Bringing Freud to Fraud: It’s More Than Greed!
Co-Sponsored by the National Association of Certified Valuators and Analysts® (NACVA®)
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Program Description
Conventional wisdom holds that people commit valuation and other fraud purely for financial gain (a.k.a. greed). But an emerging field of study—“behavioral forensics” (Ramamoorti et al., 2013)—reveals that fraud perpetrator motivations are complex, and may be rooted in emotional and psychological reasons as well. This four-day series of virtual sessions explores the psychology of fraudsters, operating individually and as part of colluding teams (ABC = apple, bushel, crop), the psychology of their enablers and their victims, and whistleblowers. The sessions will feature case studies, typologies (sharks, marks, and larks), and how behavioral forensics perspectives and insights can be incorporated into the fraud life cycle (Hartman, 2019), comprising fraud prevention, detection, investigation (including interviewing), fraud mitigation, and remediation strategies.
How You Will Benefit
After completing this course, attendees will be able to:
- Identify the human factor in fraud and cite at least three motivators for fraud beyond greed
- Apply the lens of behavioral forensics to appreciate not just the how but the why of fraud
- Employ a behavioral forensics perspective to the fraud triangle of opportunity, pressure/incentive, and rationalization
- Recognize how fraud contexts might differ involving a perpetrator acting in solo, as part of a colluding team, or enmeshed in a toxic culture or criminogenic organization
- Distinguish between sharks, marks, and larks in evaluating a potential fraud situation
- Develop a method to investigative approaches such as interviewing
Day 1:
The A.B.C.s of Fraud and Psychological Materiality
Framing the general challenges of how to understand the human being in the context of fraud, the presenters, Dr. Sri Ramamoorti, a professor of accounting and former corporate governance partner at Grant Thornton, and Dr. Daven Morrison, a Clinical Professor of Organizational Psychiatry at Chicago Medical School will outline the fundamentals financial professionals need to know. Starting with the basic formula of the behavior of fraud and providing an overview of the psychology of fraud, the case will be made for attending not only to the financial materiality of fraud to organizations but the psychological materiality as well.
After completing this session, attendees will be able to:
- Recall the formula for fraud behavior in the context of human behavior
- Recognize the four roles humans play in fraud
- Define and distinguish psychological materiality from financial materiality
- Identify how to deepen the appreciation of the types of frauds as determined by the A.B.C.s
Fraud Life Cycle: A Former FBI Agent Tells All
The presenter is a former FBI Agent, attorney, CPA, author, and speaker. Vic Hartman has developed an integrated framework for understanding fraud from prevention through resolution in a civil or criminal trial. Vic addresses the mindset of the fraudster and how their motivations vary depending on the type of fraud being committed. This understanding is then juxtaposed on the Fraud Life Cycle: (1) prevention, (2) detection, (3) investigation, (4) mitigation, and (5) remediation. Real life case examples are used to make this an exciting session.
The presenter is a former FBI Agent, attorney, CPA, author, and speaker. Vic Hartman has developed an integrated framework for understanding fraud from prevention through resolution in a civil or criminal trial. Vic addresses the mindset of the fraudster and how their motivations vary depending on the type of fraud being committed. This understanding is then juxtaposed on the Fraud Life Cycle: (1) prevention, (2) detection, (3) investigation, (4) mitigation, and (5) remediation. Real life case examples are used to make this an exciting session.
After completing this session, attendees will be able to:
- Describe the motivations of fraudsters
- Explain why the fraud triangle has limitations
- Recognize the current fraud threat picture
- Illustrate prevention, detection, and investigative strategies
- Identify whistleblower motivations
Day 2:
Theranos: The Sharks, The Marks, and The Larks
The $9 Billion Dollar Fraud in valuation of Elizabeth Holmes and her partner, Sunny Balwani, in the Theranos blood testing scandal provides a fertile case for exploration and application of the models from Day 1. The A.B.C.s of the psychology of fraud, the fraud life cycle, the psychological materiality, etc. are explored for understanding and deepening applications of the theory. Most importantly, describing the key actors in the “ecology of fraud” who play important roles in fraud such as the perpetrators (sharks), the victims (marks), and whistleblowers (larks) are brought into focus.
After completing this session, attendees will be able to:
- Recall the formula for fraud behavior in the context of human behavior
- Explain behavioral forensics applications for the role of perpetrators (sharks), victims (marks), whistleblowers (larks) and more
- Identify the relevance of the “ecology of fraud”
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Conduct and stage for the need for interviewing skills
Materiality: Financial and Psychological—Crossing Legal Materiality
Financial materiality, refers to the magnitude of an amount significant enough to influence an economic decision. It is generally a well-understood concept in the education of financial and business professionals. In insurance and control operations it is also used as a threshold for managerial and executive accountability. As with accounting and financial materiality, in the world of human behavior, there are similar thresholds in which information becomes material psychologically. This session will explore how materiality works in human behavior within valuations in particular, and will also explore the role psychological materiality has in fraud prevention and investigation.
