Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, FCPA, Foreign Corrupt Practi..., Fraud, Fraud and Forensic Inv..., Fraud Risk Management, General Counsel, Governance, Internal Audit, Internal Controls, Risk, White Collar Crime Jonathan T. Marks Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, FCPA, Foreign Corrupt Practi..., Fraud, Fraud and Forensic Inv..., Fraud Risk Management, General Counsel, Governance, Internal Audit, Internal Controls, Risk, White Collar Crime Jonathan T. Marks

FCPA - The Role of The Board and More!

One of the FCPA themes for 2020 has been hiding in plain sight all along. The FCPA requirement that “reporting companies to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that, among other things, transactions are executed following management’s general or specific authorizations, and access to assets is permitted only in accordance with management’s general or specific authorization.” But what if the violation of this requirement occurs in a non-foreign (IE., the U.S.) and in a non-bribery situation.

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Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Risk, Risk Assessment, Risk factors, Risk Management, White Collar Crime Jonathan T. Marks Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Risk, Risk Assessment, Risk factors, Risk Management, White Collar Crime Jonathan T. Marks

Common Pitfalls - Fraud Risk Assessment

Risk assessments are part of the discipline of risk management, where enhanced frameworks and techniques have emerged. Risk management comprises the identification, assessment, and prioritization of risks followed by the coordinated and efficient use of resources to monitor, minimize, and otherwise control the organization's risks.
Risks arise in many forms and range from uncertainty in financial markets, operational failures, natural disasters, and pandemics to legal liabilities and reputational harms.

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CARES Act, Compliance, COVID -19, DOJ, Ethics, False Claims Act, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Investigations, Lessons Learned, Monitoring, Payroll Protection Pro..., PPP, Risk, Whistleblower, White Collar Crime Jonathan T. Marks CARES Act, Compliance, COVID -19, DOJ, Ethics, False Claims Act, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Investigations, Lessons Learned, Monitoring, Payroll Protection Pro..., PPP, Risk, Whistleblower, White Collar Crime Jonathan T. Marks

First Civil Settlement for Fraud on Cares Act Paycheck Protection Program

On January 12, 2021, the U.S. Attorney’s Office for the Eastern District of California announced the first civil settlement with a borrower for allegedly committing fraud in obtaining a Paycheck Protection Program ("PPP") loan, in violation of the False Claims Act ("FCA") and the Financial Institutions Reform, Recovery and Enforcement Act ("FIRREA").The FCA allows the government to recover damages and penalties for presenting false claims for payment to the United States. FIRREA allows the government to impose civil penalties for violations of enumerated federal criminal statutes, including those that affect federally-insured financial

