Objectives
- Compare and contrast approaches to training for work groups that vary in size, experience, and availability
- Evaluate the benefits of formalized training for those investigating and prosecuting white collar crime
Introduction
The recruitment and selection of investigators has been discussed in this Book, and guidelines suggested for these tasks. Proper selection is very important, yet it is only a beginning of the process of developing first-rate investigators. Candidates for the position of investigator require further training to develop a high level of professional skill, even if they have prior investigative experience. A detective who has worked only in homicide or even in street bunco may have to be oriented toward new types of investigative techniques, such as more subtle ways of talking with witnesses and interrogating suspects, more care in planning of arrests, more familiarity with the paper trail. Some investigators may have had experience only with certain limited types of white collar crimes, such as embezzlement, and may not be oriented to other types of criminals and crimes, such as land fraud which is perpetrated more openly.
Resources or other factors will often prevent having a recruiting procedure that capitalizes on the personal motives of candidates, for example, personal motivations and qualifications to deal with white collar crime. Therefore recruits often will need to be educated to the importance of white collar crime, as well as to the skills involved in investigating such crime. In many situations, white collar crime units may have to cooperate with agencies which have different priorities. In such cases there is a danger that personnel in these other agencies will have to learn the importance of white collar crime, since they may tend to relegate it to a low priority.
Even officers who are experienced white collar crime investigators within an agency may need, to learn about new crimes, and new techniques of investigation. A consumer fraud specialist in an agency may need to learn about stock fraud if there is a sudden increase in the latter in the agency’s jurisdiction; or about computer fraud which relies on a newly developing technology. In the sections below, a number of different approaches to training are described. Not all of these approaches are especially useful for all types of agencies and units. Some agencies may be so big that they can do their own training; others may be so small that they can only send recruits to training schools held on a regional or even national basis. Some agencies may be highly experienced in white collar crime investigation and can capitalize on this experience to help train new investigators; other agencies are entirely new, and will have to depend on the investigators’ own talents and backgrounds and on outside resources for training. In larger agencies, the investigators are more likely to specialize and would need to secure training in other specialties, either inside or outside the agency. In small agencies each investigator is more likely to need to be a generalist, taking on all types of white collar crime investigations within its geographic, legal, and subject matter jurisdiction.
In describing the possible training approaches below, the appropriateness of particular training techniques for particular agency sections will be pointed out. It should be recognized, however, that where appropriate training approaches are limited by resources, the pooling of resources among agencies and across jurisdictional lines can help solve the problem, for example by the use of regional schools when formal training is most appropriate.
In the following sections guidelines for training white collar investigators are suggested. These emphasize active, participating learning in which the trainee practices various techniques, discusses various issues, critiques performances, etc. This approach stands somewhat in contrast to much of what is now done in white collar crime enforcement training courses, in which more time is given to straightforward lecturing, often describing what should be done in various types of cases,
Obviously, such lecturing has an important role to play in training investigators; the invited expert lecturer can present very valuable and useful material which in many instances can be presented in no other way. In smaller units with very limited resources it may be the only way possible. On the other hand, the guidelines below attempt to achieve a better balance between the listening and learning approach and the active (participatory) learning approach. In order to achieve this, much of the discussion below is oriented to the participating learning approach, on the assumption that its lessons can more easily be transferred to the lecture format than the other way around.
In line with this approach, there are at least three ways in which investigators can be trained: informal on-the-job training (OJT); informal cross-agency training; and formal training. We will consider each in turn.
INFORMAL TRAINING FOR WHITE COLLAR CRIME ENFORCEMENT
On-The-Job Training For Individual Investigators
This training is especially effective if the agency has already established itself in the area of white collar crime investigations. Also, larger agencies may be better able to allocate their own resources for these purposes than smaller ones. Nevertheless, small agencies with limited resources may be able to use OJT only, since they do not have the funds for formal training.
OJT would be most effective in an agency with a very low level of competitiveness and secretiveness among its staff. Unless the more experienced investigators or prosecutors within an agency are willing to share knowledge, on-the-job training will be slow and uncertain. In traditional detective agencies the tendency is for each detective to develop his own net of informants, investigative techniques, etc., and not to share these with his fellow investigators. Partly this tradition stems from an evaluative emphasis on the number of cases cleared or good arrests made. If a white collar crime unit has developed out of a traditional detective unit, it is important to actively try to reduce this secretiveness, not only for the organizational reasons mentioned elsewhere in this book, but also because such secretiveness prevents effective on-the-job training. Nevertheless, experience has shown that personnel in white collar crime agencies are cooperative in spirit, so that on-the-job training can be conducted effectively.
OJT would also be especially useful for agencies which recruit their trainees from other investigative ranks, such as detective bureaus, federal agencies, etc. In such cases the trainee is already a professional in investigations, but may not have the particular expertise needed for his new work. Some of the skills and ways of relating to victims, witnesses and suspects that he brings from another agency may be inappropriate or even counterproductive in the area of white collar crime. He needs to learn how to meet a corporate executive vice president eyeball-to-eyeball and how to talk to him in an appropriate manner, in contrast to talking to an addict informer or a burglarized family. Even if he has been a white collar crime investigator with another agency, he needs to learn about local crimes, businesses, victims, agencies, etc., which may be quite If he has a background in federal agencies, he may find it hard to adjust and understand the problems and limitations of local investigative units.
To facilitate OJT it is very valuable to have regular staff conferences in which on-going cases are discussed. This not only helps the trainee, but should also add to the cooperativeness and openness among the regular staff. Where the trainee comes from another agency, or another background, he can make his own unique contribution to the training of others. In such conferences both the trainees and the experienced investigators should present cases.
If at all possible a prosecutor, either from within or from outside the agency, should participate in these meetings. Such cross-discussion is more valuable than relying solely on manuals or other written training materials. In some agencies such training meetings have been considered too costly in time, especially if the whole staff participates. A solution to this problem might be simply to replace the total staff meeting with a series of smaller meetings of sub-groups of the staff.
Some of the benefits of regular staff conferences can be achieved by other techniques: hour-long brown-bag lunches in the agency in a common area; having a physical arrangement which enables people to meet and chat in hallways, work-spaces, etc; making all public relations material, including press releases, talks, radio shows, etc., available to the on-the-job trainees.
On-the-job training is frequently implemented by starting the new investigator off on simple cases, working at a desk next to an experienced investigator. The trainee might sit in on some of the interviews, interrogations and meetings of the experienced investigator. Or the experienced investigator can team up with the trainee so that they can work complex cases together. The trainee’s background and the needs of the agency should determine which is the most appropriate.
