Angela Clancy, PPB Advisory
Jay Dawdy, Gryphon Investigations
The Latest Technological Solutions to
Fraud Investigations
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Case Study Introduction
BILLY HAYS
OWNER PROBLEM…
DECREASE IN
PROFIT
MARGINS
JOE CORPORATION
Regional Coffee
Roaster
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Joe Corp’s History of Fraud
1995: Employees stole whole coffee beans.
2000: Delivery drivers stole cash payments on their routes.
2001: Purchasers stole computers.
2005: Sixteen-wheeler delivery truck stolen.
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
State of the Art Security System
Jay Dawdy
Investigator
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Introducing the Accountants
SANDY SUGAR
LUKE SMITH
AKA
“COOL”
I took a look and it
appears to be due
to an increase in
IT and repair
costs, which have
cut into the
margins.
Repair costs keep
increasing
because old
equipment needs
constant repairs
and we haven’t
invested in new
plant equipment in
many years.
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Trigger Point - Surveillance Cameras
Location: Corporate Office
Time: 00:20:40
Date: 04.12.2010
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
The Investigation Begins
Jay Dawdy
Investigator
Angela Clancy
Forensic Accountant
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Obtain a Mirror Image of the Computer Drives
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Distinguishing Between Internal and External E-Mails
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Review of Instant Messages
AIM Instant Chat Between
Smith and Brown
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Status of the Investigation
Who is ghost rider?
Background check of vendors?
Exile?
Who is Wild Bill?
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Identifying the Owner of an E-Mail Account
NO REGISTRATION INFORMATION
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Bankruptcy Fillings
Exile Industries
Declared Bankruptcy
3 years ago
Owner: William Panetta
WILD BILL!
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Background Check of William Panetta
DMV Search
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Connecting the Dots
Exile Owner: William Panetta
= Wild Bill
Exile Vendor
Fraud Scheme?
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Red Flag Vendors with a PO Box
Vendor: Exile Industries
Changed from a physical address
to a PO Box in 2007
Lsmith was the user who made the
change
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Change in Invoice Sequence
Step One: Step Two:
New Column
Step Three:
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Change in Invoice Sequence
Generated 5 Red Flags
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Change in Invoice Sequence
Unusual Change in
Sequence
5 Digit Code to a 6
Digit Code
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Assessing User Patterns
Every other PO
User has multiple
Users updating the
system
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Exile Industries
Increase in Purchases each Year
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Receiving Department Interview
Brian Jones
Head of the Receiving Dept
Instead of the parts
being received through
the receiving
department, as was the
normal process, Jane
Brown would notify us
that she had received
the parts directly.…
She always provided
us with FedEx receipts,
which we entered into
our system.
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Other Interviews
No knowledge of recent
purchases from Exile
Rumor of Jane and Cool
being romantically
involved
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
The Jig Is Up, But
How Much? Where is the Money?
Exile Industries
Declared Bankruptcy
3 years ago
Jane Brown and Cool
were responsible for
processing all the Exile
Industries invoices
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Interview with Wild Bill
WILLIAM PANETTA
AKA “WILD BILL”
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Wild Bill Describes What Happened
Before Exile Went into Bankruptcy
I can give you more
business but you have to
kick back 20%...
and you can raise your
prices by 20%
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Wild Bill Describes What Happened
Before Exile Went into Bankruptcy
Exile
Invoice
$10,000
As a result of
this scheme I
get more sales
– this might
save my
business
As a result of
this scheme I
get 20% cash
for each
invoice from
Exile
$2,000 Kickback
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Wild Bill Describes What Happened
After Exile Went into Bankruptcy
I know you’re bankrupt
but we can continue this
scheme…
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Wild Bill Describes What Happened
After Exile went into Bankruptcy
Fictitious
Invoice
$10,000
Cool Processed the
Payment
$7,000
kickback
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Quantifying the Loss
TOTAL LOSS = $4,400,000
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Negotiating a Deal
My clients will
settle for $500,000
and a good word
with the
prosecutors.
NO
DEAL!
I’ll have them
prosecuted
AND
I’ll find that
money.
THE LAWYER BILLY HAYS
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Traditional Asset Searches
• Real Property
• Corporate Affiliations/ Assets
• Motor Vehicles
• Boats
• Aircraft
• Securities Holdings
• Other Assets
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Enduring the Process of
Receiving Paper Documents
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
The Optical Character Recognition (OCR) Process
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
The Optical Character Recognition (OCR) Process
Ensure Accurate OCR
Process
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Converting the Bank Statements
into an Excel Format
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Identification of Potential Assets
Analysis the coding of wire transfers to find additional
Bank Accounts
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Visit to the Marina
They took off and moved it
down South…. somewhere
in the Caribbean …. the
name of the boat,
“Giovanna.” A beautiful 50
footer.
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Assets Recovered
$900K TORTOLA BANK ACCOUNTS
$1M YACHT
$750K U.S. BANK ACCOUNTS
$2.65M RECOVERED
Angela Clancy, RGL Forensics
Jay Dawdy, Gryphon Investigations
Contact Information
Jay Dawdy
Gryphon Investigations
914-730-9027
Email: [email protected]
www.gryphoninvestigations.com
Angela Clancy
PPB Advisory, Australia
+61 3 9269 4123
Email: [email protected]
www.ppbadvisory.com.au