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10-80-10, 10-A, 3 Lines, ACFE, AICPA, Analytics, Anti-fraud, Antitrust, Audit, Audit Committee, Automation, Baker Tilly, Blockchain, Board of Directors, Books and records, Bribery, Business Intelligence, Caremark, Cash, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Colleges and Universities, Collusion, Compliance, Compliance Coordinator, Conflict of Interest, Continuous Auditing, Continuous Monitoring, Control, Control Environment, Coronavirus, Corporate Fraud, Corruption, COSO, Court, COVID -19, Crisis, Crisis Management, Critical Audit Matters, Cross Border Investiga..., Cryptocurrency, Culture, Culture Assessment, Cyber, Damages, Data, Data Analytics, Data Integrity, Directors, Disclosure, Dodd Frank, Dodd-Frank, DOJ, Due Diligence, Dunning Kruger, Enforcement, Enterprise Risk Resili..., Enterprise Risk Resili..., EQS, ERM, Ethics, Evidence, Exit Interview, Fake Invoices, False Claims Act, FCPA, Federal Sentencing Gui..., Financial reporting an..., FinCen, Food Safety, Foreign Corrupt Practi..., Forensic Accounting, Forensically Speaking, Four eyes approval, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, Fraud Task Force, Fraud Triangle, GAAP, GDPR, General Counsel, Gifts, Global, Governance, GRC, Guidance, Hidden Assets, Hotline, IDORP, IIA, IIA Philadelphia, IIOT, Impairment, Initial Coin Offering, Insider Trading, Internal Audit, Internal Control Defic..., Internal Controls, Interview, Investigations, Jonathan T- Marks, Judgment and Estimates, Keyword, Kickbacks, Leadership, Legal, Lessons Learned, Management Override, Materiality, MD&A, Money Laundering, Monitor, Monitoring, Monitorship, NACD, Nonprofit, Not for Profit, OFAC, Office of Foreign Asse..., Oversight, Phishing, Podcast, Policies and Procedures, Process Improvement, Proxy, Qui Tam, ransom, Ransomeware, Red Flag, RegTech, Regulatory, Related Party, Remediation, Remote Internal Invest..., Remote Investigations, Reputation, Restatement, Risk, Risk Assessment, Risk factors, Risk Management, Robotic, Root Cause, Sampling, Sarbanes-Oxley, Seaboard, SEC, Shell Company, Skepticism, Slush Fund, Supreme Court, Tax, Tax Fraud, Technology, Theft, Third Party, Thought Leadership, Three Lines, Three Lines of Defense, Tips, tone at the top, Tone from the Top, Training, Treasury, Triage, Uncategorized, Values, Webinar, Whistleblower, White Collar Crime, Yellow Flag Jonathan T. Marks 10-80-10, 10-A, 3 Lines, ACFE, AICPA, Analytics, Anti-fraud, Antitrust, Audit, Audit Committee, Automation, Baker Tilly, Blockchain, Board of Directors, Books and records, Bribery, Business Intelligence, Caremark, Cash, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Colleges and Universities, Collusion, Compliance, Compliance Coordinator, Conflict of Interest, Continuous Auditing, Continuous Monitoring, Control, Control Environment, Coronavirus, Corporate Fraud, Corruption, COSO, Court, COVID -19, Crisis, Crisis Management, Critical Audit Matters, Cross Border Investiga..., Cryptocurrency, Culture, Culture Assessment, Cyber, Damages, Data, Data Analytics, Data Integrity, Directors, Disclosure, Dodd Frank, Dodd-Frank, DOJ, Due Diligence, Dunning Kruger, Enforcement, Enterprise Risk Resili..., Enterprise Risk Resili..., EQS, ERM, Ethics, Evidence, Exit Interview, Fake Invoices, False Claims Act, FCPA, Federal Sentencing Gui..., Financial reporting an..., FinCen, Food Safety, Foreign Corrupt Practi..., Forensic Accounting, Forensically Speaking, Four eyes approval, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, Fraud Task Force, Fraud Triangle, GAAP, GDPR, General Counsel, Gifts, Global, Governance, GRC, Guidance, Hidden Assets, Hotline, IDORP, IIA, IIA Philadelphia, IIOT, Impairment, Initial Coin Offering, Insider Trading, Internal Audit, Internal Control Defic..., Internal Controls, Interview, Investigations, Jonathan T- Marks, Judgment and Estimates, Keyword, Kickbacks, Leadership, Legal, Lessons Learned, Management Override, Materiality, MD&A, Money Laundering, Monitor, Monitoring, Monitorship, NACD, Nonprofit, Not for Profit, OFAC, Office of Foreign Asse..., Oversight, Phishing, Podcast, Policies and Procedures, Process Improvement, Proxy, Qui Tam, ransom, Ransomeware, Red Flag, RegTech, Regulatory, Related Party, Remediation, Remote Internal Invest..., Remote Investigations, Reputation, Restatement, Risk, Risk Assessment, Risk factors, Risk Management, Robotic, Root Cause, Sampling, Sarbanes-Oxley, Seaboard, SEC, Shell Company, Skepticism, Slush Fund, Supreme Court, Tax, Tax Fraud, Technology, Theft, Third Party, Thought Leadership, Three Lines, Three Lines of Defense, Tips, tone at the top, Tone from the Top, Training, Treasury, Triage, Uncategorized, Values, Webinar, Whistleblower, White Collar Crime, Yellow Flag Jonathan T. Marks

2020 Top 10 Articles on Fraud, Compliance, and Risk Management

Happy New Year, and thank you to the more than 100,000 people that visited Board and Fraud in 2020!
With everything that happened last year, fraud, compliance, and risk management have arguably become more important than ever.

