Internal Investigations – Things to Remember

Supporting Small Businesses When Fraud Occurs
February 28, 2018
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When people have asked me what I do as a job, there seems to be great interest that as an investigator, I have managed cases of malpractice, where on certain occasions this has involved the investigation of the theft of vast amounts of money taken by staff working for the organisation. There is excitement by the enquirer in undertaking an investigation and “I would like to do that” is often a phrase used.

On reflection the sixty second elevator pitch I give, only tells a fraction of the story as to the ‘life’ of an investigator and investigation and in fact if the truth be told, there is little discussion as to the complexity of an investigation. In fact there is little discussion, even by the organisation itself, as to what the repurcussions to an organisation and investigator could be if the correct investigation process was not followed. With this in mind I have decided to put keyboard to screen and provide a brief overview of key pointers for those  who have limited investigation experience.  I hope if nothing else this shows, internal investigations are complex, timely and if not managed correctly could cost the organisation dearly from a material and reputation perspective. My best advice, is that if you do not have a dedicated team to perform such investigations (which should be supported by a sound framework for investigations) stand clear and do not get involved in anyway without first of all seeking assistance from external experts or Police/Gardai.

Top 10 Mistakes Employers Make When Investigating Internal Employee Complaints

The starting point and assessment of an investigation is the foundation to ensure that the rest of the investigation cannot be challenged in a workplace tribunal or court and this should always be borne in mind.

  1. FIRST STEPS

Priorities

  • Identify the team – Internal and external
  • Assess the Damage – Reputation/Financial/Regulatory Staff Relations/Commercial
  • Employment Issues, i.e. Dealing with Suspects

Centralise Crisis Management (high profile cases)

  • Investigation Team – Access to Board/Authority to Make Decisions
  • The Press- Liaison Officer with authorised press statements
  • Notify Insurers
  • Legal Team- In house or external? Independence and expertise
  • Specialist Investigators- collect and consider evidence

Establish Initial Objectives

  • Criminal and/or civil proceedings
  • Disciplinary Proceedings
  • Recovery of Assets
  • Insurance Policy Requirements
  1. EVIDENCE

Initial Considerations

  • Where might it be?
  • What classes of documents and how to preserve them? – paper copies/emails/computer data/telephone records /fax printer information
  • Do not switch on or access any suspect computers

What should be done with the evidence?

  • Centralised holding for preservation/ audit trail
  • Suspend routine document destruction
  • IT Specialists
  • Preserve Data- Isolate PC’s /Transfer pass worded directory
  • Suspend access rights (signing rights) of suspects

Privilege

  • Preservations; mark communications (including emails) with legal advisor’s information
  • Circulate explanation of privilege – avoid inadvertant disclosures
  • Consider whether communications with third parties are privileged, e.g. auditors
  1. EMPLOYEES AND WITNESSES

Ensure co-operation- keep stakeholders informed

  • Collusion – garden leave pending investigation/confidentiality /evidence
  • Interviews – independent/ representation / minute/audio recording
  1. DEALING WITH THE AUTHORITIES

Gardai/Police

  • Do we need to call them?
  • Interviews with Police Prior to Internal Matter

Regulators

  • Why/When /Who?
  • Their powers and how they use them?
  • Legal implications/ requirements /AML / Data Protection

Provision of Evidence

  • Obligations to provide without court orders/warrants
  • Will you ever see it again?
  1. RECOVERY AND TRACING OF ASSETS

Preventative Steps- Cancel Mandates, Inform Bankers, Brokers etc.

Interlocutory Action

  • Freezing orders
  • Securing Evidence
  • Evidence to Proceed?
  • Cross jurisdiction enforcement
  • Cross Undertaking in Damages
  • Pension?

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