Monday, August 24, 2009

For Group of Skeptics, the Truth Is Out There

From the Wall Street Journal:

Corporate conspiracy theorists, whistle-blowers and suspicious financial minds long have struggled to get an audience for accusations of business fraud.

But on the heels of the Bernard Madoff scandal and a host of smaller Ponzi schemes and misdeeds, these skeptics are enjoying newfound appreciation.

"We're suddenly on Broadway, on the tip of everyone's tongue," said Lewis Freeman, who has a forensic-accounting firm in Miami. "Before it was off-Broadway, or even in Boston."

Last month, more than 2,000 accountants, auditors and attorneys who run their own investigative firms met in Sin City to compare tips for rooting out wrongdoing and to identify fertile ground for future scandals. Mortgage workouts and corporate espionage were top candidates.

The group, the Association of Certified Fraud Examiners, said it has 47,000 members, up more than 25% in the past few years. They feted Harry Markopolos, a Boston investigator who for years tried in vain to persuade regulators that Mr. Madoff was a scam artist.

He received the organization's annual award and a standing ovation from the group, whose outlook might be summed up this way: "There are only two types of people: the caught and the uncaught," Mr. Freeman said.

Now attention is switching to Mr. Markopolos's fellow fraud examiners, as the recession shows new tales of corporate abuse and presents temptation for other would-be fraudsters. Examiners are busier than ever, they said.

"It's an exciting time in my life, I feel I might actually get somewhere," said Thomas Gober, an attendee who has been chasing alleged improprieties he sees in the insurance industry for decades, often in frustration.

For two years, Mr. Gober said he wore a hidden tape recorder to help authorities gather evidence in an insurance probe. He said he also has taken on health-care fraud, sometimes working with the Federal Bureau of Investigation and Justice Department. The FBI and Justice Department didn't comment.

Among the tips he shared at the conference: When hired by a company to unearth internal problems, cozy up to information-technology directors who can access all kinds of incriminating emails.

Most fraud examiners share a suspicion that criminal activity is rampant within companies, and regulators are incapable of stopping it. Between sessions, attendees chatted about ways to encrypt electronic files or foil snoops.

Full article here.

No comments: