Fraud Fighters Wanted

Global Threats Create Boom Times for Fraud Examiners

Fraud today is global. The same problems happening in the U.S. are simultaneously occurring in other parts of the world. For interested job seekers, there's never been a better time to enter the fraud examiner profession.

"The field is exploding," says James Ratley, head of the Association of Certified Fraud Examiners. "There are some tremendous opportunities available, both in the government and private sector."

Fraud examiners today need to wear many hats and have a large skill set, including forensic IT, understanding financial transactions and investigative skills. "There are just a wide variety of skills that are necessary to be able to do this job," Ratley says in an interview with BankInfoSecurity.com's Tom Field [transcript below].

That's why more and more people are coming together as a fraud examination team, able to encompass all the skills that are needed. Now is a great time to become educated and migrate to the field. Professionals are moving mid-career to the profession and over 400 universities are teaching fraud examination courses for interested students.

Ratley's advice for those interested in entering the field: "Learn as many of those skills as you can," he says. "Right now, probably the section most in demand is forensic IT, because as you are well aware, you can't do anything without using a computer."

In an exclusive interview about global fraud trends and career opportunities for fraud examiners, Ratley discusses:

  • Today's top fraud risks;
  • How the fraud examiner profession has evolved;
  • Skills necessary to enter the profession today.

A former Dallas police officer, Ratley left the police department in 1986 to join Wells & Associates, a forensic accounting practice, where he was in charge of fraud investigations. He handled investigations regarding internal frauds, conflicts of interest, and litigation support. In 1988, he was named Program Director for the Association of Certified Fraud Examiners and oversaw all aspects of the ACFE's training and education programs.

In 2006, Ratley was named President of the ACFE, and in 2011 he was also named CEO of the organization. In this role, he works to promote the ACFE to the public and other professional organizations and continues to assist in the development of anti-fraud products and services to meet the needs of ACFE's members. In addition, he is a member of the ACFE's faculty, and teaches regularly at workshops and conferences on a variety of fraud-related subjects.

In 2005, Ratley was awarded the Association of Certified Fraud Examiners' Cressey Award. The Cressey Award is the ACFE's highest honor. It is bestowed annually for a lifetime of achievement in the detection and deterrence of fraud.

TOM FIELD: To start out, maybe you could tell us a little bit about yourself and your own experience with fraud fighting please.

JAMES RATLEY: I just happened into the fraud fighting experience. I was a Dallas police officer for fifteen years. At that time we had about 2300 members to the department, and as far as I know I was the only one that had an accounting degree. As a result, any time we would have any type of reported crime that had a dollar sign in front of it, they would usually pull me off either a task force or just pull me off of whatever job I was working on to work that case, and I wasn't that happy about it. I was in line to go to a homicide division and got pulled on of a major task force for a fraud, and at the time you have to understand there was no term such as fraud examiner and nobody would have gave much attention to fraud. Of course that has changed over the years.

Top Fraud Risks

FIELD: As you know the news these days is just rife with fraud incidents. When you look around globally, what do you see as the top fraud risks to organizations of all types?

RATLEY: Fraud has become so massive. One of the things when I first started working fraud cases is we talked to most frauds in the hundreds of thousands of dollars, and if you got anything close to a million dollars, you had a massive fraud. In today's market, nobody really pays much attention to anything that's not in the millions or even the billions. Plus with computers and identity fraud, it's so much easier to steal.

FIELD: When you look at the different regions of the globe, how do you see the fraud threats and risks differing globally, if they do at all?

RATLEY: I think that has been the main surprise. I am one of the founders of the Association of Certified Fraud Examiners and at that time I had not done a lot of international traveling. Since that time, I have put almost three million miles on an airplane going all over the world, and a number of things have been quite surprising about that. In Hong Kong, they had the same fraud problems that we had here in the United States.

I think the most shocking factor to it is, any place I've been in the world, people react the exact same way as we do here in the United States. The fraud perpetrators use the same excuses. They perpetrate the fraud through the same methods and same techniques. Managers all react the same. One of the things you'll find with fraud is it's an adversarial position for the fraud examiner, because nobody wants there to have been a fraud and everybody wants there to be a reasonable explanation for it. Often times the fraud examiner will find themselves at a crossroads even with their own managers, because everyone is trying to explain a person's actions.

Fraud Examination Profession

FIELD: That's a good transition to my next question, which is about the profession of fraud examination. How does the profession evolve from the types of incidents that you've seen in recent times?

RATLEY: As we started the association in 1988, at the time "fraud examiner" was never used and it didn't exist. Fraud was just whoever happened to be in the office that day that got assigned to the fraud case. They didn't have specific training for it. And about that time law enforcement became so overwhelmed that they were unable to offer even the most basic assistance in the fraud examination. So it became the responsibility in a lot of cases of the internal auditor or the security department. There were no set standards; there were no set investigative techniques. You had a wide variety of ways these cases were handled, and as a result often times absolutely nothing was done.

