Episode 33: All Kinds of Workplace Fraud with Rick Mulvey, CPA
On this week's episode of The Investigation Game Podcast, Leah interviews Rick Mulvey, CPA, forensic accountant and owner of Olde Green Consulting in Albany, NY and New York City. Rick has been a CPA and corporate controller for over 30 years with experience in embezzlement investigations, business valuations, and litigation support. Rick is also the author of the book The Fraud Within: Workplace Fraud and Embezzlement: Face It, Find It, Fix It. We hope you'll listen in to Leah and Rick's conversation about all kinds of workplace fraud.
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Transcript of Episode 33: All Kinds of Workplace Fraud with Rick Mulvey, CPA
Leah Wietholter (00:00):
Hi, I'm Leah Wietholter, owner of Workman Forensics. And this is The Investigation Game Podcast.
Alycia (00:04):
Hey everyone, Alycia here with a super cool announcement. We want our listeners to be a part of the show by giving us their favorite fraud stories, but we won't be reading it for you. We want you on the show. So if you'd like to be a part, email your favorite story to assistant@workmanforensics.com and we'll work together and get you on the show.
Leah Wietholter (00:32):
Welcome to The Investigation Game Podcast. I'm your host, Leah Wietholter, founder and CEO of Workman Forensics in Tulsa, Oklahoma. Today I'm joined by Rick Mulvey, CPA, forensic accountant, and the owner of Old Green Consulting in Albany, New York, and New York City. Rick has been a CPA and corporate controller for over 30 years with experience in embezzlement investigations, business valuations, and litigation support. Rick is also the author of The Fraud Within: Workplace Fraud and Embezzlement Face It, Find It, Fix It. Rick, thanks so much for joining me today.
Rick Mulvey (01:04):
It's great to be with you, Leah. Thank you.
Leah Wietholter (01:06):
So for our interview today, I definitely want to jump into the topics of your newest book. But before we do that, I am always curious about how professionals entered the world of forensic accounting. So will you share your story with us?
Rick Mulvey (01:18):
You know, like a lot of forensic accountants, I think I took the path of the traditional accounting firm early in my career, public accounting. So traditional tax and accounting services. I worked for a couple of firms and worked for a regional firm in the Albany, New York, area, upstate New York. We had about 80 professionals in three offices, and occasionally I got to work on a little bit of a forensic matter, and I always found it pretty interesting. Firms didn't really have forensic departments at that time, and there wasn't a lot of training involved either. I mean, you're basically using your accounting skills. And I got involved in a couple of embezzlement things when I was younger and I was like shocked that people would steal from their employer. Like I'm so naive. I didn't believe this, that this went on, you know, but I always found that interesting. After I worked for that public accounting firm, I went to work as a controller for a construction company and I was there about 10 years, and I think that's how I developed an industry focus in construction.
Rick Mulvey (02:15):
And also I think it probably gave me a unique perspective with that. I've been on both sides of it. I can see from the business owners, the employees, you know, the private industry viewpoint, and as well as being an investigator from public accounting firms. So that's probably the path that a lot of accountants took. And a few years back, you know, my CPA practice, I had a few employees and we had 700 or 800 tax clients. We were doing traditional accounting work. You know, accounting got to, as I'm sure you're aware, accounting got to where any growth you wanted to achieve, if you didn't go into a specialized area like forensics or something else, any growth you wanted came right during the crush of tax season. And you know, there's a limit, how much of that can you do. Once that starts affecting your health, you start thinking, you know, I gotta go a different route. So unloaded most of the traditional accounting work and working in the forensic area and doing business valuations and also doing some consulting with a few companies too, hoping to just do work that I enjoy.
Leah Wietholter (03:16):
Yeah, that's wonderful. I definitely share the, although I wasn't, I mean, I was working in public accounting, but definitely the working on tax season and tax returns and also working forensic accounting cases at the same time. And you know, I think I was 24, 25 years old. And I just remember like this unbelievable amount of stress. And I thought, I don't think I can do this my entire life.
Rick Mulvey (03:43):
You don't want to do that the rest of your life? I get that. I did it much too long, but it's okay because with each of those crazy hard tax seasons and all the stress you go through, you learn so much, you really do, and you meet a lot of people.
