Social Media: A Powerful Tool in Economic Fraud Investigations
An employee claims that he has not taken a vacation in five years and wants to be paid for the unused time. Human resources records seem to support that claim — but a quick check of his Facebook profile shows that he spent a week in the Caribbean last winter when he claimed to be out sick.
A competitor releases a product that is virtually identical to one that you’ve been planning for months under absolute secrecy. An investigation reveals that a lead designer of the product has shared cryptic tweets with the competitor’s CEO.
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Your administrative assistant, who makes $30,000 per year, has an Instagram feed full of photos of her holding designer purses, driving a luxury car and receiving expensive spa treatments — and she makes an unusual number of requests for petty cash.
Most adults realize that what they post on social media can be seen by their followers, and depending on their privacy settings, anyone with a computer or smartphone. However, while they might be smart enough not to post inappropriate photos or offensive material, they might make posts that could land them in hot water with fraud investigators representing their employers, credit bureaus, lawyers and law enforcement. Social media investigation is now an important part of managing suspected economic fraud, and both new and experienced investigators are taking time to learn how to use this powerful investigative tool.
Hiding in Plain Sight
In 2012, the FBI made headlines when it revealed that several dozen financial professionals had been arrested due to leads discovered on social media. By communicating via social media under aliases, the criminals were engaging in insider trading and other illegal activities. The investigation, which remains ongoing, relies on the fact that Twitter is an exceptionally accurate predictor of market fluctuations — and financial services professionals regularly use the site to gain an edge in their dealings.
Investigators note that sites like Twitter are powerful tools because in many cases people are willing to share information online that they don’t share with others, and often believe that they will never be caught because the information is private. For example, most people probably aren’t willing to tell their boss they lost several thousand dollars at the craps table in Las Vegas, but they will share their misfortune with their friends on Facebook. While such a loss might not mean much if the employee has no other issues at work, if there are anomalies in the employee’s accounting or other problems, the posts regarding gambling debt can serve as evidence when building a fraud case.
Detecting Fraud, One Post at a Time
Investigators aren’t just using social media to detect theft or unethical activities within organizations — they are using it to help banks, state agencies and credit bureaus determine when people are lying about their finances. For example, a human services agency might use social media to corroborate or disprove information on an application for housing assistance. Using evidence from a site such as LinkedIn, the agency can determine whether an applicant is telling the truth about his or her employment situation, their resources or their education.
Personal injury investigators are also relying on social media for evidence in cases. For example, someone claiming a back injury who posts photos of themselves at an amusement park — or even just doing strenuous work around the house — might find their claim thrown out or have their case settled for a lower amount. As investigators point out, it’s human nature for people to brag about their interests — both legal and illegal — making social media a gold mine for evidence and information.
A Word of Warning
One point that all investigators are quick to point out is that social media posts aren’t always the online equivalent of a smoking gun. In other words, there’s not always a correlation between posts and illegal activity. Your assistant with the designer purses, for example, might be renting them or might have received them as gifts from a family member and the petty cash requests might be quite legitimate. Investigators caution against using social media for “fishing expedition,” and advise to use it as a tool only when there is suspected fraud. In other words, it’s fine to check an employee’s friends list to ensure that he or she is not engaging in activities that could be considered a conflict of interest, but it’s not okay to launch an investigation based simply on an employee’s photos of a new car.
The importance of social media will only increase as investigations become more complex and as more and more of an individual’s personal information is posted online. It may not replace traditional methods of investigation, but it will certainly become easier to protect assets and get answers when questions arise.