ACFE, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Compliance, Compliance Coordinator, Corporate Fraud, Crisis, Crisis Management, Directors, Dodd Frank, Dodd-Frank, DOJ, Ethics, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Risk Management, Governance, Internal Audit, Internal Controls, Investigations, Money Laundering, Risk, Risk Management, Root Cause, SEC, Tone from the Top, Triage, Whistleblower, White Collar Crime Jonathan T. Marks ACFE, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Compliance, Compliance Coordinator, Corporate Fraud, Crisis, Crisis Management, Directors, Dodd Frank, Dodd-Frank, DOJ, Ethics, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Risk Management, Governance, Internal Audit, Internal Controls, Investigations, Money Laundering, Risk, Risk Management, Root Cause, SEC, Tone from the Top, Triage, Whistleblower, White Collar Crime Jonathan T. Marks

Whistleblowers: Tipsters not trusting the system?

Whistleblowers: Tipsters not trusting the system? Here's how to win them back.Anonymous hotlines and tip-reporting structures are useless, of course, if informants don’t trust them. Employees won’t blow the whistle if they fear reprisals. So, their concerns often don’t enter case-management systems and frauds continue. Here’s how to earn back their trust, take them seriously and transform raw tips into valuable fraud examinations.Ovem lupo commitere!

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ACFE, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Compliance, Crisis, Crisis Management, Dodd Frank, Dodd-Frank, Ethics, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Risk Management, General Counsel, Governance, Hotline, IIA, Internal Audit, Internal Controls, Investigations, NAVEX, Regulatory, Risk, Risk Assessment, Risk Management, SEC, Training, Triage, Whistleblower, White Collar Crime Jonathan T. Marks ACFE, Audit Committee, Board of Directors, Chief Audit Executive, Chief Compliance Officer, Compliance, Crisis, Crisis Management, Dodd Frank, Dodd-Frank, Ethics, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Risk Management, General Counsel, Governance, Hotline, IIA, Internal Audit, Internal Controls, Investigations, NAVEX, Regulatory, Risk, Risk Assessment, Risk Management, SEC, Training, Triage, Whistleblower, White Collar Crime Jonathan T. Marks

Whistleblowers: A Fraud Triage System to Manage Burgeoning Caseloads

As the use of whistleblower programs continues to grow, many organizations find themselves struggling to manage burgeoning caseloads. As a result, serious fraud investigations can be delayed (with mounting losses) while less consequential complaints are being investigated. The lack of a timely, systematic, and repeatable process for evaluating and prioritizing whistleblower tips that contain allegations of ethical breaches can also expose an organization to increased regulatory risk. While there is no single “right” method for following up on whistleblower complaints, the most effective approaches often resemble the medical triage programs that hospitals and first responders use to allocate limited resources during emergencies or a crisis situations. Here are some useful guidelines for designing and implementing a fraud triage system.

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Board Overconfidence: An Often Unrecognized Risk

Directors on corporate boards are – almost by definition – men and women who are accomplished and successful. So it is only natural that most board members also are highly self-assured and confident in their judgment and abilities.When that self-confidence is misplaced or overstated, however, the consequences can be costly. This is particularly true when overconfidence causes board members to underestimate or overlook the risks associated with fraud or management incompetence. Moreover, when board overconfidence is compounded by management overconfidence, the risks can multiply quickly.Once the dangers of overconfidence are understood and appreciated, board and management teams alike can begin taking proactive steps to mitigate the risks. Knowing the warning signs of board overconfidence is an essential first step.

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Audit Committee, Baker Tilly, Board of Directors, Bribery, Caremark, Chief Compliance Officer, Compliance, Compliance Coordinator, Corporate Fraud, Directors, Fraud and Forensic Inv..., Fraud Risk Management, Governance, GRC, Regulatory, Risk Jonathan T. Marks Audit Committee, Baker Tilly, Board of Directors, Bribery, Caremark, Chief Compliance Officer, Compliance, Compliance Coordinator, Corporate Fraud, Directors, Fraud and Forensic Inv..., Fraud Risk Management, Governance, GRC, Regulatory, Risk Jonathan T. Marks

The Role of the Board of Directors in Compliance Oversight

Under the U.S. Federal Sentencing Guidelines, in order to receive credit for having an effective compliance program, and thereby reduce the fines imposed on the organization, a Board of Directors must be “knowledgeable about the content and operation of the compliance and ethics program,” and must “exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.” In addition, in criminal actions against a business organization, including the FCPA, the DOJ’s Justice Manual instructs prosecutors to ask and answer several questions, including: 1) Do the Directors exercise independent review of the company’s compliance program? and 2) Are Directors provided timely and accurate information sufficient to enable the exercise of independent judgment?