Leah Wietholter (03:58):
Yeah, that's true. That is true. So with your extensive experience in this field, would you share with us the story of your favorite case you've ever worked?
Rick Mulvey (04:07):
Oh, favorite case boy, you know, I've listened to a lot of your episodes and you've had some really exciting cases on some of your episodes. Like I listened to Jason Zirkle's case last week. Yeah. thankfully none of my cases involved a murder. So that's a good thing. No, there was a case some years back, it was a typical small business embezzlement case and it was in the construction industry, a construction specialty. And it sticks out in my mind every time I think about embezzlement because of the classic fraud triangle elements that are in this case. And I'm, I'm always thinking of the fraud triangle. I'm, I'm thinking of this when I'm watching TV, which is kind of weird.
Rick Mulvey (04:52):
It was a classic small business. You've got a bookkeeper with loads of opportunity to steal money, no segregation of duties. She would print checks, sign checks, cash checks at the bank, record them in the accounting system, reconcile the bank account, no segregation of duties whatsoever. And that's classic in a small business. And it's something that a lot of business owners can't, they don't think they can work around it. And that's a classic. Ualso when you think about the motivations to get someone to embezzle, obviously I didn't work there day to day. I didn't know everybody's life situation, but what I heard from talking to the staff is that, so this bookkeeper, this is kind of classic too. This was early mid-2000s. Bookkeeper and her husband, bought a house. Home prices are high, mortgage credit was very easy back then. Ironically, they bought the house from her employer, which may have played into this whole story.
Rick Mulvey (05:52):
Shortly thereafter, the husband suffers a workplace injury, becomes disabled, or he's out on worker's compensation. So now we've got the stress, we've got the financial pressure, they've got to pay the bills. She's working as a bookkeeper and he's out of work, two young kids. So if I'm working there day to day, I'm probably at this point, I'm realizing they gotta be under some stress right there. There's a big motivating factor right there. So the motivation and opportunity were there in spades. So what happened just briefly, she had stolen money from a company in about five different methods. And when the client called us in, he had a hunch on one of the methods. And I don't know if you've seen this before, but in a company where employees are putting money into a 401k and there's deferrals and on a monthly basis, the company will cut the check for that withheld money and remit it to the investment company.
Rick Mulvey (06:48):
Also employees would borrow against their 401k, have money withheld from their payroll, and cut a check monthly to the investment company. So the owner had a hunch that some of these checks that were going out to the investment company were kind of large. Now mind you, she's signing all the checks and she's preparing all the reports. So he's not really getting a good look at this. And this, this is remarkable too. Ironically, the owner of this business who's in the construction industry had an accounting degree, and still there was such trust that there was very little oversight going on. So that was the first thing he called us in to look at. And sure enough, the bookkeeper would borrow amounts against the retirement plan, maybe $3,000, $4,000 at a time, start having $25 a week withheld from her pay. But at some point, just deciding to cut a check out of the company and repay the entire amount.
Rick Mulvey (07:44):
And this went on six or seven times over about three years. It amounted to a pretty substantial amount of money. So the other one that went on for at least four years was.. I asked the owner, I said, "What's the check to cash every single Monday?" And he said, "Well, it's petty cash. Um she writes a check, she goes to the bank, she gives me $300 and I spend it on meals, gas, whatever, lunches, supplies." And you know, he's the owner of business. He can spend it on whatever he wants to spend, right? And I asked him, I said, it's $300 a week. He said, yeah, 10 years now, $300 every week and I had to break the bad news to him that the checks were not $300.
Leah Wietholter (08:29):
Oh no.
Rick Mulvey (08:30):
Yeah. Yeah. The pattern went more like $300, $300, $500, $300, $700, $400. And you know, she was pocketing extra cash every single week.
Rick Mulvey (08:41):
So that resulted in a large Excel spreadsheet. So that was another way she was stealing money. There were a couple of other ways too. I just think from the opportunities that she was given and from the motivation, she probably had, it was a pretty classic case. Thinking back on this case now, the business owner went to his attorney and confronted the bookkeeper and said, okay, we know what you did. We've documented the whole thing. She played deny, deny, deny, which is actually lie, lie, lie. She said, I didn't steal your money. I don't know what you're talking about. So he said, look, I'm giving you a chance to pay full restitution and walk away. Now, knowing what I know now, I mean, I don't know what you would advise them. I would advise them to think twice about doing that because you don't let them walk away without prosecution.