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Anti-fraud, Baker Tilly, Bribery, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Money Laundering, Red Flag, White Collar Crime Jonathan T. Marks Anti-fraud, Baker Tilly, Bribery, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Money Laundering, Red Flag, White Collar Crime Jonathan T. Marks

Congress Approves Anti-Money-Laundering (AML) Measure

Money laundering issues have haunted many over the years.  To promote greater transparency, the U.S. Sen­ate has ap­proved leg­is­la­tion re­quir­ing com­pa­nies in the U.S. to reg­is­ter their true owners. This change would help com­bat money laun­der­ing and the fi­nanc­ing of ter­ror­ism.

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Anti-fraud, Baker Tilly, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Ethics, Exit Interview, Fraud, Fraud and Forensic Inv..., Internal Audit, Internal Controls, Interview, Lessons Learned, Red Flag, Risk Management Jonathan T. Marks Anti-fraud, Baker Tilly, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Ethics, Exit Interview, Fraud, Fraud and Forensic Inv..., Internal Audit, Internal Controls, Interview, Lessons Learned, Red Flag, Risk Management Jonathan T. Marks

The Properly Designed Exit Interview a Necessary Step in Uncovering Ethical Violations

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Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, Ethics, Fraud, Fraud Risk Management, Governance, Internal Audit, Risk Jonathan T. Marks Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, Ethics, Fraud, Fraud Risk Management, Governance, Internal Audit, Risk Jonathan T. Marks

Herbalife - “Quis Custodiet Ipsos Custodes” - Translated: Who Will Guard the Guards Themselves, or Who will Watch the Watchmen?

Herbalife's business relationship in China was committed to illegal activity, which it knew or should have known violated the FCPA. Specifically,  beginning in late 2006, Herbalife China provided improper benefits and payments to government officials to obtain direct selling licenses for two cities.
Herbalife paid out millions of dollars in bribes. Fraudulent expense reimbursements were used to fund the bribes, which is is a common tactic for these types of bribes.Specifically, the SEC found that Herbalife China paid bribes through extravagant meals, gifts, and other benefits given to Chinese officials to obtain sales licenses and remove negative media coverage in China. Managers at the subsidiary asked employees to falsify expense report documents, for example, adding names to meal receipts to get below the company's per head spending limit. It also found that the payments and benefits were inaccurately recorded and that Herbalife failed to maintain a sound system of internal controls.

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Business Intelligence, Compliance, Data Analytics, Enterprise Risk Resili..., Ethics, Fraud, Fraud and Forensic Inv..., Internal Audit, Internal Control Defic..., Internal Controls, Regulatory, Risk, Risk Assessment, Risk Management, White Collar Crime Jonathan T. Marks Business Intelligence, Compliance, Data Analytics, Enterprise Risk Resili..., Ethics, Fraud, Fraud and Forensic Inv..., Internal Audit, Internal Control Defic..., Internal Controls, Regulatory, Risk, Risk Assessment, Risk Management, White Collar Crime Jonathan T. Marks

SEC and its New Silent Whistleblower: Risk Based Data Analytics

The SEC just announced its first actions arising from investigations generated by the Enforcement Division's EPS (Earnings Per Share) Initiative, which utilizes risk-based data analytics to uncover potential accounting and disclosure violations caused by, among other things, earnings management practices.