Some experienced investigators may be particularly effective as trainers and should be given recognition for their efforts. The progress of the trainees should be evaluated in periodic three-way conferences among the trainee, the experienced investigator, and the supervisor of investigation. Involving the supervisor will tend to minimize any tendency for the investigator to “hoard” the trainee’s effectiveness by keeping him as an assistant longer than necessary for his training.
On-The-Job Training for Entire White Collar Crime Units
In new and small units, one form of training is to train the unit as a whole on the job; for example, the new investigative staff can be assigned cases more on the basis of their value in training than for their value in other respects. The staff as a whole, as individuals or as teams, might be assigned relatively simple cases at the beginning of their training, in which they have a good chance of being successful. Furthermore, if such cases are likely to generate much public interest, then a successful prosecution can encourage the young agency to acquire even more skill.
Informal Cross-Agency Training
One variation of on-the-job training is to temporarily assign investigators to work in agencies which are either similar to, or functionally closely allied to the trainee’s own agency. For example, prosecutors’ offices have had police detectives work as investigators in their offices for a period of time, after which the police have returned to their own departments, where they become a reservoir of white collar crime investigative skills. In some instances, when the trainee returns to his home agency he is replaced by another trainee from the same agency or from another.
The trainees most likely to benefit would be those who have at least some experience in investigative work, such as that involving street bunco, homicide, etc., but who need to learn some of the special skills involved in white collar crime investigation. Cross-agency training would be most useful for small or large agencies in metropolitan areas where there are more likely to be a host of agencies which are difficult to learn about from the outside. Obviously, only a large agency can itself afford to give up an investigator for a while, although the cost can be reduced by having exchange relationships among agencies.
The advantages of cross-agency OJT are several. First, they have all the strengths of OJT mentioned above. Second, close personal ties can be established between agencies which otherwise might hold each other at a distance, thereby facilitating communication and cooperation. Third, personnel in each agency will have a better understanding of the other and therefore be better able to work together. Fourth, the trainee might feel less pressure, since the mistakes which he inevitably would make would probably be known only by personnel in the training agency and less likely to be known by his peers and supervisors in his home agency. Fifth, the trainee does actual productive work during his training.
All personnel in the host agency need to be fully apprised of the values to them of cross-agency training. Otherwise, the trainee would have to use up too much of his short stay just gaining support and acceptance. The value would be enhanced if there actually were an exchange of trainees between agencies.
The model for all cross-agency training might be the executive training model used in some corporations, in which an employee marked for executive level position is systematically moved through several parts of the organization. However, it is important that the employees he works with know in advance of his coming and why he is there; otherwise the suspiciousness of the potential ‘spy’ would make his experience much less valuable.
A home agency might develop a long-range plan for rotating its investigators through a variety of organizations. As mentioned in this book’s section on the selection of investigators, it is very valuable to have investigators with experience in a variety of businesses. Since it is likely that unit investigators might be totally unfamiliar with some important types of organizations, the agency might send its investigators to work in them or to spend some time in them to become familiar with their mission and operations.
Regional conferences or even national conferences dealing with white-collar crime can also contribute to effective cross-agency training, especially if the participants in the conference are from different types of agencies and represent different kinds of skills. Presentations at such conferences and the formal and informal exchanges of ideas and information which take place can serve as a form of cross-agency training.
Many federal agencies provide specific training in the field of white collar investigation. For example, the US Securities and Exchange Commission hosts regional conferences at which expertise and experiences are exchanged with state officials concerned with securities and investment enforcement. The FBI initiated special training courses dealing with white collar crime investigations. In addition, there are for example investigative units in regional offices of the US Department of Housing and Urban Development which can provide know-how with respect to cases involving housing construction and financing; and it can reasonably be anticipated that the resources currently being mobilized by the US Department of Health, Education and Welfare to combat Medicaid frauds will ultimately develop into a similar repository of expertise in the medical fraud area.
FORMAL TRAINING FOR WHITE COLLAR CRIME
This section offers some suggested guidelines for the development and operation of programs to train white collar crime investigators, together with illustrative training materials to show how such guidelines can be applied. It is, however, beyond the scope of this book to present a complete training package. Common elements of such a package are outlined, always with the recognition that different agencies will find only particular portions useful to them, or will elect to apply them in ways different from that suggested here. The sections are therefore described so that they can be used somewhat independently of each other.
In the discussion below, it is assumed that most agencies are not large enough to afford their own, internal formal training programs. Thus the training is most likely to occur on a regional or even national basis. However, if the agency is a large one, such as a metropolitan police department or a statewide law enforcement agency, then it might conduct its own formal training; such instances are assumed to be rare. Or in many instances, some of the independent parts of the training programs described below can be used in-house as part of staff meetings or at other times set aside for training purposes. Some of the procedures outlined below were deliberately structured for use by agencies with severely limited funds and resources.
Much of the program described below involves a heavy emphasis on simulation of actual investigations, role-playing, discussions, practice exercises, etc., in contrast to the more traditional lecturing approach. This approach reflects recent trends in training in police academies, executive training programs, intelligence agency training, and in other types of programs. However, the salient points of the content of the material communicated through this approach can also be made through lectures, so that a trainer who prefers to lecture can view the material presented below as points to be covered in lectures. Most of the material discussed below is quite readily adaptable to the lecturing format.
Since the content of a training program depends in large part on the cooperation of the student body, it is first necessary to discuss whom to train in special programs. The concern here is as to the numbers and types of agencies from which the stUdents should be recruited, the rank of the student body, their relative degrees of experience, etc. Furthermore, the question of training for associated professionals and staff, such as prosecutors, patrolmen, receptionists, etc., needs tQ be dealt with. After these issues are discussed, then the guidelines for the control of the training will be discussed. It should never be lost sight of, however, that the selection of the type of content will depend in large measure on the composition of the student body. There is no way to do formal training.
How Many Agencies and How Many Trainees from Each?
Sometimes a trainer may not be in a position to influence the selection of agencies from which trainees are drawn and the number of investigator-trainees from each. But, at other times, the trainer may be in a position to influence the selection. In that case, he is faced with a number of questions: Should you limit training in anyone course to but one investigator from each of several units or agencies? Should you train more than one from more limited numbers of agencies? Should you seek to simultaneously train the entire investigative staff or staff-to-be of an agency? If the formal training is done within a large agency, which units within that agency should be tapped for trainees?
