 1993 until 2004, including Kroll Lindquist Avey, an international forensic accounting firm. Prior to forming the Philadelphia office of Kroll in 1993, he was a director in a forensic accounting firm and worked for five years at an international accounting firm as both a financial investigator and auditor. He began his career at a public accounting firm in the United Kingdom.

Howard has testified in many different jurisdictions and has also provided testimony at Grand Jury hearings and overseas. Howard has been quoted in many national and international publications and has appeared in the media both in the United States and the United Kingdom. He has also co-authored three books on fraud and forensic accounting and has authored many articles on fraud and related subjects for a variety of publications.

Howard is a past member of the AICPA’s National Forensic and Litigation Services Committee and is a current member of the AICPA’s Fraud Task Force (he is a past Chair of the Task Force) and has twice served as the president of the British-American Business Council for the Philadelphia region and still sits on the board and has held other board positions with organizations in the Philadelphia area.

In June 2018, Her Majesty Queen Elizabeth II appointed Howard as a Member of the Most Excellent Order of the British Empire (MBE) in the United Kingdom’s 2018 Queen’s Birthday Honors. This was in recognition of Howard’s service to British business in the USA.

Irina Balashova, CPA, CIA, CFE

Irina Balashova is a Senior Associate at Forensic Resolutions Inc., a forensic and investigative accounting firm. Prior to joining Forensic

Resolutions, she had worked for a regional CPA firm as a forensic accountant since 2008, analyzing and quantifying the financial

aspects of matters in dispute in various types of cases. Her expertise areas include investigating/analyzing claims related to employee

fraud, business interruption, commercial damages, property claims, lost profits/economic damages, personal injury/wrongful death.

Ms. Balashova is member of the American Institute of Certified Public Accountants, the Association of Certified Fraud Examiners, and

the Institute of Internal Auditors.

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Ms. Balashova received her Masters in Engineering from Bauman Moscow State Technical University in 2004. She received her

Masters in Business Administration from Louisiana State University in 2008. She is a licensed Certified Public Accountant, a Certified

Fraud Examiner and is a Certified Internal Auditor. Irina has presented to the legal and accounting industries on fraud and forensic

accounting and has published several articles on calculating economic damages, fraud and forensic accounting.

Elder Fraud – Financial Abuse Trends

Our society is facing a challenging and underestimated type of fraud – fraud against our elders. According to the most conservative

estimates, 10% of elderly people in the U.S. have already been victims of financial abuse.

Our presentation will discuss how and why this problem became so prominent in recent years. This happened partially due to the

socioeconomic changes in our society. For example, by 2035, older people are projected to outnumber children for the first time in U.S.

history. Another reason is related to the fact that retiring baby boomers are one of the wealthiest generations to retire in the U.S.

We will discuss the main characteristics of victims and perpetrators. We will highlight the conditions that make older people more likely

to fall into deceit/misrepresentation, including being out of the workforce, being socially isolated, and having problems with physical

and mental health. Perpetrators usually have common features, as well, including being in a position of trust, being in financial distress,

or even being a family member.

We will discuss the top ten types of scams, how not to become a victim and how fraud investigators can help. The session will also

provide pointers to look for when dealing with older clients. We will discuss the red flags of potential financial abuse. Finally, the

session will provide attendees with useful tools, including knowledge of recent legislation changes, hotlines, websites of

government/regulating agencies, all of which can be utilized if fraud is suspected.

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Artificial Intelligence, Blockchain, Drones/IoP from The Fraud Examiners Point of View