Rick Mulvey (09:31):
And they're free to do this again and happens all the time. You see a lot of repeat embezzlement charges. So she continued to deny. So the case went to the grand jury in this county. And so I got in front of the grand jury and there are 25 jurors sitting in these seats. They're sitting there like at school desks and I'm sitting at a table at the lower level. And they're at these desks cascading up about five or six rows. And they're firing questions down at me and I'm not allowed to have counsel with me. So I'm kinda like fielding questions, like I'm the accused here. Like this..like why weren't, why wasn't the company auditing the books every year and typical questions like that. And we were trying to present some pretty complicated accounting matters to a grand jury, to lay people, and in any case they decided to indict.
Rick Mulvey (10:25):
And this carried on for awhile, we worked with the district attorney's office and with a consultant from the New York State Department of Financial Services. And they ended up charging her with a couple of charges based on a couple of methods she was stealing money through, and not everything. They didn't think they could prove everything. It's a little disappointing,..not a huge, I think it was probably in excess of $100,000.. They ended up charging with something like $80,000. All sides prepare for trial, just goes on and on. And finally, a plea arrangement struck. Didn't have to testify at trial, but my client gets $25,000 from his insurance policy, his crime policy, and the rest.. She was ordered to pay restitution on the rest of it. Now she's also on the hook for the other $25,000 to the insurance company, right? Like, yeah, it's still, it's still total less than what we feel she stole in total.
Rick Mulvey (11:21):
A couple other significant things about the case though. I think back on this now with more experience in the field, and in their offices on the wall there was a plaque with a picture of a little league baseball team that the company had sponsored. And the bookkeeper is in the picture. Her son was on the team and she was one of the coaches. We found out she was actually the treasurer of the little league in that town. So yeah. Yeah. So once this hit the newspapers, I'm sure they did a little audit on their own I'm thinking, but she got off with a remarkably light sentence. You've probably seen cases with a $100,000 embezzlement, two, three, five years in jail. Right?
Leah Wietholter (12:04):
I would say most of ours under that. They get like probation or..
Rick Mulvey (12:10):
Yeah, that's incredibly light. She got seven weekends in jail.
Leah Wietholter (12:14):
Oh wow.
Rick Mulvey (12:14):
Yeah, the business owner was not happy. He didn't think that was enough. But I'm sure the judge is thinking, number one, we have to keep her working to pay restitution. And number two, she has two young kids at home. So.. And the business owner was interviewed by the newspapers. The two things that really struck me are one, he thought it was very light sentence. He was disappointed, but number two, he was just devastated. And he said, "I don't know if I can never trust anyone again working for me." And some of these cases, you know..
Leah Wietholter (12:48):
That's tough. That is a creative sentence though, I think, by the judge, like you said that she would still have time to work, but then serve some time in jail on the weekends. That's pretty creative. I haven't seen that one.
Rick Mulvey (13:01):
I mean, she had been punished a lot too. This was published in the local papers and I'm sure well know about it, but she had obtained a new job even before this plea deal was, was arranged. So she was working. Pretty significant case for a lot of reasons, actually, even though it wasn't a huge case.
Leah Wietholter (13:16):
Yeah. But it had a lot of elements in the fact that she was fighting it and things like that. That always makes that so interesting.
Rick Mulvey (13:23):
Yeah. I don't know how often you see that, but I was really shocked that she was fighting it. We had quite a bit of evidence and you know, she wasn't going to win this one.
Leah Wietholter (13:33):
Yeah. We don't have a lot of people challenge our cases, but at the same time, I never promised that to a client either. You know, just because we haven't had many in the past doesn't mean we won't have many in the future. And I think some of that just personally, I think some of it is personality-based. Like who's the person stealing and how confident they are that they can win.
Leah Wietholter (13:53):
We'll be right back to this interview
Speaker 3 (14:00):
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Leah Wietholter (14:23):
Welcome back to the podcast. But you mentioned something in the earlier part of that case about the additional contributions to retirement plan. And we haven't really talked about that one, so I'm glad, I'm glad you had an example to share with us cause we haven't talked about that on the podcast and I haven't had anybody necessarily over-fund there ..maybe a couple overfund there, but not to that extent. But what I have seen is that in that similar situation where they're paying, you know, the employer is supposed to pay this lump sum into the retirement plan, they would instead steal that money. So I've seen it leave before. Yeah.