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Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, Directors, Fraud and Forensic Inv..., General Counsel, Legal, Regulatory Jonathan T. Marks Audit Committee, Board of Directors, Chief Compliance Officer, Compliance, Directors, Fraud and Forensic Inv..., General Counsel, Legal, Regulatory Jonathan T. Marks

The Compliance Shift - Now for Tomorrow!

Where is compliance headed in the 2020’s? Certainly, technological solutions will be a big part of the future of compliance programs and controls. Compliance is rapidly emerging and being viewed as a critical business process. Moving away from the days in which it was driven by legalese and where lawyers are responsible for crafting compliance policies and procedures.  These advances provide opportunity for innovation, and enable compliance to recede from being viewed as a cost center led by the “head of business denial”, to being viewed as value added function to the business. Simply put, a more effective compliance program contributes to more efficient business processes, which leads to greater profitability.

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Anti-fraud, Audit Committee, Baker Tilly, Bribery, Chief Audit Executive, Chief Compliance Officer, Coronavirus, Corporate Fraud, COVID -19, Crisis Management, Directors, Ethics, FCPA, Foreign Corrupt Practi..., Fraud, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, General Counsel, Governance, Hotline, IIA, Internal Audit, Investigations, Management Override, Phishing, Risk factors, Risk Management, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Baker Tilly, Bribery, Chief Audit Executive, Chief Compliance Officer, Coronavirus, Corporate Fraud, COVID -19, Crisis Management, Directors, Ethics, FCPA, Foreign Corrupt Practi..., Fraud, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, General Counsel, Governance, Hotline, IIA, Internal Audit, Investigations, Management Override, Phishing, Risk factors, Risk Management, White Collar Crime Jonathan T. Marks

Fraud, Compliance & Integrity Risk During a Crisis and a Downturn

As a crisis unfolds, like Coronavirus, and markets decline globally, fraudsters will be adapting and new risks will emerge and some risks will increase. Remember, white collar criminals adapt by profiling us, so they can exploit our weaknesses. That being said, companies need to develop a strategy that enables the deployment of appropriate tactics to manage these new or increasing risks.This writing explores some fraud, compliance, and integrity risks and is intended to provoke discussion.

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Crisis Management, Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., IIA Jonathan T. Marks Crisis Management, Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., IIA Jonathan T. Marks

Getting the Monkey off your Back - A Road Map that will help lead you in times of Crisis

Risks change! It's critical to continuously evaluate the situation, because new risks may emerge and risk previously identified may have a different velocity and rhus the speed of impact might change - some may slow and some may increase.

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ACFE, Anti-fraud, Corporate Fraud, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Internal Controls, Sarbanes-Oxley Jonathan T. Marks ACFE, Anti-fraud, Corporate Fraud, Fraud, Fraud and Forensic Inv..., Fraud Risk Management, Internal Controls, Sarbanes-Oxley Jonathan T. Marks

Take Your SOx Off

On March 12, 2020, the Securities & Exchange Commission adopted a controversial rule that exempts more categories of public companies from auditor attestation of management’s internal control over financial reporting required by Section 404(b) of the Sarbanes-Oxley Act of 2002, despite strong opposition by investor protection advocates.The rules are intended to benefit low revenue companies even if the funds raised in the public stock markets are not small, according to, Release No. 34-88365, Amendments to the Accelerated and Large Accelerated Filer Definitions. The amendments become effective 30 days after publication in the Federal Register, which normally occurs a few weeks after a rule is posted on the SEC’s website.

