CONVERSION INVESTIGATION METHODS

Chapter 9

CONVERSION INVESTIGATION METHODS
Discussion Questions

1. Most investigations of conversion involve searching public records and other sources to trace purchases of assets, payments of liabilities, and changes in lifestyle and net worth.

2. When people enter into financial transactions, such as buying assets, they leave tracks or “financial footprints.” Trained investigators who know how to follow, study, and interpret these tracks often find valuable evidence that supports allegations of fraud.

3. Understanding how perpetrators convert and spend their stolen funds is important for two reasons: first, to determine the extent of the embezzlement, and second, to gather evidence that can be used in admission-seeking interviews to obtain a confession.

4. Public sources include many federal, state, and local agencies that maintain public records in accordance with various laws. These records include such databases as driver’s license records, marriage records, property tax records, etc. Private sources are comprised of non-governmental records and include gas, electric, water, and other utility records, bank and brokerage records, and other financial institution records. Private sources include all sources other than federal, state, and local agencies.

5. State, federal, and local public records contain valuable information that is extremely helpful in fraud investigations. Local courts maintain records on past law violators, employment history, personal and physical information, and prior charges. Federal sources, such as FBI records, contain large databases that can be accessed by local law enforcement agencies. State records, such as those of the Secretary of State, contain valuable information, such as UCC filings.

6. The Internet includes many databases, public and private, that can be accessed. By accessing information such as how individuals have spent their money (e.g. purchased boats, real estate, automobiles, etc.), investigators can determine the approximate amounts an individual has spent and the amount of assets he or she has. This information is helpful both to determine a person’s net worth and also to compare the spending with known sources of income to make a net worth calculation of a possible perpetrator.

7. Net worth calculations are valuable because only assets and reductions in liabilities that can be discovered enter into the calculation. Net worth calculations tend to give a conservative estimate of stolen funds. Because these calculations are conservative, the stolen amounts are usually readily accepted as evidence by courts. Additionally, they often facilitate investigations in the obtaining of confessions from suspects.

8. Some of the more advanced techniques available when searching for information on Google include searching by phrase, minus search terms, domain restrictions, Google Groups, cached results, and Google News.

9. Because the Internet contains so much information, it is often difficult to conduct effective searches. The advanced techniques help researchers conduct effective searches by allowing them to search entire phrases, to narrow searches and avoid words not associated with the search, and to get cached results as well as search news events.

10. There are four types of information sources available to investigators searching public records. They are government sources, private records, online databases, and Internet searches.

11. The Gramm-Leach-Bliley Act, passed in 1999, prohibits the use of false pretenses to access the personal information of others. It also allows financial institutions to sell customer information unless customers have opted out. This act is both restrictive and helpful to investigations. While preventing false pretenses, it allows the investigator to get information from financial institutions in more accepted ways. This is especially useful since most customers do not opt out.

12. Trash investigation is the discovery of information by looking through a person’s trash. This can be useful since many perpetrators do not shred documents. In addition, software can put shredded documents back together, and many documents are still kept electronically on the computers where they were created.

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