Rick Mulvey (15:03):
It's a little more creative in that using the borrowing and then start to make small payments back, but then have your employer pay back your loan.
Leah Wietholter (15:10):
Yeah. Well, and I mean, that's better on the employer's part because what we had in this one case when all of these employees' retirement funds weren't, you know, whenever they weren't paid in, I mean, there were quite a few penalties for the owner, you know, of the business, like the business. Yeah. So even though forensic accounting is a niche in itself, is there an area that you believe became a niche within a niche or specialty for you?
Rick Mulvey (15:38):
In terms of a niche of a certain area of forensic accounting? No, probably because I haven't been in it that long, but but aside from that, like I mentioned I have an industry specialization and that's become a focus on the construction industry. So I've worked in the industry and a lot of my public accounting clients were in the construction industry. So, you know, you develop a good understanding of the accounting and the, and the revenue cycle and what goes on within a company. I do think about whenever I've taken like forensic classes and CPE courses, or you read about cases, I only think of it in terms of construction. So that's the industry focus for me.
Leah Wietholter (16:20):
Yeah. And fraud within construction, I think is a niche within a niche. I've worked several construction cases and there's just so many different areas to look at, so. Okay. So I want to talk a little bit about some of the content of your book. So often when I'm doing trainings for small businesses, they just love to ask the question "Is fraud a problem with women or men?" I don't know why that is such a popular question, but then I saw in your book that you actually researched some of this. And so what did your research uncover?
Rick Mulvey (16:52):
There were some findings that I didn't expect and you know, there's the whole term out there, pink color fraud. And you know, you follow people on LinkedIn who, you know, use that terminology. And I know we all read each other's cases and post that stuff. What I found, and I think we, when we think of accounting and fraud, and we're thinking usually in terms of the United States and we maybe don't take a worldwide approach to it. But research indicated that worldwide 75% of fraud is perpetrated by men. And when you get in the United States and Canada, it's closer to 50/50. And you know, the reasons being in more developed nations like the United States and Canada and probably Europe, women have more work opportunities and even more managerial positions. When you get nations in Asia or in Africa, business is dominated by men, and the fraud is perpetrated by men and also the different types of fraud. So on a larger scale with bigger companies, when you're talking about corruption and financial statement fraud, and the big stuff that's usually perpetrated by men. Whereas the embezzlement from companies I say in the US is more than 50/50 women. They tend to be in the roles of bookkeeper, controller, accountant, and finance positions and, and even bankers and bank tellers and the occupations where most of the smaller fraud occurs.
Leah Wietholter (18:21):
Yeah. That makes sense. You also talked about in your book, a lot of behaviors of fraudsters, you know, from like a research perspective, but I am curious too, just in your practice. Of those behaviors that you discovered in your research, what do you think are kind of some of those top things that you've seen in the cases that you've worked in your experience?
Rick Mulvey (18:40):
Yeah. I know in the book I listed a lot of things. You know, lifestyle red flags and behavioral red flags as well. I think the main things that I've seen within businesses, the person who ends up committing the fraud is usually the person, you know, it's not universal, but in a lot of cases, it's usually the person who is complaining. They're not happy with their situation. They're the victim. And it leads right into the rationalization as to why they commit fraud. They're not happy with their situation at work. They could be the lowest paid person. Maybe they didn't get promoted. Maybe they didn't get the raise they thought they were going to get. You have to watch out for people who are complaining all the time. The other thing is they're probably going to exhibit a lot of stress. So if you think back to the financial pressures of the motivation as to why people steal, a lot of them are under financial pressures outside of work, and which they perceive as like Cressey said, non-shareable, you have a non-shareable problem as they perceive it and the only way out is they're going to steal. So someone under a lot of stress and someone complaining a lot, those are people to look out for. They could be under stress from their job. They could be under stress because they are committing a fraud, or they could just be under stress because of these outside factors in their lives. Let's say those are the two main areas to look out for.