In answering these questions, one should bear in mind that training in white collar crime investigation is often not like training a newcomer of a unit to get up to the speed of the old timers; that is, to learn the same sorts of skills that the old timers already have. Instead, the training is likely to involve bringing some new ideas, new approaches, even new goals to a unit. For example, the graduate of the training program may be bringing back some ideas about investigating land fraud to an agency or unit which never thought of coping with this type of fraud. If the graduate is the only one interested in land fraud he is likely to get caught up in the pressures of other assignments. If, however, he has been trained with another investigator from the same unit, together they may be better able to get the cooperation of the unit to give recognition and higher priority to white-collar crime in general, as against other agency enforcement efforts, as well as to launch efforts against land fraud. It is probably more effective to have a larger number of trainees from a fewer number of units than to spread the training thin.
Since white collar crime investigative units in law enforcement agencies are frequently new agency efforts, it may sometimes be necessary to train a whole new squad. There are a number of advantages to training them together as a unit, either separately or in a training program with other trainees.
The squad can get to know and trust one another in a situation in which the pressure to work on cases is absent. They can learn to cooperate, to share information and ideas as they help each other through the training, so that the traditional detectives’ tendency to hoard information may be minimized. They all start at the same level, with no established hierarchy of old timers and novices. When they return to their parent agencies, they return as a unit and can start functioning as a unit; there is no need to face the lonely task of re-entry. As mentioned above in the discussion of on-the-job training, such new units may then be given cases to work specially selected for their value as training exercises.
Although there are advantages to having more than one trainee from each agency in a training program, there also are advantages to having trainees from a variety of different agencies at the same program. If the training is done within one large agency, there are similar advantages to selecting trainees from several units within the agency. It is most important, from both a training and operational viewpoint, to develop personal contacts across agency and unit lines. After returning to their agencies or units, the graduates can gain valuable information through the contacts; extradition may be facilitated; additional victims of a scheme may be found information about modi operandi and about the movements of bad actors can be shared. In short, the training program can serve as the basis of a regional or cross-jurisdictional information exchange, as well as within an agency.
Training programs should be organized to facilitate the development of such information and cooperation networks. Time for socializing should be provided. Joint homework assignments may be given to teams of people from different agencies. A list of members, agencies, and telephone numbers should be prepared and distributed to all trainees during the sessions, these may later be invaluable for the participants. In fact, it may sometimes be possible to recruit trainees from several agencies which would have a high likelihood of benefiting from such a network of personal contacts. These trainees might be recruited from agencies in the same geographical area, but with different types of responsibility; for example, investigators from a police department and from the office of a prosecuting attorney in the same area, or from an attorney general’s office in the same area, or from an attorney general’s office and a regulatory agency.
If the trainees have already had some experience in white collar crime investigation and come from a number of different agencies, their knowledge can be shared as part of the training program. Similarly, a trainee who has had some kind of experience in a particular trade, such as auto repair, or construction, can make a special contribution. When the trainees arrive at the beginning of the program, or even before they come, a questionnaire regarding their particular skills could be administered. Some of them may be asked to make presentations to the others; some may conduct seminars in certain types of investigations. For example, one who knows about decoy operations could be given the assignment of working one up for the others to learn from and critique.
Such sharing of expertise of either an investigative or trade nature may be especially useful if certain types of white collar crime schemes are currently spreading. A pyramid, or other type of scheme will frequently operate across jurisdictional lines, or a gang of home repair con men may be moving across state lines. The training session could be used as a good setting for sharing expertise in how to investigate such schemes, or even particular criminals under such circumstances. Concrete investigating information, such as AKA’s, MO’s, VIN’s, may be exchanged. An information network can start right in the training sessions, and this provides excellent training in the value and method of sharing information. This not only would be practice, but also a real law enforcement effort. This is practice right on the spot.
Who Should Be Recruited from the Agency – Line personnel or executives?
If the area of white collar crime enforcement is a new one for an agency, its higher echelon persons are probably not as expert as they are in the more commonly recognized areas such as street crime. If some of their subordinates become expert in an area in which agency heads do not even have a minimal working knowledge, such subordinates obviously would be placed in a difficult position. In short, Chiefs need to be oriented before the line personnel. Of course, if the chief is already an expert, this is not a problem.
However, there are other, very important reasons for orienting police or agency chiefs, and their higher-level assistants, before other subordinates. If agencies are to be effective in this area, white collar crime investigation has to have a high priority in the allocation of resources, and in the setting of agency policy. There is always pressure against moving into new areas and devoting new resources to them, especially in a political and media-sensitive area such as white collar crime. Thus, agency heads need to learn about the impacts and significance of white collar crime, of its relationships to organized and street crime, etc.
Not only is such orientation valuable for agency chiefs in its own right; but the investigative staff who work on white collar crime need to know that their chiefs have received this orientation. If they know that the chief is on their side, they can take more pride in their work; can feel secure that they will have a reasonably fair shake with respect to promotions and other benefits, that they will get their fair share of the department1s resources. Policy statements by agency heads, even directives, will be less important than consciousness in the white collar unit that the agency head understands the nature and importance of its work. One good way for agency heads or their deputies both, to acquire this knowledge, and to convey their understanding, is to attend white collar enforcement orientation conferences which are more and more frequently held for the special benefit of criminal justice executives.
There are real advantages in having agency chiefs involved in separate programs or workshops from their subordinates, who should attend subsequent programs designed for them. Furthermore, these agency heads need to be more concerned with certain matters and less concerned with others, as compared to investigators. They need to learn more about the impact of white collar crime and less about how to trace a check from bank to clearing-house to bank. They need to know about how to organize a white collar crime unit rather than how to develop a fraudulent merchandising case.
Should Trainees with Varying Amounts and Kinds of Investigative Experience be Trained Together?
As was mentioned in the section on personnel selection, there are great advantages to staffing a white collar crime unit with people having a variety of backgrounds, skills, and experience. However, this raises the question of whether people of different degrees of experience in investigative work, even outside the white collar crime area, should be trained together. For example, in a police department should the classes consist of all detectives, all patrolmen straight off the street, all new-comers to law enforcement, or should these groups be mixed together for white collar crime enforcement training? This question needs to be answered separately for beginning classes and programs for more advanced classes.
With respect to beginning classes, groups with no law enforcement experience obviously would need to learn some about the structure and organization of the criminal justice system, its administrative processes and procedures, etc. The law enforcement group with minimal experience with business would need to learn some facts about business which may be elementary to people with a business background.
