In a corruption case the primary subject is usually the bribe recipient and the primary subject in a fraud case is, of course, the principal fraudster.
The interview of the primary subject in a corruption or fraud case usually occurs at or near the end of the investigation, when the facts are sufficiently established to allow the interviewer to frame the critical questions and evaluate the truthfulness of the subject’s answers. If a subject is already aware of the investigation, however, or insists on being interviewed, an early interview can be useful, particularly to obtain basic information about the subject’s financial condition – income, assets, liabilities, sources of cash, etc. – to lay the foundation for a financial investigation.
The usual objectives of a later interview of a subject are:
- If the evidence of guilt is clear, to obtain useful admissions or a full confession
- If the evidence strongly suggests guilt, but is insufficient to elicit a confession, to learn the subject’s defenses and to lay the foundation to rebut them later
- If the evidence of guilt or innocence is not clear, to allow the subject to make his or defense and to get enough information to fairly resolve the case
- To obtain financial information and to request financial and other records
Realistically evaluate the strength of the evidence and decide your objective before the interview. This is because the approach to the interview can be quite different depending on the objective: to get a confession, for example, the interviewer usually must have very substantial, perhaps even overwhelming, evidence, accuse the witness directly of wrongdoing and cut off denials and explanations.
To learn defenses, on the other hand, the interviewer must conceal his evidence and opinions, allow the witness to talk freely and invite him to expand on his false explanations. If the investigator tries to get a confession and fails to do so he learns nothing, misses his chance to get impeachment evidence and risks disclosing his evidence through his questions. It might be possible to conduct sequential interviews, in which the subject is first allowed to make his defenses and then, if the evidence warrants, to later press to seek a confession. This even may be done, with difficulty, in the course of a single interview, with the informational questions first.
Questioning the Subject on Financial Issues
As discussed in Step Seven, above, a financial interview of the subject often is necessary, particularly if corrupt payments are to be proven circumstantially. If the subject objects to answering questions about his or her personal finances, politely explain that the nature of the allegations requires you to ask the questions and that the subject, if an employee of the investigating organization, has a duty to cooperate and answer them. Advise the subject that his or her financial information will be kept confidential and used only for the purposes of the investigation.
The interview questions should be framed to include the subject, spouse, children and other related parties, as well as any businesses or other entities (trusts, etc.) in which the subject had an interest during the relevant period. If you do not have the information already, ask where the subject was educated, worked and lived previously. This will enable you to focus public records and litigation searches in these areas. Ask the subject to:
- Describe all sources of funds that he, his spouse, children or other related parties had during the relevant period. Sources of funds include:
- Disclosed employment income (salaries and expense reimbursements)
- Fees and commissions
- Investment and interest income
- Proceeds of loans
- Gifts
- Inheritances
- Insurance payments
- Awards from legal proceedings
- Gaming winnings,
- Funds held for others, etc.
- Identify all cash that he, his spouse, children or other related parties received, had in their possession or spent during the relevant period. Ask about:
- The source of all cash received, held or spent
- The amounts of all cash received, held or spent, including the most cash held by the subject at any time during the relevant period
- The average amount of cash received, withdrawn or spent every month
- If the subject had significant cash transactions or expenditures, the reason for using cash
- Any accounting or other records of the cash
- Whether cash income was reported in tax filings
- Identify all accounts at banks, other financial institutions and brokerage firms that were opened or closed during the relevant time period. Ask about safe deposit boxes and records, trust accounts and investment advisory services.
- Describe his principal assets (perhaps limited to those above a certain value, depending on the facts of the case), including, e.g.:
- Account balances (current and highest)
- Real property (residence and other properties and improvements to them)
- Investments, securities, partnership and business interests
- Retirement accounts
- Vehicles, boats, airplanes, etc.
- Expensive artwork, jewelry, etc.
- (Have the subject describe when and how he paid for the assets, the source of funds, and their cost – not their current value.)
- Identify his principal liabilities, e.g., the lenders and amounts for:
- Mortgages
- Auto and other installment loans
- Credit card debt
- Other loans, such as from family members, and debt
- Describe his average total monthly expenditures and methods of payment for living expenses.
- Identify all substantial expenditures during the relevant period, such as major home improvements.
- Estimate his current net worth as accurately as possible, and at the beginning of the relevant period. As noted above, if feasible, ask him to prepare and submit a written financial statement.
- Describe all litigation (civil or criminal) in which he has been involved during the relevant period, the court, the names of counsel, and the disposition of the case. This can provide useful leads to financial information.
- Identify his accountant, tax preparer, financial adviser, lawyer, travel agent, business partners, real estate agent, etc.
- Wrap up. Emphasize the importance of complete and accurate responses. Tell the subject that the investigating organization will rely on his answers to make the most important of decisions affecting him. Ask a final time if the subject has disclosed all sources of funds other than his employment income.
Give the subject a list of records to be produced and consent forms to sign. This is usually done at the end of the initial interview because the subject might refuse to appear and answer any questions if he knows his records will be requested. Tell the subject a follow up interview might be required. See step seven, above for list of pertinent financial records.
The interview of a subject should be recorded or transcribed, if feasible, or the subject should review and sign the memo of interview. This is because the subject’s knowing and willful false statements can be used to show fraudulent intent.
CONSENT FORMS
Prepare consent forms before the initial interview for the subject to sign authorizing the release of records from:
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- Consumer credit reporting companies
- Financial institutions
- Lenders
- Real estate agents
- Lawyers
- Credit card companies
- Accountants and tax preparers
- Retailers
- Travel agents
- Email service providers
- Fed Ex, DHL or other private delivery services
- Home improvement contractors or other record holders as the facts of the case dictate
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Sample consent form
To: —————– Bank Officer Bank name and address I, (subject) do hereby authorize and direct (Bank name) to release all information and records regarding (account number(s) (in the names of) for the time period of (dates) to (name of investigator or any representative) of (investigating organization). (Optional) The records and information to be produced include but are not limited to: (list) Signed, __________________ Subject (Date)