Deniz Appelbaum, MBA, PhD, Assistant Professor, Department of Accounting and Finance, Montclair State University Dr. Deniz Applebaum ( denizappelbaum@gmail.com ), Assistant Professor of the Department of Accounting and Finance at the Feliciano School of Business of Montclair State University, received her PhD from the Department of Accounting and Information Systems at Rutgers Business School, Newark in May 2017. She enriches her academic pursuits with a practical view, after twenty years of experience in operations, credit, and business development in the corporate world. Dr. Applebaum has published manuscripts in Accounting Horizons, Journal of Emerging Technologies in Accounting, Auditing: Journal of Practice and Theory, and in other academic and practitioner journals, based on her research regarding analytics, big data, and automation in financial auditing and fraud detection. Prior to teaching at Montclair State, her graduate research at Rutgers focused on financial and fraud detection and prevention with automated analytics, transparency of governmental financial reporting, analytical procedures in the external audit process, drones and robotics in auditing and accounting, and BlockChain and big data as audit evidence. Dr. Applebaum continues to emphasize these streams of research with numerous projects and forthcoming publications, and with presentations at accounting organizations and at national and international conferences. Dr. Applebaum emphasizes the use of data analytics and appropriate software tools in the classroom, to prepare accounting and auditing students for the technically advanced modern business environment. The accounting and auditing professions are currently undergoing huge disruptions due to technical innovations, and Dr. Applebaum is devoted to assisting her students to prepare for these changes. With many businesses adopting technologies Blockchain, and Artificial Intelligence, fraud examiners will soon need to become

familiar with these applications. That is, how to audit these complex technologies?

Blockchain applications, or Distributed Ledger Technology (DLT), promises immutable provenance flows and highly secure

transaction processing. However, the complexity of its underlying technology is understood by very few. The fraud examiner must

intimately understand the “black box” of blockchain, verify that it is truly providing the immutable transaction recording that it

claims and verify that the level of permissions and governance controls are effective and enforced.

Artificial Intelligence and Deep Learning are especially challenging for fraud examiners. A fraud examiner must understand exactly

how the AI/Deep Learning application arrived at its decision or action. What were the learning datasets? What were the statistical

weights arrived at by the application at each step? Are there sources of bias or misunderstanding in the code? In short, is the AI

application explainable? The issue of “Explainable AI” is not new – it currently is a major initiative of DARPA – so, what is a fraud

examiner to do when faced with an AI component of an investigation?

This 100-minute presentation will discuss these four technology areas that will impact fraud examination in the very near future.

Fraud examiners cannot be seduced by the glamour and promise of these technologies; instead, we must remain skeptical and gain

an in-depth understanding of exactly how these technologies work and their strengths and weaknesses regarding financial frauds.

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Program Developer

Karl Dahlberg has retired from Rutgers and from the Department of Defense. He has

been involved in numerous contract fraud investigations, the most significant

recovered $69 million. He has instructed online and on-site accounting information

system courses at graduate and undergraduate level. While in the Department of

Defense, he was responsible for all Information Technology Audits at the Northern New

Jersey Branch Office of the Defense Contract Audit Agency (DCAA), Picatinny, New

Jersey. In that capacity, he supervised the performance of all information system

reviews of Defense Contractors in Northern New Jersey. Responsibilities included

Enterprise Resource Planning, Automated Labor Entry and information system control

reviews and Year 2000 Compliance reviews. He served in the Marine Corps as a Rifle

Platoon Leader in Vietnam where he received a Purple Heart for combat wounds. He is

a Past President of the New Jersey Chapter Information Systems Audit and Control

Association; Past President, Northern New Jersey Chapter, Association of Government Accountants; Past President, New

Jersey Chapter, Association of Certified Fraud Examiners; American Institute of Certified Public Accountants CPA Exam

Grader; and Past Commander, American Veterans, Department of New Jersey. He has been awarded the Association of

Government Accounts Educator Award for 2016.

Program Reviewer

Professor Miklos A. Vasarhelyi is the KPMG Distinguished Professor of Accounting

Information Systems and serves as Director of the Rutgers Accounting Research

Center (RARC) & Continuous Auditing and Reporting Lab (CAR Lab). He is credited

with developing the original continuous audit application and is the leading

researcher in this field. At Rutgers Business School, Professor Vasarhelyi heads the

Continuous Auditing and Reporting Laboratory, which is working on projects for such

leading companies as Siemens, KPMG, Proctor & Gamble, D&B, AICPA, CA

Technologies, Workiva, Morgan Stanley, and Brazil’s Itau-Unibanco. Vasarhelyi, who

received his Ph. D. in Management Information Systems from UCLA, has published

more than 200 journal articles, 20 books, and directed over 40 Ph. D. theses. He is

the editor of the Artificial Intelligence in Accounting and Auditing series and the

Journal of Emerging Technologies in Accounting (JETA). He has been named the

Outstanding Accounting Educator by the AAA in 2013. The professor also has taught executive programs on AIS, audit

automation, continuous audit, and electronic commerce to many large international organizations.