On the other hand, people with some street crime investigative experience might have to learn what the differences are between the investigation of street crime and white collar crime. Among the areas of indifference are the difficult challenge of determining whether certain events constitute a crime; the longer period of investigation before a case is developed, the difference between interviewing and interrogating crime suspects, witnesses, victims, etc., as between white collar crime and street crime. This is not just a matter of learning what is new in white collar investigation, but in learning not to do some of the things that one does in street crime investigations, such as the usual practice of interrogating suspects early in the investigative process. In short, there are many reasons for keeping the beginning introductory classes homogeneous.
If the classes consist of both experienced investigators and novices, some trainees would become bored with the material and some trainees might begin to feel suspicious of the others, or relatively inadequate because of the differences in knowledge and experience. Some might not appreciate the significance of some of the un-learnings that need to occur.
On the other hand, once some of the introductory material has been covered for each of the groups, then it would be well to combine them into one class or into a series of mixed classes. Then all of the groups might be acquiring more knowledge, such as what sorts of information can be gained from certain federal agencies, what the legal restrictions are on the release of information, how to trace money through a series of companies, the legal subtleties of fraudulent consumer practices, etc.
The value of mixing the groups is not just a matter of economizing on the costs of training. It is also a matter of an exchange of knowledge, trainee to trainee, as each of the specialized groups make special contributions from their special areas of knowledge. A person with a background in real estate might, for example, himself provide valuable and essential background on some of the ways in which advertising is handled, or paper is processed, in a real estate firm. Some detectives may have more practical and subtle knowledge about how prosecutors’ offices function. The instructors cannot possibly have information about the whole complex mass of business and criminal justice transactions, and these students’ input would be most valuable.
What about Joint Training with Prosecutors?
The logic of having investigator-trainees from a variety of agencies and backgrounds training together immediately points to the need for training with and for prosecutors. As was mentioned earlier, one of the most crucial relationships in the law enforcement community’s work against white-collar crime is that between prosecutor and the investigator. If these two professions are to relate in the most constructive fashion, it is vital that they understand each other’s ways of doing things, needs, goals, etc.
Most new white collar crime investigators have at least some prior training in the rudiments of the criminal process. In the white collar crime area, however, it is most important that they acquire some basic knowledge of statutes dealing with white collar crime and related abuses, civil, regulatory and administrative remedies, etc.
Formal training they receive in a white collar crime training program should augment this knowledge.
On the other hand, most lawyers do not receive training in the techniques of investigation in general, let alone training in the techniques of white-collar crime investigation. This lack of training no doubt contributes to some of the problems in the relationship between the two. It would therefore be very valuable if training programs for investigators not only were open to prosecutors, but prosecutors were actively encouraged to attend, especially those who were just beginning to get into the prosecution of white collar crimes. Prosecutors who are new to this area appear to learn much from experienced investigators and come to have a deeper and more knowledgeable appreciation of the complexities of investigation; investigators can likewise learn from prosecutors both what is legally required to make a case and what, as a practical matter, might be needed to persuade a jury.
In practice exercises the lawyers could take the role of lawyers interacting with investigators, and also reverse roles to act as investigators relating to investigators, to suspects, to witnesses, and to lawyers.
In small agencies with limited resources, such investigator-prosecutor training can be conducted with just the local prosecutorial agency, or with the prosecutors if they are part of the same unit. Some of the practice sessions described below can be set up easily without the use of outside resources and can be made part of a regular in-service program.
What about Training Patrol Officers?
As was mentioned earlier in this book, there are many ways in which the officer on the beat can help in fighting white collar crime. In their training in the police academy, patrolmen in general are rarely made aware of these possibilities. In fact, most officers are convinced that many of the instances of white collar crime they have contact with are really private civil disputes. It is very important, therefore, that patrolmen learn to recognize the criminal character of white collar crime early in their careers, in the academies. Furthermore, even if academy trainees learn to recognize white collar crime, they are likely to need to be educated with respect to all of the arguments they have, or will later encounter, about why not to do anything about such crime.
As will be indicated below, these issues need to be faced in any training program, but the issues are even more serious with respect to patrolmen since they have so many other responsibilities which can easily dominate all of their time. Minimally, the trainees need to learn what white collar crime is, that their department has responsibilities with respect to detection and investigation of these crimes, and that there are ways in which their department can deal with it.
Because of the pressure to deal with street crime and because of the strength of tradition among officers of treating white collar crime as a civil matter, it is important that any white collar crime investigative unit develop in-service training procedures for patrolmen. Minimally, this can be done by means of special flyers, written directly for patrolmen; by brief video presentations at roll call; by direct, in-person oral presentations by investigators or by all these in combination. These presentations should be official police department activities, pursuant to department directives. It is not wise simply to wait for requests from patrol for presentations regarding white collar crime.
The presentations should focus on those instances in which an officer can respond to possible white collar crimes, be it only to turn in a report. Even better would be orienting the officers with respect to an on-going unit program, such as a coordinated effort against door-to-door peddler frauds, in which the patrol officer can directly participate. If the program involves giving patrolmen full credit for arrests which were made jointly with investigators, even more cooperation will be forthcoming.
Patrol officers should also be made aware that fighting white collar crime has a relationship to enforcement against street crime and that better relationships with (services to) fraud victims in patrol areas will make these victims more likely to cooperate with police, to report street crime, etc. Furthermore, it is important to explain to the patrolmen that white collar crime information which does not lead to arrests immediately may feed into an on-going investigation of a scheme.
Training Receptionists and Complaint Handlers
In consumer fraud agencies or any other agencies dealing with the public: directly, it is very important that the first person the citizen contacts be someone who can react effectively and appropriately to him or her.
The investigator may be the best possible person, since he or she can usually follow through sufficiently on complaints to determine whether any criminal matter is involved. However, if budgetary or organizational problems preclude the arrangement, then it is important that the non-investigator who is the citizen’s first contact with the agency be quite knowledgeable about the purposes and functioning of the organization. Otherwise, many criminal matters may go unnoticed or “referred out” to inappropriate agencies; or the citizen simply may become embittered.
In some instances on-the-job training may be sufficient to make the contact person sensitive to such criminal matters but, when possible, he or she can be given enough special training to become competent for this purpose. This training could consist in participating in appropriate elements of an investigator training program, especially in the section on complaint handling. In addition the contact person should be fully involved in programs done “in-house” by the agency, so that the contact person is kept abreast of any changes in policy, changes in law, etc. In small agencies with limited resources, the contact people can be trained in-house by setting up proactive sessions under supervision, as described below.
The following are guidelines for one type of model training program for white collar crime investigators. Needless to say, the ideal cannot be expected to be immediately attainable; nor is it always necessary that it be fully attained. However, the guidelines indicate the goals and style of such a program. It is described so that parts of it can be compressed or expanded, like an accordion. Obviously, situational differences in available resources and needs can indicate which parts should be expanded, and which parts compressed.
