We’ve already explored the interesting rise in demand for private investigators to keep an eye on remote workerswhen employers fear that they may not be fulfilling their duties from home as required. While that has created interesting business opportunities in 2020, there is another trend on the rise that could provide a different sort of business demand for PI services – this time related to corporate fraud investigations. Here’s why the ongoing COVID sage is creating more need for corporate investigations, and how your firm could benefit.
COVID Assistance and Fraud
Business-related misconduct is expected to be a key issue for regulatory bodies throughout 2021. There are several reasons for this, which can be broken down like this:
- A large amount of money has been channeled to businesses via PPP, the CARES Act, and similar legislation designed to help companies survive challenging conditions due to COVID-19.
- Oversight for these funds and similar state/local funds has been limited, which has created new opportunities for misconduct like fraudulently misrepresenting an organization and wrongfully seeking funds.
- Social distancing requirements and similar regulations have also made it more difficult for investigators to personally inspect and ensure compliance with any existing regulations
- Currently, the SEC and DOJ are asking companies to self-report compliance issues (which often leads to whistleblowing) or any difficulties conducting internal investigations. This is in addition to more long-term plans to provide ongoing enforcement of penalties related to the CARES Act.
- Understanding and investigating these issues can take time, which is why misconduct that occurred in 2020 (or with the newer late 2020 legislation) can take years to thoroughly investigate.
We have previously discussed how larger companies may be particularly interested in hiring third-party investigators that can conduct independent investigations. This helps ensure transparency and keeps the investigation away from any potential conflicts of interest within a corporation, especially when a particular action (like a CARES application) or person is being investigated. But these businesses, and any government agencies looking for third-party assistance, will be looking for specific skills in the investigators they hire.
High-Demand Skills and Locations
So, what are the skills that organizations will be looking for to deal with these new issues? Important experience will include:
- Forensic accounting: This is a big one – the third party investigators that companies will be interested in hiring need to have experience in searching books for misrepresentation, faked numbers, contradictions, and other signs of fraud. Experience with financial investigations will often be a key skill for these jobs.
- Interviewing employees: Even if organizations already have some evidence that fraud may have taken place, they will still need additional investigations to narrow down how that misconduct was done, and which employees were directly responsible. Few companies have the resources to conduct these interviews and research in-house, so they look for additional investigators.
- Recovering lost data and cybercrime: This type of financial fraud frequently involves deleted messages or tracking down specific online communication. An investigator with data recovery skills will be well-positioned to help out when corporations – or government agencies – need them to follow a digital trail.
- Due diligence when making an acquisition: Companies will want to be certain they are not taking on any additional risk of being accused of COVID-related misconduct when acquiring a business.
- Experience with putting together a complete, official report: Business will expect a full account with all relevant details and evidence included. Investigators that have put together similar reports for lawyers or other entities will be ready to summarize their findings in expected ways.
Additional Related Investigations
We mentioned above that COVID-19 has also put certain physical limitations on what official investigators can do, especially when trying to manage investigations from a distance.
In practical terms, that means that if an agency or out-of-town investigator wants to take a closer look at a business, they are more likely to hire a local PI that knows and follows social distancing rules and understands what to look for. That could mean warehouses that are in operation even though they are reported as closed, or employees working when they should have been laid off, and so on. In these circumstances, being able to get out for real-world surveillance can be an asset, one that these particular fraud cases may be looking for.
This is also true of all past compliance requirements, as other cases may be focusing on organizations that have stopped following regulations in the chaos that COVID has brought to some industries.
Final Note on Taking Advantage of Business Investigations
As always, experience is key when advertising for and taking on new investigation jobs. Always try to highlight any past corporate and accounting experience that your firm has. Showcase similar fraud investigations and how you have been able to help clients in the past, especially when it comes to sensitive issues that require discretion and thorough documentation.
Also remember that traditional testimonials and proof of professional credentials are important here. Make it clear your firm is insured and licensed in your state.