Fraud Investigation, Evidence, and Interviewing
An investigation is a sequence, not a search. CFBE tests the order of steps, the weight and admissibility of evidence, and interviewing technique - including what you may not do.
Process
- Predication - a reasonable, articulated basis to investigate.
- Case plan - scope, hypotheses, legal constraints, team.
- Evidence collection - documents first, with volatile digital evidence preserved early using hashing and chain of custody.
- Interviews - generally witnesses first and the subject last.
- Reporting - findings, evidence, loss quantification, control recommendations.
- Remediation and referral.
Evidence types are testimonial, documentary, physical, and personal observation. The best evidence rule prefers originals, and copies need authentication. Chain of custody records every transfer, and a break weakens weight. Business records are a common hearsay exception.
Interviewing
Structured, non-coercive approaches dominate: the PEACE model (Planning and Preparation, Engage and Explain, Account, Closure, Evaluate) and cognitive interview techniques that improve recall. Admission-seeking interviews move through rationalisation, transition, and a written statement. Private-sector interviewers are not bound by Miranda, but coercion, false imprisonment, and threats invalidate statements and create liability. Union-represented employees may have Weingarten rights in investigatory interviews.
Worked example
An employee is suspected of expense fraud. The manager wants to call him in immediately and ask for his phone.
Reasoning: wrong order. Secure the documentary record first - expense reports, receipts, card statements, approvals. Then interview peripheral witnesses, then the subject, with a prepared question plan, a witness present, and no promise of leniency. Do not seize a personal phone without consent or legal authority; if consent is given, document it and preserve content with a hash. Obtain a written statement, have the subject read and sign it, then quantify the loss and decide on referral.
Traps
- Interviewing the subject first, destroying corroboration opportunities.
- Promising confidentiality or leniency you cannot deliver.
- Assuming a confession removes the need for documentary evidence.
- Ignoring privilege: attorney-client communications and work product are not yours to seize.