The right time for building a Fraud Investigation Practice?

Back to work after a week off and my thoughts again turn to marketing my business. I am about to send out a newsletter in connection with my fraud expert witness work and have been musing about the current state of the investigation industry. While I am comfortably occupied with work, perhaps now is the time to develop the business and grow – when all others are pulling in their belts?

I listened with interest this morning as the newsreadergave a daily update on the worsening economic crisis in Dubai and the likelihood that there will be support on a selective basis by neighboring Emirate Abu Dhabi.

Hopefully Dubai will ride its crisis and emerge as strong and prosperous as ever. I do however think that they will probably become more aware of the risk of fraud and the effects it can have on various parts of their business and financial infrastructure as the months go past. This is because I recall a conversation I had last year with a couple of members of the board of Dubai Holdings, the Dubai Royal Family owned umbrella company controlling many £100 billions of assets not only in the Gulf but worlwide also.

I was being interviewed for potential services I could provide to them but recall being mystefied as to what was wanted from me. I did not know if they wanted me to look at a specific problem, advise them on their global fraud risks or trouble shoot one or more of their subsidiaries. I remember thinking that there would be no way forward when I was asked the question “…what will you do when you have finished investigating any fraud we might have…?”

Phew…a multi billion global conglomerate and I should entertain the idea of even finishing mapping fraud risk on my own…!

My very respected and able business minded interviewers were only falling into the trap many financiers and businessmen have encountered over recent years. Fraud is an insiduous and complex beast – it entwines itself into any organisation that fails to consider that it is a threat – in such a way that it is only when a massive loss comes to light that any notice is taken. My old supervisor at the (then) DTI used to call this a “banana skin”. She meant of course that it was when a business slipped and fell flat on its back – they don’t happen often but when they do…

Any business or entity or even economy is greatly at risk in this current poor economic climate. The pressures on idividuals, groups of people or even governments to committ fraud is stronger. Fraudulent trading is going to be rife and we are going to see a lot more high street names other than Borders giving up the ghost as the Christmas trading period does not answer all the problems. Many commentators say that we are only just beginning to enter the trough of this recession!

My advice is that it is never too late to review your business, to fix any hemoerages of cash due to fraud and to secure the future security of the bsuiness. Doing so may allow you to ride the coming storm – unless we really are seeing the “green shoots of recovery” which I doubt.

Although I have strayed off my subject of this post – being the right time to build a fraud investigation practice – my point is clear. Over coming months the level of distressed businesses finding that matters are worse than they feared due to fraud will increase – the floodgates of fraud have not opened yet and there will be much work to do.

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