Fraud in the age of the pandemic: the challenge for business

On Wednesday 10^th March 2021, Aperio Intelligence hosted a webinar entitled Fraud in the age of the pandemic: the challenge for business, which assessed the fraud and corruption trends that have emerged in the UK and internationally since the start of the pandemic, and  also looked ahead to how business and society might react to these trends as the pandemic recedes in 2021. Chaired by Aperio Intelligence’s Director of Investigations, the three external panellists for the webinar were:

1. Detective Chief Superintendent Alex Rothwell, Head of Fraud Operations with the City of London Police.
2. Ivan Dimitrov, Global Compliance Officer with CargoTec, a global shipping and logistics company.
3. Maija Burtmanis, an Australian lawyer and founder of Future Fit, a compliance-focused consultancy, and former senior compliance officer in the pharmaceuticals, medical devices and life sciences sectors.

A recording of the webinar is available here.

Key themes of the webinar:

1.The pandemic has provided ample opportunity for fraudsters to exploit the changed circumstances; fraudsters have been innovative in exploiting increased home working and the associated cyber vulnerabilities. They have also sensed opportunity for abuse of government-backed furloughs and loans for individuals and businesses.

2. Fraud and corruption may be described as “an epidemic within the pandemic”. The estimated cost of fraud in the UK alone in the last year is measured in the tens of billions of pounds, and that does not account for the opportunity costs caused by lack of funds for funds for legitimate investments caused by fraud-related losses.

3. As the pandemic recedes in 2021, companies are likely to uncover evidence of frauds perpetrated during lockdown periods; expect more whistle-blower activity as a result.

4. While lockdown persists in some parts of the world, internal investigators, auditors and compliance specialists must continue to rely on technology to conduct their work remotely. This brings certain challenges but can be exploited successfully.

5. Companies still affected by the pandemic should remember the following:

• Tone from the top remains of paramount importance; CEOs and leaders must emphasize that there will be no slackening off a company’s commitment to conducting business ethically and legally even if commercial pressures mount because of the pandemic.
• Internal compliance education programs should be maintained and even augmented during the pandemic. This is related to the tone from the top and effectively disseminates the necessity for ethical business practices throughout an organization.
• An effective program to deal with reports of fraud and other forms of employee malfeasance are especially important during pandemic lockdown periods. This includes an effective program to conduct internal investigations in a thorough, objective and proportionate manner. Companies with insufficient resources, or who wish to conduct completely independent investigations, may therefore wish to contract with external investigations providers.

6. New US President Joe Biden has signaled his intent regarding pandemic-related fraud and corruption – both at home in the US and internationally – by staffing the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) with a cadre of lawyers and prosecutors with experience in the Foreign Corrupt Practices Act (FCPA). That would build on the previous administration of Donald Trump when statistics show that both DoJ and SEC investigations against errant companies increased.

7. The US authorities will also be keen that companies are able to show adequate and effective internal compliance programs which includes an effective reporting mechanism, a full suite of anti-fraud and corruption policies, a means to investigate any received allegations and company-wide education and training programs to minimize the risk of fraud and corruption.

8. Countries other than the US will also likely refresh anti-fraud and anti-corruption legislation and enforcement actions in 2021 as the pandemic recedes.

Aperio Intelligence assists our clients globally with corporate investigations covering sensitive and complex matters such as fraud and embezzlement, corruption and bribery, intellectual property theft, and other episodes of serious employee malfeasance. In addition, Aperio works with law firms, litigation funders and sovereign entities on litigation support, including asset tracing and recovery related to civil and criminal cases and dispute arbitration.

Paul Doran has over twenty years of experience in conducting such investigations. Prior to returning to the UK, Paul lived and worked in Brazil, China, Colombia, Norway, Pakistan and Switzerland, and has conducted investigations in almost 100 countries and jurisdictions. He is a Certified Fraud Examiner (CFE) and speaks French, Spanish and Portuguese in addition to his native English.

Contact: paul.doran@aperio-intelligence.com and +44 7585 847757