What to Do After You File Your Investigation Report

As a fraud investigator, you may be used to being given a case, investigating it, submitting a report with the findings and then moving on to the next case with little follow up on what the result of the report was. But what happens after the report is filed may be just as important for the organization as the investigation itself.

Sherman McGrew, J.D., CFE, highlighted the importance of what happens after an investigation in his virtual session at the 2020 ACFE Fraud Conference Europe. McGrew, who is a program analyst at the U.S. Transportation Security Administration (TSA) walked the audience through the practical steps of investigating a fraud allegation. Although many fraud examiners may be removed from the process after the investigation is complete, McGrew urged them to make a few recommendations to their employers before they’re completely done with the process.

One tip McGrew gave is that if the fraud was serious enough, talk to HR before the perpetrator is confronted with the report findings and have security standing by to escort them out of the building. “A tremendous amount of damage can be done by an individual,” said McGrew. “If you’re going to be taking action against them, get them out of the building.” McGrew specifically suggested making sure any keys, access badges, network logins or other ways a perpetrator can access parts of the company, are confiscated or invalidated before the meeting confronting them is over.

Another aspect to consider with the aftermath of fraud investigations is whether the fraud will come out in the news. “A disgruntled employee is going to pick up the phone and call the newspaper,” said McGrew. He stressed that the best way to avoid this is to get out in front of the story. “Your job is to recommend that the bosses hold a press conference … if you do that, [the story] runs for one news cycle and then it’s over.”

He said the choice to not publicly address a newsworthy fraud is akin to dying from a thousand cuts. “If it doesn’t die a natural death, it’ll become 10 times worse,” said McGrew. “Management’s going to hate you … it’s painful but then it’s over.” He also said a good press conference or statement should be forthright and transparent about the fraud, as well as include the steps the victim organization is taking to rectify the problem. “A person who sees that on TV goes, ‘Oh, they had a problem and they fixed it.’ They respect that,” he said. “If the fraud is big enough that it’s going to be newsworthy, get out in front of it … either you control the news cycle, or it will control you.”

Over the course of your next investigation, give some thought to not just carrying out the task at hand, but also what the outcome may be for the victim organization. Your professional suggestions may be the difference between a public relations disaster and a brief pain point that ends quickly.