I'm familiar with one woman back during that period that stole $10 million and served nine months in jail for it. It was just a wide disparity in the way that these cases were handled and the punishment, the way it was dealt with. The majority of the time nothing happened, and then over time fraud became so expensive that people were forced to deal with it. That is what we are seeing today. We've seen in the last several years the devastating impact fraud can have on the innocent bystanders in that they loose their retirement; they loose their job, all within a 24-hour period.

FIELD: Given how the profession has evolved, how would you describe the fraud examiners' main responsibilities today?

RATLEY: I have seen in the last five to seven years a big transition there. At one time, early in my days with the association, you couldn't get anyone to listen to you when you talked about fraud prevention. Nobody was interested in that because in effect you were spending money on a negative. You didn't see any direct results. It didn't generate any revenue and as a result nobody was interested in what it took to prevent fraud. Over the last five to seven years that has been a complete 180-degree turn.

Now you've got risk assessment people. They come in and they look for the vulnerable areas. People are doing background checks. They're doing everything they can to prevent it before it starts. And it's effective too and it's working for them. The more that it works the more diligent they are in trying to prevent it before it ever starts. You see hotlines now. When hotlines first became available many of the companies didn't want them. They called them snitch lines. They looked at them as problematic. Now, you can't find a major corporation or an active business that doesn't have some type of reporting system. The ones that don't have the reporting system are dinosaurs.

Top Skills Needed for Fraud Examination

FIELD: As you say, when you got into the profession all you needed was your experience in law enforcement, and you were the guy in the office that had an acumen for numbers. What are the necessary skills today for someone that wants to be a fraud examiner?

RATLEY: First off, the fraud examination field is a profession in itself. Many times in the early days, I saw people that didn't do fraud examination for a living and actually didn't have any interest in it. They were given the responsibility of conducting a fraud examination; but fraud is such a pervasive problem. There are specific techniques that you have to know. You can't take an auditor and say go examine a fraud. They've got to be trained as to how to do that; but it's so pervasive in our system. I don't know any one fraud examiner that has every skill that a fraud examiner needs. You've got the forensic IT aspect of it. Go back in and pull the information off of the computer.

Case in point this Casey Anthony trial. The mother claims she had looked on the Internet for chloroform. Forensic IT people came in and showed that happened during a certain time when the mother was not even in the house. So obviously she didn't do it at the time she said she did. But you've also got the legal aspect of it. How far can you go in pulling information off of these computers? Then you've got the financial aspect of fraud. Often times there are complex financial transactions. And then you've got what I call the backbone of the fraud examination field - the investigative skills that you need, the ability to conduct an interview.

I run across fraud examiners today that never had formal interview training. What you find is the untrained interviewer can be successful about 65 percent of the time. You take a trained interviewer and they're successful about 95 percent of the time. You've got the document collection skills. There's just a wide variety of skills that are necessary to be able to do this job. That is why more and more of what you are seeing are people coming together as a team, and you'll have a fraud examination team that will be there just to encompass all the skills that you need.

Career Opportunities in Fraud Examination

FIELD: What types of career opportunities are there for fraud examiners today that there might not have been even just a few years ago?

RATLEY: The field is exploding. There are some tremendous opportunities available, both in the government and private sector. We get calls daily from people that are mid-career that want to change into the fraud examination profession. But another thing is we've got over 400 universities now that are teaching fraud examination courses offered by the Association of Certified Fraud Examiners. We've got about 20 student chapters. We even had one in Turkey. More and more the fraud examination field is a draw to our college students and younger people that want to come into the profession.

FIELD: Final question for you. For someone that wants to enter the field today, whether it is to start a career or as you described to restart a career, what advice would you give to them?

RATLEY: I would say there are certain skills that you need to have. I mentioned earlier the forensic IT, accounting and legal. My advice there would be to learn as many of those skills as you can. Right now, probably the section most in demand is forensic IT, because as you are well aware, you can't do anything without using a computer. And more and more organizations are using computer evidence to verify or prove deception in the perpetrator's claims. There are boundless jobs there and you have to prepare yourself with the knowledge that these employers need. You do that through education. We've got universities now that are offering master's degrees in forensic accounting.

The mid-career change people have the most difficult time because they're in a job that's usually paying a decent wage and they want to go to the fraud examination field. Unless they have the knowledge, they're going to start at the bottom. My advice to them would be this. Fraud is in every industry. Look at the industry in which they've had their experience and their knowledge and see how they can work in the fraud examination field in that industry. If they're an engineer, let them look at that field. We have fraud examiners that are physicians in the medical field. They deal with healthcare fraud.





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