In much of the material presented below, there is an emphasis on simulation, practice, etc. As mentioned earlier, this emphasis is consistent with much of recent developments in training in police academies, military training. , etc.
Thus, in programs which cannot use the simulation approach for reasons of lack of resources, consideration should be given to presenting these lessons in a lecture format. The amount of resources needed is often minimal.
The trainees should be given an agenda at the beginning of the program, but the purpose of each section of the training should be presented to them at the outset. It should be pointed out to them that the training will deal with cases in a manner which reflects actual investigating practice, and that they will have ample opportunity to discuss the issues raised in the training.
Emphasizing White Collar Crime as an Enforcement Goal
Regardless of who the trainees are, it is a gross oversimplification to assume that because a trainee is present at the training program, he automatically shares the goals of the training program. He may have been sent to the program for a variety of reasons such as enhancement of the effectiveness of the agency or upgrading the performance of the least competent person. The area of white collar crime investigation may be new for some smaller, traditional, non-specialized law enforcement agencies, and there may not be a strong tradition to support vigorous law enforcement efforts directed at white collar criminals. Thus, it is necessary to frontally face the issue of why there should be such an effort, and why the trainees should want to participate in it.
In this book is introductory material, the issues involved are set forth: the economic, moral, political, and personal impacts of white collar crime and its very serious and pervasive indirect effects. On the other hand, many of the reasons that law enforcement personnel, along with many other people, have for not fighting white collar crime were also set forth in that chapter and dealt with. Training programs should start by following the same format. Not only should the reasons for law enforcement’s involvement in white collar crime be discussed in depth, but the counter-arguments should be discussed directly and forthrightly from the outset. Even some of the investigators who have had experience may be motivated with respect to one type of crime, and be relatively indifferent to another. One investigator may care greatly about automobile repair fraud, but care little about stock fraud. Another might care greatly about crimes directed at retirees, but not those with young people as victims. Some experienced investigators may have been overly impressed by the “greed” of some of the victims and how this made them vulnerable; such investigators may over-generalize and start to consider victims primarily or equally at fault with white collar offenders. Even experienced hands may have to get their concerns on the table so they can be dealt with.
If there are reservations that some of the trainees have not faced this squarely in the beginning of the training, then their lack of full commitment may interfere with learning, cause them to be less attentive, to spend less time working on readings and exercises and, most importantly, to be less likely to function well when they return to their agencies.
What they do learn may be applied by them in a mechanical, unimaginative way. Since white collar crime is constantly taking new forms, new twists and angles, investigators need to be at least as imaginative as the criminals. If a trainee is highly motivated, he will come to think about some of the problems and possibilities and go beyond the books, lectures, and exercises. But if he is not motivated, he may learn by rote, and become a routine investigator, with a set, comfortable way of handling the problems dropped in his lap. As soon as he and others like him become routine and predictable in their behavior, the white collar criminal will no doubt develop ways of exploiting this.
Another reason for facing up to the issue of the goals of white collar crime investigation and prosecution is that white collar crime investigators will encounter resistance from the people in their agencies, in other agencies, and from members of the public. They are very likely to be confronted with all the arguments for avoiding white collar crime law enforcement, and some of these arguments might be somewhat new to them. If they are not prepared to counter them, they will be embarrassed by their inadequacy; they will lose confidence in the ability of the total criminal justice system to cope with white collar crime; and may come to question the worth of their mission and goals in fighting white collar crime. On the other hand, if they have dealt with these arguments during their training and have resolved their own doubts, confrontation with indifferent or hostile attitudes toward white collar enforcement efforts can become very positive and productive. The trainees’ ability to cope with the opposition is especially important if they are or would be expected to become administrators of investigative agencies, since they would have to deal with policy and procedure in other, related agencies to fight budgetary battles, to counter indifference, etc.
Still another reason for dealing with the arguments for and against fighting white collar crime at the outset is that the trainees will no doubt have to investigate situations in which some of these arguments may appear to have some justification. The investigator may well encounter a victim whose excessive greed made him vulnerable; a victim with enough business experience to have known better than to believe the con man; a victim who chose not to read the fine print; , etc. He may find criminals whose behavior he can appreciate, for example the small businessman who attempts some desperate step to delay some business catastrophe, hoping to make it all right later. The investigator might be concerned about the economic impact of his efforts, since vigorous enforcement might result in closing down a business which employs many honest people; he may cut off sources of credit to the poor; he might force the price of some goods up by requiring that the goods be of higher quality; he may discourage potential investors in legitimate business by making them overly suspicious of all investments. Each one of these possibilities has to be faced at the beginning, as well as during the whole training program, so that when the investigator encounters them, he will be well armed to deal with them.
How to Face the Issue of Why Combat White collar Crime
This issue needs to be faced in a completely candid and open fashion. Since the trainer will probably have to face unexpected objections and arguments from the trainees, he should be a person who is comfortable facing challenges, on his feet. Obviously, he would need a very broad and deep knowledge of the area of white collar crime, and possess a fund of detailed information about the types of schemes and their impacts.
If a unit is small and therefore cannot afford to send an investigator to a formal training program, it might still be able to afford to bring a trainer into the agency for a day or two to conduct a training session.
If this is not possible, a senior investigator or prosecutor in the agency might do a fine job in larger units by a formal presentation, and in smaller ones by informal discussion.
As much time as possible should be devoted to this issue, even relative to some of the more “how-to-do-it” materials, since highly motivated trainees ultimately will learn much “how-to-do-it” on their own.
Definition of white collar crime
The definition in terms of the elements of fraud is important for several reasons. First, presenting a definition in terms of fraud, deception, etc., places the behavior clearly in the criminal area rather than the civil, and drives home the fact that the subject matter ;s wrongful activity. Secondly, the definition should make it c’ear that the concern is not restricted to such white collar crime as embezzlement, forgery, employee theft, etc., t but also covers every kind of fraud, deceit, and related abuses together with civil remedies appropriate thereto. Such terms as consumer protection need to be avoided; consumer fraud is both more accurate and more meaningful.
Examples and Case studies
The person presenting the material should give a description of the general categories of white collar crime. This will give the trainees an idea of the scope of the problem. The examples cited should have a number of characteristics.
First, victims cited should be people who are not especially greedy, who are not morally culpable victims themselves. These might be retirees buying retirement property; people being taken in by charity fraud schemes; ordinary people being cheated by an auto repair shop, etc.