After completing this session, attendees will be able to:
- Define psychological materiality
- Identify and distinguish the role of psychological materiality from financial materiality
- Recognize simple examples of psychological materiality as it relates to the unique narrative and the shared sensory perceptions of a human being
- Recall the formula for fraud behavior in the context of human behavior
- Prepare a stage for the role of psychological materiality in interviewing
Beyond Sharks, Marks, and Larks: Blind Spots of Investigations
Fraud investigations encounter four key players in the case, each of whom has its own psychological profile. This session will describe the four key players and will familiarize attendees with common evasive tactics they use. Often, investigators miss some of those tactics because of blind spots that may be missed unless they are alert for them in self-awareness. This session is intended to begin developing that self-awareness.
After completing this session, attendees will be able to:
- Define four key players that are encountered in fraud investigations
- List common evasive tactics used by those being interviewed in fraud investigations
- Describe at least two blind spots that interfere with successful fraud investigations
Day 3:
Interviewing Occupational Fraudsters: A Behavioral Forensic Approach
The session provides insights to conducting admission seeking interviews of “occupational fraudsters.” Interviewing techniques can vary depending on the type of fraud being investigated. This session focuses on the most common type of occupational fraud: misappropriation of asset, corruption, and financial statement fraud. The session also explains how these types of frauds differ from predatory fraudsters. An interviewer can assess a suspected fraudster’s rationalization based on the fraud involved. Once armed with this knowledge, the interviewer can develop rapport with the suspect and has a greater chance of obtaining cooperation and a confession.
The session provides insights to conducting admission seeking interviews of “occupational fraudsters.” Interviewing techniques can vary depending on the type of fraud being investigated. This session focuses on the most common type of occupational fraud: misappropriation of asset, corruption, and financial statement fraud. The session also explains how these types of frauds differ from predatory fraudsters. An interviewer can assess a suspected fraudster’s rationalization based on the fraud involved. Once armed with this knowledge, the interviewer can develop rapport with the suspect and has a greater chance of obtaining cooperation and a confession.
After completing this session, attendees will be able to:
- Identify the difference between occupational and nonoccupational fraudsters
- Describle a predatory fraudster
- List the type of occupational frauds
- Compare the difference between interview and interrogation
- Explain the “fraud triangle’s” relevance to admission seeking interviews
- Express why rationalization is the key to gaining cooperation and obtaining a confession
Interviewing Fraudster Sharks
The relative incidence of true psychopaths is generally considered to be rare. However, when there is a crime the likelihood increases greatly and fraud is a crime. An experienced Senior FBI Agent and Founding Member of the ACFE joins forces with a psychiatrist to explore how to know when one is dealing with a psychopath, and what can be done to mitigate harm and risk.
After completing this session, attendees will be able to:
- Explain the relationship between psychology and power
- Identify the signals of psychopathy and strategies to mitigate the risks involved
- Describe the need to prepare for dealing with psychopaths and the process for doing so
Day 4:
Cybercrime: The Current State of Material Cybercrime
Drawing from over 17 years of cyber criminal and cyber national security investigations that have spanned the globe, this session will highlight lessons learned and best practices attendees can consider for themselves, their companies, agencies, or schools to help mitigate threats in their environments. This session will also discuss how these best practices can be applied to cyber threats such as ransomware, supply chain attacks, extortion, and Business Email Compromise (BEC) in the year 2021 and beyond. Moreover, this session will touch on cyber criminal and cyber nation state actors who are responsible for cyber attacks, giving attendees further insights on what to protect both in the real world and online. Finally, the session will offer insights on working with law enforcement, and the importance of proactively establishing relationships.
After completing this session, attendees will be able to:
- Describe best practices to help mitigate cyber attacks
- Reproduce best practices to reduce the likelihood of becoming a victim of cyber crime
- Identify current cyber threats
- Summarize law enforcement’s role in cyber matters
A Story of Fraud by Impulse
This session utilizes the elements of surprise and intrigue to capture the audience's attention. The session deals with a real-life business choice that brought two professionals together during a crisis and yet again many years later. Both speakers are attorneys and experts on fraud and ethics. A session you will never forget!
After completing this session, attendees will be able to:
- Recognize ethical dilemmas
- Describe causes of the savings and loan crisis
- Recognize the components of a government investigation
- Summarize the human rationalization process
This course is designed for professionals that deal with any facet of fraud. The primary audience is CPAs, auditors, investigators, attorneys, and government officials.
To register, click the "Register Online" button for our online event registration. Contact Member/Client Services at (800) 677-2009 for questions or registration assistance.
| Virtual Training Schedule | |||||
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Early Registration Discounts and Deadlines 10% |
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| Pricing |
Non-Member |
Member |
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Five-Day Virtual Course (10 Hrs CPE) |
$830 |
$747 |
CPE Hours
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For NASBA sponsorship information, including refund, complaint, and/or program cancelation policies, please click here.