Leah Wietholter (20:04):
Yeah. That's good. You know, one of my favorite things to tell small business managers is: the person stealing money is often your favorite, but no one else likes them. That's what I've seen in my experience. Yeah. Because management, I think sees that stress that you're talking about, like the way you described that management sees their stress as, "Oh, they're just such hard workers" and all of this, but they have to take their stress out somewhere and so often they have a lot of issues with coworkers. That's what I've seen. I've done no research on that. That's just based on..
Rick Mulvey (20:38):
That's a great concept. In terms of that case we were talking about earlier, obviously I wasn't working in that office to know what the rationalizations would be for that case. But you'd have to imagine if you're a bookkeeper in a construction company, you're the lowest paid person in the company. Absolutely. You know, so, Hey, I'm the lowest paid person, a company. Hey, I haven't had a raise for three years. Well, no one else had either. And I talked to employees who were pretty upset about that, but here's money being embezzled for four years and nobody's getting pay raises. But I was just thinking that those rationalizations would come out in the course of the workday. And obviously I didn't work there, but that's something to look out for when you're profiling somebody who's committing fraud.
Leah Wietholter (21:18):
Yeah. Yeah, for sure. In your experience and based on the cases you've worked, how long have fraud schemes occurred before being detected? I know the ACFE says 18 months, but I'm just curious, you know, that like that's the most common, that's the median life of a scheme or whatever.
Rick Mulvey (21:33):
Yeah. I read that too. 18 months seems to be a median point. Probably since I've worked on smaller cases, some of them have gone longer than that. Like the one I was talking about went on for four years because of relatively small amounts being stolen. It can carry on for years and years. I think one year to 18 months is typical. Obviously the longer it goes on, the more and more money is going to be stolen. I found in my research, not in, not in the work I've done, but in the research that some of the longest cases that go on are the ones in the public sector where there's little oversight and if you noted in the book, there was a couple of crazy cases. One involving the District of Columbia Office of Tax and Revenue. Went on for 20 years and the fraudster stole $48 million.
Leah Wietholter (22:20):
Crazy.
Rick Mulvey (22:22):
That was incredible. Her statement to the judge at the end was amazing that she said, you know, they still haven't cleaned up their control practices. And if you let me back in your office right now, I guarantee I can get each one of you, a check. Just didn't get that chance. But yeah, the public sector seems to, you know, the ones that carry on longer and longer, and we're all familiar with the Rita Cornwell case.
Leah Wietholter (22:45):
Yes.
Rick Mulvey (22:45):
And she was a municipal controller and that went on for over 20 years, stealing a couple million dollars a year. That's incredible, no oversight. And how that, how a woman acquires 400 horses while working as a controller. I don't know.
Leah Wietholter (23:00):
For a city.
Rick Mulvey (23:03):
For a really small city. That's right. She's stealing $2 million a year from a city that had a budget of $8 million.
Leah Wietholter (23:10):
Yeah. Goodness. It's pretty amazing. I will have to say, you know, so many people that I follow on LinkedIn, they share stories of embezzlement. I feel like at this point in my career, I kind of glance over the ones that are less than like a million dollars. You know, it's like, which is terrible because to the person that they stole from that is everything. But just when you've worked so many of these,
Rick Mulvey (23:34):
Yeah. The one client I was describing, he was so devastated that he had been.. A person had stolen a hundred thousand dollars from him after working there for 14 years and he really trusted her.
Leah Wietholter (23:46):
So because of your industry experience in the construction world, I wanted to talk a little bit about construction fraud. Do you have an example of a construction fraud case that you've worked or what you've seen, or maybe even just the risks that you saw went into the industry so that we can kind of talk about the most common schemes?
Rick Mulvey (24:03):
Yeah. Construction you know, as we talked about before, it's a unique animal and some of the things that make the schemes a little bit different from other businesses are that like a lot of the work is done at remote locations. It's not done in one central office. So there can be fraud perpetrated at different locations and management's not even aware. So one of the big things with construction is payroll fraud and padding of hours and things like that. And the work is done at a remote location. Unless someone back at the office is really communicating and really reviewing, they're not gonna know how many hours people are working. And I know there's workers out there that think if they pad a few hours of overtime, it's not really stealing. And you know, they may rationalize and justify that they're owed this money, but it goes on a lot . In construction you don't usually see the schemes like the buddy punching or the ghost employees, but you do see a lot of hours padding because of the nature of the work.