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Anti-fraud, Audit Committee, Baker Tilly, Board of Directors, Books and records, Bribery, Coronavirus, Corporate Fraud, COVID -19, Crisis Management, ERM, Financial reporting an..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Governance, GRC, Guidance, Internal Control Defic..., Internal Controls, MD&A, Process Improvement, Regulatory, Risk factors, SEC, Training, Triage Jonathan T. Marks Anti-fraud, Audit Committee, Baker Tilly, Board of Directors, Books and records, Bribery, Coronavirus, Corporate Fraud, COVID -19, Crisis Management, ERM, Financial reporting an..., Forensic Accounting, Fraud, Fraud and Forensic, Fraud and Forensic Inv..., Fraud Investigations, Governance, GRC, Guidance, Internal Control Defic..., Internal Controls, MD&A, Process Improvement, Regulatory, Risk factors, SEC, Training, Triage Jonathan T. Marks

COVID-19 - Coronavirus: Crisis Management, Business Continuity, Fraud, and More!

Crisis Management: Some of the biggest mistakes made when handling a crisis are not dealing with the problem head-on, thoughtless or insincere comments, lack of communication with stakeholders, unprepared spokespeople, getting defensive after receiving backlash, or, sitting back and letting the problem grow. Domino’s, Sony, Samsung, BP, United Airlines, Equifax, KFC, are all good examples of companies who stumbled with crisis management. Companies should study these crises and learn from the mistakes!In addition, fraud, compliance, and integrity risks may change. A crisis situation can and often does increase the pressure on senior management and of course salespeople to meet their sales targets! Deviant behavior is easily justified.

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Blockchain, Cryptocurrency, Fraud, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Initial Coin Offering, SEC Jonathan T. Marks Blockchain, Cryptocurrency, Fraud, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Initial Coin Offering, SEC Jonathan T. Marks

Five Men Indicated for Worldwide Cryptocurrency Fraud Scheme

On December 10, 2019, three men were arrested in connection with an alleged $722 million cryptocurrency mining fraud scheme.  An additional defendant was arrested following the Department of Justice’s press release, and another remains at large.From April 2014 through December 2019, Defendants solicited investments in its BitClub Network, a purported bitcoin mining pool that was operated by Defendants.  They are charged with exploiting unsophisticated investors with “false promises of large returns for investing in the mining of Bitcoin.”  The “complex world of cryptocurrency” allowed Defendants to take advantage of investors, which Defendant Matthew Brent Goettsche referred to as “dumb” investors, “sheep,” and “morons.”  Defendants manipulated the daily mining earnings amounts reported to investors in order to attract new investors and to encourage reinvestment of earnings, amassing at least $722 million in ill-gotten gains.Read more to better understand how others exploit this perplexing concept, what the SEC has to say about the matter, and what the consequences are.

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Anti-fraud, Audit Committee, Board of Directors, Books and records, Bribery, Chief Audit Executive, Chief Compliance Officer, Collusion, Compliance Coordinator, Corporate Fraud, Ethics, FCPA, Foreign Corrupt Practi..., Forensic Accounting, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, GDPR, General Counsel, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Jonathan T- Marks, Red Flag, Risk, Risk Assessment, Risk Management, SEC, Skepticism, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Board of Directors, Books and records, Bribery, Chief Audit Executive, Chief Compliance Officer, Collusion, Compliance Coordinator, Corporate Fraud, Ethics, FCPA, Foreign Corrupt Practi..., Forensic Accounting, Fraud and Forensic Inv..., Fraud Investigations, Fraud Pentagon, Fraud Risk Management, GDPR, General Counsel, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Jonathan T- Marks, Red Flag, Risk, Risk Assessment, Risk Management, SEC, Skepticism, White Collar Crime Jonathan T. Marks

Bribery Schemes and Their Compliance Responses

This writing will highlight some of the more unusual bribery schemes described in 2019 Foreign Corrupt Practices Act (FCPA) enforcement actions and also consider their impact on compliance programs, what they mean for the compliance professional and how the government could potentially use these cases to require more effective compliance programs going forward.Fraudsters are always looking for loopholes and weak spots to exploit. The same is true for those engaged in bribery and corruption. The role of every compliance professional is to prevent, detect and remediate. By following some of the approaches I have outlined, you can move towards more robust detection.

