Interviews in Fraud Investigations – Fraud Files Blog

Interviewing witnesses and suspects is a critical part of any fraud investigation. There are tons of resources out there to help fraud investigators learn how to become effective interviewers. There are books, videos, courses, and certifications.  I’m going to quickly cover some of the high points of interviewing here.

Fraud investigators spend a lot of time in question-and-answer mode. We are trying to understand the company, how it operates, who is involved in certain processes, what went wrong, and who may have been involved in the suspected fraud. Much of this happens informally through conversations with employees as investigators gather documents, learn procedures, and piece together what happened.

Good interviewing starts with demeanor and body language. Employees who have nothing to do with the fraud and are simply providing information need to feel comfortable talking to you. They also need to know you are listening. At the same time, the investigator has to direct the conversation so that an hour is not spent on information that has nothing to do with the case. The goal is to let the person talk while keeping the discussion focused on information that may help move the investigation forward.

The best interviewers know how to connect with people. They guide the discussion without making the interviewee feel like every answer is being controlled. They listen instead of constantly interrupting, and when they need to redirect the conversation, they do it naturally. A good interviewer is professional but not stiff or intimidating. If the interviewee feels comfortable, he or she is often more willing to explain what happened, volunteer details, and mention things the investigator may not have known to ask about.

High-stakes interviews require preparation. Before interviewing someone who may have significant knowledge of the fraud, the investigator should develop an outline of the important topics and questions. An outline helps keep the interview organized and reduces the chance that an important issue will be forgotten. The closer the interviewee is to the suspected fraud, the more important it is to gather substantial information before conducting the interview.

If you are interviewing the primary suspect, for example, you generally want the bulk of the investigative work completed first. You should walk into that interview knowing a significant number of facts that you can independently verify. That makes it much more difficult for the suspect to mislead you. You are not simply listening to a story and deciding whether it sounds believable. You are comparing the answers with evidence you have already gathered.

Do not approach the interview like a scene from a television crime drama, in which the investigator walks into the room knowing very little and somehow tricks the suspect into confessing. Real fraud investigations rarely work that way. Preparation gives the investigator a much stronger position. The more you know before a critical interview, the better equipped you are to recognize an incomplete answer, an inconsistency, or an outright lie.

The timing may be different when interviewing a potential accomplice or someone who worked closely with the suspect, such as a personal assistant, bookkeeper, or subordinate. You should still have enough information to ask intelligent, focused questions, but the investigation does not necessarily need to be nearly complete. This person may provide background, explain procedures, identify additional documents, or point you toward other people who should be interviewed. The information gathered may shape the next phase of the investigation.

The physical setting deserves some thought too. Interviews should take place in a private room with as few distractions as possible. You do not want coworkers walking past a window and watching the interview. You do not want people coming in and out of the room, and you certainly do not want a ringing phone interrupting an important answer or a critical line of questioning.

A few tips for questioning an employee:

• Interview one person at a time. You do not want one employee’s answers influencing another employee’s recollection or response.
• Be thoughtful about note-taking. You will probably need to take some notes, particularly when the discussion involves technical details, dates, names, or numbers. But constant note-taking can make an interviewee uncomfortable and can interfere with the natural flow of the conversation.
• Ask short, clear questions. Avoid complicated questions and questions that ask several things at once.
• Limit questions that can be answered with a simple “yes” or “no.” Open-ended questions usually produce much more useful information.
• Give the interviewee enough time to answer. Silence is not necessarily a problem. Resist the urge to immediately fill it with another question. If an answer is incomplete, ask the person to explain further.
• Ask for the factual basis behind important statements. “Why do you think that happened?” “What did you see that led you to that conclusion?” and “How do you know he was the person who took the blank checks?” can help separate facts from assumptions, rumors, and opinions.
• Keep the interview focused. Some people wander off topic because they are nervous. Others naturally ramble. And some may deliberately steer the conversation away from uncomfortable subjects. Whatever the reason, the investigator needs to bring the discussion back to the relevant issues.
• Do not reveal more evidence than necessary. The purpose of the interview is to gather information. Giving away too much of what you already know may help a dishonest interviewee tailor answers to fit the evidence.
• Maintain control of the interview. You decide which topics need to be covered, when additional questions are necessary, and when it is time to move on.

Interviewing is a skill that improves with experience. A good fraud investigator learns how to listen closely, recognize when an answer needs more probing, and keep a conversation productive without making it feel like an interrogation. Preparation is especially important when the stakes are high. Walking into an interview knowing the documents, the transactions, and the facts gives you a much better chance of recognizing what is useful, what is questionable, and what needs further investigation.