Leah Wietholter (24:58):
Yeah that makes sense. Since you mentioned that, it just reminded me of a case that I worked or, and several of the construction cases I've worked. And I feel like a lot of the contractors, like the companies themselves, they don't have controls in place that would actually show that discrepancy. You know, how do you quantify something if you don't know what it should have been other than the owner saying, "well, they shouldn't have had overtime." Yeah, well, a lot of owners say that, so that's not good evidence.
Rick Mulvey (25:26):
It requires a great deal of communication. So if a, if an estimator or a project manager has put together a bid on a project, they know if they're planning on working overtime or they're not, and it's got to be constantly communicated with the field. And yeah there has to be reasons why are we working overtime? Do we have change orders? Are we going to make additional money on this? Or aren't we? You know, Yeah, it requires a great deal of oversight and a lot of construction company owners are, are spread very thin and don't pay attention to that.
Leah Wietholter (25:54):
Right. And I hadn't thought about the multiple site issue. Cause that is, I mean, that's just a lot to manage, isn't it? It's a lot to manage just one location, let alone multiple job sites.
Rick Mulvey (26:04):
Yeah. The second area, which I've come across only a small amount. But as you researched this a lot, when you read about cases, project managers who are in charge of a project are typically hiring subcontractors and purchasing materials from vendors and companies will report that, you know, this project manager seems to be using this same subcontractor on every project. So how is this happening? Are they, is this sub going to be the low bidder on every job or are they the only qualified company in the area or are we even looking at this? And I've read in cases where, you know, that relationship between the sub and the project manager is just a little bit too cozy and it has to be reviewed. It's something management from the top down has to be looking at. You know, difficult to pick out the merits of it because the project manager can only say, well, they're the most qualified sub or they had the lowest price on the materials. So I think in a larger company, they would have to have people assigned to be looking at that. Yeah. I think for the unique areas of construction though.
Leah Wietholter (27:11):
Yeah. Or you would hope that they would, right?
Rick Mulvey (27:15):
Yeah you would hope so, sure.
Leah Wietholter (27:15):
So I found it interesting in your book that you included a chapter on blockchain technology. So I'm curious why you wanted to include this topic in your book, you know, for either business owners or investigators. And then how do you think this is affecting or will affect investigations going forward?
Rick Mulvey (27:33):
I have a great interest in that, in that field actually. And as I started reading more about blockchain technology, part of it is in the book because I talk about ways that companies are trying to mitigate fraud and move forward and use some better practices. A small business owner is probably not going to get involved with this at this point, but solutions are being developed all over the place. And for listeners who maybe aren't familiar with blockchain, what a blockchain ledger is, is basically considered an immutable ledger where transactions are recorded that cannot be altered. And that's what they're finding over like the last 15 years, of experience..that these ledgers, because every transaction has to be verified by the participants in the ledger, these transactions can't be altered or hacked into. So think about in accounting, and I do believe blockchain could revolutionize accounting. When you're in a QuickBooks system say, and the bookkeeper writes a check to himself or herself, cashes it, goes back into QuickBooks and changes the check to some other vendor. Okay. So you've probably seen that a lot.
Leah Wietholter (28:38):
Yes.
Rick Mulvey (28:38):
You wouldn't be able to do that on a blockchain. Putting a transaction on a blockchain is like putting your time and date stamp and your identity right there. I mean, it's the equivalent of leaving your wallet at the crime scene.
Leah Wietholter (28:47):
Right.
Rick Mulvey (28:49):
And that's why I think it has such great potential to fight fraud. I think it's going to revolutionize accounting and record keeping and record keeping like stock exchanges and commodity exchanges. You know, I think we're in a relative infancy of it right now. The other area where you see fraud is with product authentication. So I talked in the book a little bit about some of the high-end retailers who are developing blockchain applications. And they're working with companies like IBM and some others to develop applications to authenticate their products like a Gucci or a, you know, any, any kind of high-end retailer. Each product you buy, you would know it wouldn't be a knockoff. That it'd be authentic. So..
Leah Wietholter (29:36):
Yeah. Interesting.