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Anti-fraud, Audit Committee, Baker Tilly, Board of Directors, Books and records, Bribery, Chief Audit Executive, Chief Compliance Officer, Compliance, Control Environment, Corporate Fraud, Corruption, Culture, Directors, DOJ, Ethics, FCPA, Foreign Corrupt Practi..., Forensic Accounting, Fraud and Forensic Inv..., Fraud Investigations, Fraud Risk Management, General Counsel, Global, Governance, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Management Override, Policies and Procedures, Process Improvement, Red Flag, Risk, Risk Assessment, Risk Management, SEC, Tone from the Top, Training, White Collar Crime Jonathan T. Marks Anti-fraud, Audit Committee, Baker Tilly, Board of Directors, Books and records, Bribery, Chief Audit Executive, Chief Compliance Officer, Compliance, Control Environment, Corporate Fraud, Corruption, Culture, Directors, DOJ, Ethics, FCPA, Foreign Corrupt Practi..., Forensic Accounting, Fraud and Forensic Inv..., Fraud Investigations, Fraud Risk Management, General Counsel, Global, Governance, Internal Audit, Internal Control Defic..., Internal Controls, Investigations, Management Override, Policies and Procedures, Process Improvement, Red Flag, Risk, Risk Assessment, Risk Management, SEC, Tone from the Top, Training, White Collar Crime Jonathan T. Marks

Fraud Tip Friday: Lessons From Recent FCPA Enforcement Actions

The United States government’s fiscal year ended on September 30, 2019. Just as in the business world, where many companies try and clear out any unexecuted deals or open contracts, the Securities and Exchange Commission (SEC) cleared out three outstanding Foreign Corrupt Practices Act (FCPA) enforcement actions. The three enforcement actions involved Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, and its Peruvian subsidiary, Quad/Graphics Peru S.A.; Barclays PLC; and a Canadian clean fuel company Westport Fuels Systems, Inc. and its former Chief Executive Officer (CEO), Nancy Gougarty of Leesville, South Carolina. The terms of each settlement agreement provide a different lesson for compliance practitioners.

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Compliance, Corporate Fraud, DOJ, Enforcement, Foreign Corrupt Practi..., Fraud and Forensic Inv..., Fraud Investigations, GRC, Investigations, Red Flag, Risk Assessment, Risk Management, Root Cause, SEC, Third Party, Whistleblower, White Collar Crime Jonathan T. Marks Compliance, Corporate Fraud, DOJ, Enforcement, Foreign Corrupt Practi..., Fraud and Forensic Inv..., Fraud Investigations, GRC, Investigations, Red Flag, Risk Assessment, Risk Management, Root Cause, SEC, Third Party, Whistleblower, White Collar Crime Jonathan T. Marks

DOJ Updates FCPA Corporate Enforcement Policy

On November 20th, 2019, The Department of Justice ("DOJ") announced updates to its Foreign Corrupt Practices Act ("FCPA") Corporate Enforcement Policy. While the changes were relatively minor, the modifications underscored important principles surrounding the FCPA Corporate Enforcement Policy.  This latest update follows extensive revisions made in March of this year and the announcement that the FCPA Policy will apply as non-binding guidance for all criminal cases; all reflect DOJ’s continued efforts to promote self-disclosures and provide clarity on DOJ’s approach for companies deciding whether to self-disclose. There is little doubt the DOJ has landed on a Corporate Enforcement Policy that took years to develop. The FCPA Corporate Enforcement Policy now applies to all corporate criminal prosecutions except Antirust Division criminal prosecutions that are guided by the Leniency Program. The DOJ is consistently applying the principles and appears to be very comfortable with the results.

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Fraud, Fraud and Forensic Inv..., Nonprofit, Not for Profit Jonathan T. Marks Fraud, Fraud and Forensic Inv..., Nonprofit, Not for Profit Jonathan T. Marks

Some Organizations Are So Far Behind In The Race They Think They’re Leading!

According to the most recent global fraud study by the Association of Certified Fraud Examiners (ACFE), the typical organization loses an estimated 5 percent of its annual revenue to fraud. While fraud in nonprofit organizations resulted, on average, in a smaller net loss than fraud in commercial enterprises, the nonprofits in the study reported a median loss of $100,000 - a significant loss to any charitable organization!
Beyond the immediate financial loss, however, an even greater potential cost of fraud to nonprofit organizations is the reputational damage that can occur. Because most nonprofits depend on support from donors, grantors, or other public sources, their reputations are among their most valued assets. In addition, fraud in nonprofit settings often garners unrelenting negative media attention.

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