Second, the victims should be people rather than large institutions. If examples are used of large institutions such as insurance companies, local government, etc., then the consequences for individuals need to be made obvious; for example, taxpayers, rather than the municipal treasury; premium payers, rather than the insurance company profit account, etc.
Third, the examples need to be of victims who could not really have been alert or aware of the scheme, even given average or even above-average intelligence. Such victims might be old people living alone who are not as alert or knowledgeable as they once were; new immigrants to the US or to the particular region; hospital or nursing home patients who are essentially at the mercy of the hospital or home; , etc. In many cases, the scheme described should be one in which even an alert person can be taken. These could be automobile repair frauds, TV repair frauds, frauds depending on the holder-in-due-course doctrine, consumer frauds in which the product will not last as long as the payment obligation, etc.
Fourth, among the examples should be those in which the trainees or people personally known to them are highly likely to have been victimized. These might include charity frauds, home improvement frauds, pyramid schemes, land frauds, etc. Law enforcement personnel, including police, are just as vulnerable to white collar crime as are others. The auto repair fraud area may interest most officers, since probably they have all been victimized and their jobs involve the use of automobiles.
Impact
The comparison between the economic losses through street crime and white collar crime should be emphasized. Furthermore, the ways in which white collar crime may contribute to a general breakdown in the respect for legal and ethical principals, and therefore facilitate or provide a rationale for street crime need to be pointed out. Cynicism about the even-handedness of law enforcement because of its concentration of efforts against street crimes is an impact that may be directly material to the trainees and their agencies. Any information about local, city or regional impact will be especially helpful. As in many other aspects of the training, the trainees will be able to provide many examples from their own backgrounds and experience.
Rebuttal to the reasons for not fighting white collar crime
In this section, the trainer needs to be especially alert, secure and knowledgeable. Each argument against involvement needs to be articulated fairly and completely. Any effort to make what even appears to be a biased presentation will tend to undermine the credibility of the total training program. After each negative argument is presented, there needs to be a thorough and complete rebuttal. None of the negative arguments should be treated lightly or contemptuously. The negative argument can be made in completely good faith and should be treated as such, especially since many of the trainees no doubt agree with some of them. No attempt should be made to gloss over the fact that white collar crime investigations can be time-consuming and frustrating, but this should be put in the context of both the benefits of white collar enforcement and the impacts of these crimes. It should be kept continually in mind that when one squarely faces such difficulties in training, it is, at the same time, an opportunity to instruct trainees as to how they can best deal with obstacles they will encounter in actual enforcement operations.
Before the presentation of the negative arguments and the rebuttal (or exploration) of each in turn, the presenter should tell the trainees that there will be a full discussion of these arguments when he is through. At the end of his presentation, there should be about two hours left free for a full discussion of the issues presented, with as much encouragement as possible for the trainees to express their reservations. If necessary, it may be helpful to have someone other than the presenter direct the discussion, with the presenter contributing to the discussion as appropriate. About 15 minutes before the end of the allotted time, the presenter should give a critique of the issues raised, then summarize the points he made earlier.
First principles in How to Fight White collar Crime.
After the basic issues described above about combating economic crime have been faced and dealt with, the trainees are ready to get down to principles and to cases. Such principle and case presentations can also be done in-house in small agencies by having a senior investigator conduct a training session. Since much of the training consists of a presentation of actual cases, the senior investigator does not have to spend a great deal of time preparing lectures, but should use cases that he has worked on.
The basic format of the training is the presentation of principles of investigation which are illustrated by cases tied to the principles. The trainer should present each principle first in general terms, then he should describe a case which exemplifies the application of the principle; and then re-articulate and discuss the principle in the light of the case.
He should repeat this for each of the principles. One principle might be to use preliminary investigations as a first reaction to a complaint or a report. Another might be the value of getting information from other agencies.
The presentation of the cases should be detailed descriptions of the actual sequence of events in law enforcement agencies dealing with actual cases, from the receipt of the initial information or complaint, through the investigation, to the prosecution. All of the false leads and difficulties should be described in detail, and mistakes as well as successful tactics. In other words, what is laid out should not be merely a logical description or analysis of the scheme, crime, etc., which could be constructed after the fact but should be in the style of a good detective story, but with ordinary fallible human beings as the detectives, and not super-sleuths.
The purpose of such presentations is to provide a first brush, concrete example of a principle or technique. After presenting each case, the trainer should return to a discussion of the general principles of investigation of white collar crime, illustrated by the case. The cases should be selected and presented with a number of actions and guidelines in mind, as follows:
None of the investigative techniques illustrated should require technical knowledge beyond what the ordinary person would be expected to know. Technical knowledge should be developed later in the training course. At this point in the training, the objective is to communicate some broad principles, not to get the trainees to know how to trace a check, read a balance sheet, etc. The trainer should tell the trainees that they will be given time to delve into the technical details later.
Materials from the cases should be presented either concretely and, if possible, audio-visually. Documents, reports, mug sheets, photographs, etc., can be presented. Any tape recording legally obtained might be played, though legal advice should generally be sought before doing so. If concrete evidence is relevant, like a phony security, useless therapeutic device, a rolled-back odometer, etc., these should be presented. Such audio-visual and concrete presentations will make the case very real, maintain the trainees attention, and begin to familiarize the trainees with the type of documents, evidence, and procedures they are to use.
The use of such props and projection devices need not be expensive, since most of the materials are readily available to most agencies.
Charts and diagrams illustrating the organization of white collar schemes should be used for example, who controlled whom, what parallel series of events occurred, how multiple similar events were fitted together to make a showing of deliberate wrongful behavior. Such chart presentations will not only facilitate communication and add interest, but will also illustrate how the trainees can themselves prepare charts and diagrams for the management of complex investigations and for presentation to prosecutors, judges, and juries.
If at all possible, the cases should be those with which the trainer is directly and personally familiar, preferably from having been the investigator on the case. Such personal involvement will make the cases more alive and vivid; the trainees will give it more credibility; the trainer will be more able to answer probing questions; the trainer will be more motivated and secure in his presentation.
The trainees should be encouraged to ask questions and make comments throughout the presentation of the cases, following on and reinforcing the pattern of open discussion developed in the previous training sessions.
In case presentations which involve issues such as why certain lines of investigation are followed, or the use of certain techniques, it will be important to discuss not only why particular decisions are correct or incorrect, but also the process through which these decisions are arrived at.
After the principles and cases have been presented, the trainer will give the trainees a list of the principles illustrated and discussed.
SPECIAL ISSUES AND PRINCIPLES IN WHITE COLLAR CRIME ENFORCEMENT
Legally Speaking, What is a White collar Crime?