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Anti-fraud, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, DOJ, Enterprise Risk Resili..., Fake Invoices, Foreign Corrupt Practi..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Internal Audit, Kickbacks, Money Laundering, Red Flag, Shell Company, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, DOJ, Enterprise Risk Resili..., Fake Invoices, Foreign Corrupt Practi..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Internal Audit, Kickbacks, Money Laundering, Red Flag, Shell Company, White Collar Crime Jonathan T. Marks

DOJ Unravels a Decade-Old Scheme that involved Kickbacks, Money Laundering, Sham Shell Companies, and Fake Invoices

According to evidence presented at trial, Aleksandr Pikus, 45, of Brooklyn, New York, and his co-conspirators perpetrated a scheme through a series of medical clinics in Brooklyn and Queens over nearly a decade.   The clinics employed doctors, physical and occupational therapists, and other medical professionals who were enrolled in the Medicare and Medicaid programs.  In return for illegal kickbacks, Pikus referred beneficiaries to these health care providers, who submitted claims to the Medicare and Medicaid programs.Pikus and his co-conspirators then laundered a substantial portion of the proceeds of these claims through companies he controlled, including by cashing checks at several New York City check-cashing businesses.  Pikus then failed to report that cash income to the IRS.  Instead, Pikus used the cash to enrich himself and others and to pay kickbacks to patient recruiters, who, in turn, paid beneficiaries to receive treatment at the medical clinics.  The evidence further established that Pikus and his co-conspirators used sham shell companies and fake invoices to conceal their illegal activities.

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Anti-fraud, Audit Committee, Bribery, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Compliance, EQS, Ethics, Fraud, Fraud and Forensic Inv..., Governance, Hotline, Internal Audit, Internal Controls, Investigations, Monitor, NAVEX, Red Flag, Regulatory, Risk Assessment, Risk factors, Risk Management, Technology, Tips, Triage, Values, Whistleblower, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Bribery, Chief Audit Executive, Chief Compliance Officer, Chief Legal Counsel, Compliance, EQS, Ethics, Fraud, Fraud and Forensic Inv..., Governance, Hotline, Internal Audit, Internal Controls, Investigations, Monitor, NAVEX, Red Flag, Regulatory, Risk Assessment, Risk factors, Risk Management, Technology, Tips, Triage, Values, Whistleblower, White Collar Crime Jonathan T. Marks

Are you ready? New EU Whistleblower Protection Law!

Soon all public and private organizations in the EU with more than fifty (50) employees will soon be required to comply with a new EU Whistleblower Protection law. The new law highlights the importance of responsive, transparent, and timely whistleblowing case management. So just implementing a hotline is not enough. Organizations must consider confidentiality, acknowledgment of the tip or compliant, response times, the competence of persons receiving the reports, communication with the whistleblower, and feedback on how the case is being processed. The new law also includes the right to report concerns externally while remaining legally protected. That's a risk organizations must avoid. With the December 2021 deadline fast approaching, there is no better time for management and boards to act. Read more!

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Baker Tilly, Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, Corruption, Cross Border Investiga..., Data Analytics, Ethics, Foreign Corrupt Practi..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Governance, Internal Audit, Internal Controls, Interview, Investigations, Policies and Procedures, Red Flag, Remote Internal Invest..., Remote Investigations, Risk, Volkov, Webinar, Whistleblower, White Collar Crime Jonathan T. Marks Baker Tilly, Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, Corruption, Cross Border Investiga..., Data Analytics, Ethics, Foreign Corrupt Practi..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Governance, Internal Audit, Internal Controls, Interview, Investigations, Policies and Procedures, Red Flag, Remote Internal Invest..., Remote Investigations, Risk, Volkov, Webinar, Whistleblower, White Collar Crime Jonathan T. Marks

Webinar - July 28, 2020 - Best Practices for Conducting Remote Internal Investigations

In this pandemic era, global companies have been challenged to maintain a reliable and effective internal investigation program. Companies have relied on remote investigation strategies to collect and review documents and conduct interviews. In conducting remote investigations, companies have to ensure that they follow investigation requirements, maintain the confidentiality of the process, and comply with applicable data privacy rules and security requirements.In this webinar, Jessica Sanderson, Partner at The Volkov Law Group, and Jonathan T. Marks, Partner| Leader of the Global Forensic Investigation, COmpliance & Integrity Practice at Baker Tilly, will discuss best practices for conducting remote internal investigations. They will outline strategies for collecting and reviewing documents, analyzing financial data, and conducting interviews using remote technologies.