Rick Mulvey (29:37):
You know, Louis Vuitton is working heavily in the area. Now the other, the other area blockchain has great potential to stamp out fraud. And it's a huge fraud area. I don't know if you've been involved, you know, I haven't been involved personally in it is, is the art world. So with fraudulent works of art and forgeries, and this timestamping datestamping technology with blockchain has a chance to really cut down a lot of fraud in the art world. So I don't know, the chapter was strayed a little bit from my topic, but you know, maybe it leaves something open for a sequel, who knows.
Leah Wietholter (30:10):
Yeah. There you go. Yeah that's interesting. I hadn't thought about it in that way. So I appreciate you sharing that. Just to kind of wrap things up here, at the end of your book, you list steps to detect and prevent fraud. What are just your top three?
Rick Mulvey (30:25):
Oh, top three. Sheesh I didn't order them that way.
Leah Wietholter (30:31):
Yes. Yes, I know.
Rick Mulvey (30:33):
Yeah. So I thought that was cute. Yeah. I looked this over and I think I'd like to take two and combine it into one and, because my focus is mostly small business. I think number one would be the duties of your employees to try to keep some segregation and to try to rotate the duties from time to time. I know that's combining two aspects, but I think a lot of small business owners feel that it's impossible for them to achieve that. You know, you have one bookkeeper and in certain ways duties can be segregated or at least some oversight put into it. And I think the greatest value of that is if the business owner is attempting to do that and letting people know that we're going to rotate you around, or one duty of this vertical function is going to be segregated off to somebody else. I think it's greatest value as a, as a deterrent so that, yeah, your staff knows, hey, you know, they're looking out for fraud. And then I think in any of these measures of all the 26 that I listed, I think the greatest value is as a deterrent and just laying out your policies and making your staff know. You know, the other one I think is, is a great anti-fraud measure. You may have come across this more than I have maybe with the larger companies is a fraud hotline. So you typically wouldn't see it in a small company, but with larger companies now, forensic firms such as yourself, maybe, or other accounting firms are running hotline services available for, for clients,
Leah Wietholter (32:06):
Yeah, we do.
Rick Mulvey (32:06):
..Totally Anonymous, you know, Whistleblowers Anonymous. And, and I think as businesses get larger, that's, that's the greatest, greatest attorney you can have. Everyone knows there's a hotline out there, an anonymous hotline.
Leah Wietholter (32:19):
And if they believe that it's actually anonymous. Yeah.
Rick Mulvey (32:22):
Yeah. The other thing in a business of any size, if I had to choose a third one would be background checks. And I know that seems really common, like doesn't every company do background checks? Well, they don't, a lot of companies.
Leah Wietholter (32:35):
Right.
Rick Mulvey (32:35):
In my chapter about not-for-profits, I think I talk about this because a lot of not-for-profits are pretty squeezed and you know, you can write a whole book about not-for-profit fraud and why it's unique from other businesses, but they sometimes don't even have the budget to do background checks. They also, a not-for-profit will tend not to report the frauds because they don't want the bad publicity.
Leah Wietholter (32:58):
Yep.
Rick Mulvey (32:58):
Yeah. And when that happens yeah, they're, they're free to to move on and do it again.
Leah Wietholter (33:03):
Well, Rick I've really enjoyed our conversation today and we will post a link to your book The Fraud Within: Workplace Fraud and Embezzlement Face It, Find It, Fix It, and we'll provide that link in the podcast show notes. But what is the best way for listeners to connect with you?
Rick Mulvey (33:18):
I think through LinkedIn, for sure. Linkedin messages. Offer to connect with me, follow me or message me, um and that's the way I stay up on the whole community of fraud investigation.
Leah Wietholter (33:29):
Yeah, I agree. And that's how I actually found out about you and your book, so.. Well, thank you so much for joining me today and I really appreciate your time.
Rick Mulvey (33:37):
Thanks for having me, Leah. I really enjoyed it.
Leah Wietholter (33:45):
The Investigation Game Podcast is a production of Workman Forensics. For more information about the topics we discuss on each episode, please visit workmanforensics.com. If you enjoy this podcast, please make sure to subscribe and leave us a review. You can also connect with us on any of the social media platforms by searching Workman Forensics. If you have any questions, comments, or topic ideas for the podcast, please email us at podcast@workmanforensics.com.