The first concern should be orientation as to what wrongful activities constitute white collar crime and related abuses–against the backdrop of the elements discussed in this Book, and the statutory and case law applicable to the subject matter of concern to the agency or unit, e.g., securities law enforcement, consumer protection, etc. If the agency cannot afford to send its investigators to a formal training school, a local prosecutor, especially one with whom the unit works regularly, can make a presentation.
There are some advantages to such presentations by local prosecutors, since local laws and the subtleties of the particular prosecuting style can be communicated. The challenge of preparation for such a presentation will provide the prosecutor with motivation to develop or reinforce his own legal skills in a way directly relevant to white collar crime enforcement efforts, as well as receptivity to such cases, and his participation should create valuable personal relationships with the trainees which could payoff when they come to him with their cases. Copies of the outline of the presentation should be given to each trainee, preceded by a list of the major points to be covered.
While investigators should not allow themselves to be hamstrung by highly legalistic concerns as to what is or is not a crime when they see serious wrongful activity, it will be important that they know about different types of statutes which provide prosecutorial options; they should not get into a rut with respect to a narrow group of statutory violations, or get discouraged because they cannot easily see a statutory violation where they instinctively know there is criminal activity.
The presentation should therefore cover general laws against fraud, and their relationship to the elements of white collar crime as well as particular laws for particular types of fraud and general theft statutes which might be applicable. They should know about bribery and conspiracy statutes, as well as those which proscribe tax evasions and obstruction of justice. Furthermore, the trainees should learn about civil laws and administrative law, so that they can work with either type of approach, or relate to agencies which can handle non-criminal approaches if their own unit deals only with criminal matters. Since the involvement with civil matters may be a new factor for many of the trainees, it is especially important that they learn about the potency of civil remedies, so that they can help to develop alternatives when criminal remedies are either not possible or when a public good might be better accomplished by a civil action. It is very important that the investigator become fully aware of the fact that civil remedies are not restricted to suits between private parties but are also remedies which government can invoke on its own behalf, and on behalf of white collar crime victims.
Trainees should not be given the impression that they are locked into legal technicalities of a limited set of statutes. They should learn that however important it is to know certain statutes, they or the prosecutor may be able to find some additional statutes to apply in cases which do not appear to fit the statutes they are most familiar with.
Sensitivity to the legal aspects of matters under investigation can also assist the investigator in knowing what other agencies can help in the investigation and prosecution. For example, if a case involves investment in some joint venture, the SEC may have jurisdiction even if no stocks or bolds are sold. Many cases illustrating these points should be presented, using as wide a variety of statutes as possible. Since the trainees may have to become trainers of other law enforcement personnel when they return to their agencies, they need to have these points very strongly developed. This presentation should be of the lecture-discussion type, again with ample time for discussion, since it is important that the presenter gear his level of instruction to the level of legal sophistication of the trainees.
How Does One Deal with Complaints and Other Sources of Information?
Trainees should be encouraged to trust their judgment as to whether or not a complainant has been victimized by some white collar crime scheme, and whether to start to gather information where they believe there has been such victimization. They should be encouraged to assume that where there is a wrong there is quite possibly some remedy if enough of the facts are assembled. There are a number of ways of training with respect to this starting point. Most common is the lecture approach, which calls for no special discussion here. Another training alternative involves simulation or role playing, some techniques for which are considered below.
The starting point of an investigation is most typically a telephone call from a citizen, a lawyer, or a person in another public agency, such as a complaint handler. The trainer could lecture on the salient points about responding to such calls, but a more effective way would be to use a simulation approach. Accordingly, the training should consist of actual demonstration of, and practice with, such calls. Such simulations can be done in large training programs or in small agency in-house training, since the cost is minimal, although some time may need to be spent preparing the simulation. One way of proceeding is for the trainer first to discuss fully some point or principle. Then he can proceed with a demonstration in which he acts as an investigator (or complaint handler) taking a call. The role of the person making the call can be played by an assistant trainer or by one of the trainees. The latter should be a volunteer from the class. He should be told in advance that his involvement is not a test of his ability, but purely a learning experience for him and the others. The whole group of trainees who will be observing the demonstration should be told what the investigator’s and agency’s roles are supposed to be, but not be told anything about the complainant. He should be given a one-page description of his complaint or information, and an indication of why he is calling the particular agency. The situation should be carefully designed to illustrate the basic issue the trainer discussed briefly before the demonstration, such as choice between the civil vs. criminal remedies. After the trainee has and digested the material, he should go to the front of the class, and sit down at one of two dummy telephones (or any reasonable facsimiles) placed in front of the class, with his back to the other phone. The latter phone is manned by the trainer, who also turns his back to the trainee. By not looking at each other, visual cues are minimized. The trainee then places his call to the trainer, and they enact the actual call.
When the call is over, the trainer, trainee and the other trainees should have a full and free discussion of the issues raised by the demonstration. Obviously, the issues that the situation is designed to illustrate should be most prominent in the discussion, but others that emerge either in the actual enactment or during the discussion should also be dealt with.
After two or three such demonstrations, using different types of calls with different trainees enacting the role of complainant or informant, the trainees can take on both roles in a series of demonstrations. The trainee who enacts the role of investigator should be given a short description of his role and agency. This description should be read aloud by the role-taker, so that the other trainees will understand his side of the conversation. Once again, it should be made clear that these demonstrations are not tests, but are being done for training purposes only. Hopefully, each trainee will get a chance to play each of the two roles. The situation should be designed to raise a whole series of issues, such as those cited above. If some issues have not been brought out sufficiently because of the way that the complainants make their calls, then the trainer should repeat the situation, playing the role of the complainant himself.
This training method offers several benefits. First, the trainees will see the concrete relevance of the legal and investigative principles that have been presented up to that point in the training.
Second, the trainees can learn of the problems involved in application of the principles.
Third, they can learn some of the factors to keep in mind in deciding how to react.
Fourth, practicing the role of the complainant or informant will enable them to handle such calls by having a better basis on which to predict the behavior of the callers and thus deal with them better.
Fifth, having a full and free discussion minimizes the possibility of the trainees simply learning a routine way of handling calls; they will be more likely to understand the full ramifications of a call.
Sixth, by observing others, they can learn of the many possible ways in which problems can be dealt with, so that they can have a large repertoire of possible reactions.
Seventh, the interest level and involvement of the trainee can be kept at a high level.
Eighth, the trainees can make their mistakes in a situation in which the mistakes can be pointed out and corrected with no damage to their standing in their agency or damage to the agency and public.