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Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, Corruption, DOJ, FCPA, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Gifts, Governance, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Legal, SEC Jonathan T. Marks Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, Corruption, DOJ, FCPA, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, General Counsel, Gifts, Governance, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Legal, SEC Jonathan T. Marks

SEC & DOJ Release Second Edition of the Resource Guide to the U.S. Foreign Corrupt Practices Act

The SEC and DOJ Resource Guide is intended to provide information for businesses and individuals regarding the U.S. Foreign Corrupt Practices Act (FCPA). The guide has been prepared by the staff of the Criminal Division of the U.S. Department of Justice and the Enforcement Division of the U.S. Securities and Exchange Commission.The key changes to the Second Edition reflect developments and issues that are well-known to experienced practitioners. Nevertheless, the updated Guide emphasizes the importance of effective (and “adequately resourced”) compliance programs, risk-based diligence efforts, and voluntary self-disclosures.   

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Anti-fraud, Audit Committee, Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, COVID -19, Crisis, Crisis Management, Directors, DOJ, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Risk Management, General Counsel, Governance, Investigations, Jonathan T- Marks, Risk, Risk Assessment, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Chief Audit Executive, Chief Compliance Officer, Compliance, Corporate Fraud, COVID -19, Crisis, Crisis Management, Directors, DOJ, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Risk Management, General Counsel, Governance, Investigations, Jonathan T- Marks, Risk, Risk Assessment, White Collar Crime Jonathan T. Marks

COVID-19 - Fraud On The Rise is No Surprise!

Last week, the Association of Certified Fraud Examiners (” ACFE”) published the results of a survey taken by more than 1,800 anti-fraud professionals in late April and early May 2020, while we were deep into the Covid-19 crisis.  The findings, for the most part, are not surprising, but does reveal some disappointing information.  While I have not seen a raw copy of the survey, I was surprised the ACFE didn’t ask if the company’s fraud risk assessment was reviewed and modified accordingly.In addition, the survey highlights trends in the overall level of fraud. Survey respondents provided information about their current observations and expected changes regarding ten (10) specific types of fraud.

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AICPA, Audit Committee, COVID -19, Crisis, DOJ, Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Task Force, Risk Management, SEC, White Collar Crime Jonathan T. Marks AICPA, Audit Committee, COVID -19, Crisis, DOJ, Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Fraud Task Force, Risk Management, SEC, White Collar Crime Jonathan T. Marks

The Next Level of Investigations

Many investigations are currently being performed remotely, in concert with the general counsel, the chief compliance officer, the chief audit executive, and depending on the how the allegation was triaged, with outside counsel, a forensic accounting firm, and the board.  Even government prosecutors are interviewing witnesses remotely.The primary goal of the interview is to elicit information in a non-coercive manner. My personal preference is always to conduct interviews face to face because I can control the subject and the environment, and evaluate the nonverbal behavior of the interviewee.  But, if performing a face-to-face interview is not possible, I suggest using video over the telephone.This writing provides some suggestions for techniques to consider when conducting internal investigations remotely.

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Fraud Pentagon - Enhancements to the Three Conditions Under Which Fraud May Occur
Board of Directors, Fraud, Fraud Investigations, Fraud Pentagon, Fraud Risk Management, Fraud Triangle Jonathan T. Marks Board of Directors, Fraud, Fraud Investigations, Fraud Pentagon, Fraud Risk Management, Fraud Triangle Jonathan T. Marks

Fraud Pentagon - Enhancements to the Three Conditions Under Which Fraud May Occur

Today’s fraudster is clever and operates in an environment ripe for criminal activity. Economic unrest is making it easier for employees to find ways to set fraud in motion – and a new breed of offenders is finding cunning ways to do so. After more than 60 years, the classic fraud triangle of three elements or events that motivate an employee to cross the line has morphed into the Fraud Pentagon. Company boards and senior management must take an offensive stance against the five conditions that precipitate fraud with a clear plan that limits the opportunity for fraud and minimizes the impact when fraud does occur.

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