Q: At StoneTurn, you advise multinational organizations on establishing and maintaining effective anti-corruption programs. What practical advice can you give?
Antifraud programs are more important and necessary for multinational organizations than ever before, as fraudsters become more technologically savvy and misconduct spans the global economy. Hot topics include emerging cryptocurrencies, Foreign Corrupt Practices Act (FCPA) violations, credit card fraud coupled with identity theft, cybersecurity and data breaches, and the “old mainstays” such as money laundering and insider trading.
Risk can be mitigated by designing holistic anti-corruption compliance programs with effective internal controls and real-time transaction monitoring through increased automation. As more concise regulations and private/public sharing become available, training and communication around antifraud measures is key.
Q: Recently, the Department of Justice issued new guidance in an internal memo titled “Evaluating a Business Organization’s Inability to Pay a Criminal Fine or Criminal Monetary Penalty.” How can accounting experts play a role in supporting prosecutors and criminal defense attorneys under this framework?
Even before this latest DOJ guidance, businesses and their counsel were well-served by working with outside experts to evaluate how they review and present financial statements at any stage of a government inquiry. The memo provides a clear opportunity for organizations to reevaluate their approach.
Third parties can be extremely helpful in gathering and presenting objective data on how various penalty scenarios will impact the business and its “ability” to pay. Further, outside forensic accountants and compliance experts who work collaboratively to assess business damages can offer insights on how to avoid separate discussions among various federal, industry and local regulatory parties that may have an interest in an enforcement action in favor of a global settlement discussion. This holistic approach is not only the best use of regulators’ time and resources, but may also minimize financial impact on the business and its stakeholders.
Q: While with the IRS, you focused heavily on rooting out political corruption and accounting fraud. Can you tell us about one of your most interesting cases?
Over the last 30-something years, I have had my share of interesting experiences. I have worked on rooting out a variety of corruption, including political, organized crime, terrorism, drug and run of the mill tax fraud cases. An exciting moment came, during my testimony in the trial of a governor, when after much evidence about “wads of cash” that he was seen with around town, I showed the jury that after searching every legitimate potential source of cash, I could only find $77 generated. For the whole year.
Consistent with the adage that ‘the pen is mightier than the sword’, a notorious drug lord who was a ruthlessly violent man told me he was afraid of me! The most creative bribery scheme I’ve seen was during an investigation in which a developer staged a hole in one contest win at a charity golf event for a local Mayor to influence a zoning change.