Mr. Cook, a director with the asset recovery firm, and Mr. Cordes, a senior analyst, conduct fraud investigations and support litigation efforts.
Mr. Cook: It’s an asset recovery firm and a fraud investigation firm, and insolvency is a part of asset recovery. If you look at forensic accounting as your definition, insolvency is part of forensic accounting, as is forensic technology, which is what Sean does. Anything to do with forensics is for the courts. That’s the definition of forensics. As a forensic accountant, you’re providing information maybe as an expert that’s going to go into court, or it might mean just assisting the lawyers in understanding the numbers but it’s in a manner that’s potentially going to come to the court so you’ve got an extra level of sophistication there.
KRyS Global’s practice is largely focused on post-fraud recovery. Where do your roles fit in to that?
Mr. Cook: My role is as a forensic accountant. I’d worked in corporate finance, and corporate finance is around risk and valuations and understanding businesses and transactions. And I moved into forensic accounting, which is using some of the corporate finance skills and some of the accounting skills to understand disputes. It might be asset tracing: going through books and records and trying to find where the money’s gone. It might be that an employee has come in and stolen information from the business that’s caused damage to the business, and they’ve set up in competition. We’re pursuing those employees for a loss of profit, and we get evidence to show that information was stolen: That’s where Sean would come in, take an image of the computer; find deleted e-mails; find deleted documents; try and trace it to another IP address or show e-mails going out to a competitor. That would form the factual evidence. When there’s sufficient factual evidence, then it would come to me and I would give opinion evidence: “Based on my findings, I think it’s worth a quantum of this.”
So your role is to use technology to gather evidence?
Mr. Cordes: At the first level, yes. And then it comes time to review everything that we’ve collected: It could be documents, e-mails, you name it. We have cases going on now where we have literally a million documents that have been uploaded to a system where the lawyers, the accountants, can review them. They’re mostly not relevant. Out of a million documents, most aren’t. So the first step is to go through and whittle them down and see what’s really important.
You don’t have to actually look at a million documents yourself?
Mr. Cordes: No: We use technology to assist that process. For example, e-mail threading. You might have an e-mail chain that is 20 or 30 e-mails long, and instead of having to sit down and read 30 e-mails, our tools can identify these are all part of the same thread. Once you say, “Yeah, this e-mail is relevant,” it marks them all relevant. The technology goes a long way to cutting it down to what’s important.
Could you give an example of the types of fraud allegations you’ve investigated?
Mr. Cordes: A small business came to us and said, “I think my employees are stealing from me.” And he was kind of emotional about it because these were people he’d worked closely with. He’d had this pretty substantial wire transfer go out overnight to Hong Kong. So we took forensic images of all of the employees’ computers, did our whole analysis, and didn’t find any evidence of wrongdoing. We turned to his computer and what we found was viruses, malware and all kinds of infections. And among them was a keylogger that someone had installed to get the credentials for his banking.
Interview conducted, condensed and edited by Jason Smith.
{fcomment}