Investigation Techniques

HOW ARE WHITE-COLLAR and corporate crimes discovered? Compared to more traditional, or "street" crimes, the investigation of crimes in the business world is often more difficult and time consuming. This is due, at least in part, to the fact that white-collar and corporate crimes tend to be more complex, may involve multiple offenders and organizations, and may span many years duration before an investigation is performed. A primary difference between white-collar crimes and street crimes is that the latter may be committed with weapons of violence, such as firearms and knives, while the former can be committed with weapons that are not so obvious on the surface, such as through the use of computers, mail, and phone lines. All of these factors make the investigation of white-collar and corporate crimes a challenging endeavor.

Existing research and information on the investigation of white-collar and corporate crimes has generally focused on the broad category of fraud. Fraud may take several forms, and could be classified as either white-collar or corporate crime. Regardless of how fraud is categorized, criminologists and investigators agree that this all-purpose crime occurs most often in organizational settings. As a result, available guidelines and strategies for investigation of white-collar and corporate crimes are most applicable to organizations. Organizations can be victimized by fraud from within, or may also be the targets of scams from outside individuals, such as vendors.

First and foremost, a fraud investigation should have the approval of an organization's management. Much like investigations of street crimes, the goal of white-collar crime investigations is to reveal the truth. Before initiating a fraud investigation, there must be circumstances that suggest fraud has taken place, is taking place, or will take place. This standard is referred to as a "predication of fraud." Such a standard is important for a number of reasons. For example, since conducting an investigation can often be costly, investigators must be reasonably confident that evidence will lead to a guilty individual or individuals. Additionally, because a wrongfully accused individual can have his or reputation tarnished with a charge of fraud, investigators must also be confident that they can accurately identify the correct perpetrator or perpetrators.

[Page 443]Within organizations, investigation of fraud and other white-collar crimes may be performed internally or with the assistance of outside investigators. Exactly who performs the investigation will depend on a number of factors, such as the size and structure of an organization, and whether law enforcement actions are also required. While a variety of methods may be employed during the course of an investigation, one of the most common is the use of interviews. Regardless of who actually performs the investigation of white-collar crime, the methods used can be classified based on the type of evidence obtained.

Four general categories of evidence have been identified. The first of these, testimonial evidence, is collected from individuals that may be directly or indirectly involved in the offense. To obtain testimonial evidence, investigators can use techniques such as interviews, interrogation, and lie detector tests. A second form of evidence collected during the investigation of white-collar crime is documentary evidence. This type of evidence is taken from written and paper sources, but could also included electronic sources such as computers. The goal of obtaining documentary evidence is to link the perpetrator to the offense. To collect documentary evidence, investigators may locate public records, perform audits, analyze financial statements, or conduct computer and other electronic file searchers. Physical evidence, the third general category, commonly involves detailed analyses performed by forensic scientists. Much like the collection of physical evidence in street crimes, this type of evidence can include fingerprints, stolen property, or other factors that physically tie an individual or individuals to the offense. Finally, the fourth category of evidence, personal observation, consists of the gathering of information by the investigators. This general category can include such investigative methods as surveillance and other undercover operations. In addition to classifying a white-collar or corporate crime investigation according to the types of evidence sought, an alternative classification approach is to focus on one of the three known elements of fraud: theft, concealment, or conversion. All three elements of fraud can be investigated with strategies known as inquiry methods. The investigator often proceeds by making a determination of which type of evidence will provide the strongest case against the perpetrator. To investigate theft, the general approach used is simply an attempt to catch the perpetrator in the commission of the act. To investigate concealment, the focus of the investigator can include a variety of sources used to hide white-collar crime. To investigate the third element of fraud, conversion, investigators have the more difficult task of uncovering the ways in which a perpetrator may have spent or otherwise altered illegally obtained funds or information.

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