Ninth, when the trainees begin to take calls themselves, on returning to their agencies, they will feel more secure because the experience is not unfamiliar to them.
The following are examples of descriptions that could be given to the role players:
Citizen Complainant
You have just returned from a visit to your aged father in a nursing home. When you stopped in the office to pay your bill, you happened to notice on the nursing home copy of your accounts, but not on your copy, that they were charging you for a hearing aid for your father, when, in fact, he does not use one. When you protested, the cashier claimed to know nothing about it. This is the first time you had noticed the charge, but were not sure whether it had occurred before. Nevertheless, you did not want to jeopardize your father’s treatment, and paid the bill with a check. You thought about this on the way home, and considered whether this was some sort of fraud. You decided that you had better call the consumer fraud division of the district attorney’s office. You now make this call. (You may fill in details of your situation as you wish.)
You are an investigator for the fraud division of the local district attorney. The policy in your office is for investigators to take telephone calls from citizens. Up to this point, you do not know of any frauds in the medical or health area.
Since some complaints might come in writing from other agencies, parallel exercises can be developed in securing written complaints from citizens or from other agencies. The trainees would then practice how to answer such letters. Before the sessions are over, the trainees should be making lists of the principles which the training was designed to point up. This list should be discussed at the end as a summary review, and as a way of assuring that all the principles are covered. The role playing, practice sessions just described do not have to be conducted in a formal training program, but can also be conducted in-house by some member of the staff or the supervisor in either large or quite small agencies. Some preparation of the training material is needed, but again, the content of these materials can be developed from the actual work of the agency, and therefore should not be time consuming or difficult to prepare.
What Sort of Information to Look for, and Where to Look for it
Almost important investigative skill is to recognize what information to look for, and where to look. The trainer should present to the trainee a series of talks which contain the following in general terms: a) What sorts of information are needed to determine whether a crime has been committed; b} where such information might be found; c) the form in which it might be found; and d) problems of gaining access to it.
Throughout the talks, there should be identification of points in the investigative process at which it would be especially valuable to consult a prosecutor or agency legal adviser, and the particular legal issues which might be raised at these points. The trainer should especially emphasize the distinction between a preliminary investigation on the one hand, in which the purpose is to determine whether a complete investigation is worth pursuing, and a complete investigation on the other. The trainer should distribute copies of investigative questions, preferably in tabular form, and a list of agencies which might have the information to answer each question, an indication of the form in which the information might be found, and some comments about special problems in gaining access to such information.
After passing out copies of such investigative questions, the trainer should lead a discussion regarding each of the items. The trainer should invite the trainees to interrupt at any point. The concentration should be on the problems of where to look, not on the detailed format of the records in which the information is kept. Also, the trainer should give as many tips as possible about how to gain access to sources of information, for example in public records, how to deal with custodians of records who could be helpful, etc.
After the discussion of the tables is complete, the trainer should present an information-seeking problem for the group to work out as a total group project. The problem should be one in which some difficulties on an investigation have begun to develop and the problem is where next to look. This too can best be developed from the trainers own experience, both because it will have the ring of truth to it and will require less preparation time for the trainer.
After the example has been discussed, the trainees should be divided into groups of three each to work on a series of such problems. The answers should indicate where to look or, with the possibility of a rank-ordered series of sources in terms of either the ease of obtaining information or its utility, the forms in which the information might be found and ways to gain access to this information. Each group should be given the same set of problems, and a fixed time, such as 20 minutes, to complete work on all the problems. Then each group should designate one person to report its answers back to the total group, with the trainer leading a discussion. This process might be repeated several times in one session, with the problems ranging from those in preliminary investigation to complete investigations and gradually becoming increasingly difficult.
This procedure can be used both in large, formal programs, and in smaller, in-house ones, since there is minimal cost involved and because experienced investigators in the agency can do the training.
Learning About Various Business Organizations.
Up to this point, the proposed training program has not gone into detail on the functioning of the business organizations with which white collar crime investigators frequently come in contact, either because they are possible vehicles for fraud, or sources of evidence. The reason for delaying a presentation on this point is that the trainees first need to see the legal relevance of gathering certain types of information so that they can appreciate the meaning and significance of all sorts of records. Once this has been done, the trainer is ready to turn to description of different types of business organizations. Among those that should be dealt with are the following: retail businesses, wholesale businesses, home and appliance repair businesses, manufacturing and contracting businesses, real estate, medical facilities, securities agencies, banks. Of course, training programs for specialized agencies will want to focus on those business areas with which they regularly deal in their work. If possible, the presenter should be an investigator with experience with the types of business discussed, rather than a representative of the business world.
If the training program is being conducted in-house in a small agency, such an investigator may be recruited for a few hours from another agency, if none is available in-house.
In each case, the following information should be presented: 1) the various parts and functions of the business, including a glossary of business terms; 2) the records which are kept; 3) the laws governing the business, both criminal and civil; 4) the governmental organizations at the local, state and federal levels having particular legal and regulatory jurisdiction over them; 5) outline of the types of schemes characteristic of each type of business; 6) some special indicators of crimes in that type of business; 7) outlines of special investigating issues; 8) subpoena and other powers for securing information from these businesses. The trainees should be given outlines of the presentation, following these guidelines, and giving some of the salient information in concrete detail. In the presentation, examples of the forms used by businesses should be discussed.
After each type of business is discussed, a concrete investigative problem relating to that business could be presented to the trainees. The problem should involve one in which it is not necessary to develop information from some agency outside the business organization itself, but which should present some problems within it, such as determining if the same real property was sold more than once, finding records of use of a prescribed therapy, etc. The trainee group should be divided into three-person groups to work on the problem no more than 15 minutes, and then report back to the total group. Again, preparation time for such an exercise should be minimal, since the best source of problems is the investigator-presenter’s own experience.
Government Agencies
It is obviously necessary for the investigators to learn about federal, state, and local agencies which are either directly involved in or can help in the fight against white collar crime. Among the groups which should be described in detail are:
Federal
FBI, SEC, Postal Inspection Service, FTC, IRS, FDA, investigative branches of HUD, HEW, Department of Labor, Agriculture, etc., US Attorneys.
State
AG, Consumer Protection in AG’s office, Department of Licenses,State Police, Anti-Crime Commissions, State Securities (Blue-Sky) Agencies, Agencies where corporations must file to do business, where charitable organizations must file and disclose financial data, and where business names must be registered, etc.
Local
Consumer Protection agencies, license departments dealing with weights and measures, etc.
For each agency an investigator from that agency should give a presentation, explicitly providing the types of information indicated below. The list of types of information needed should be given to agency representatives well in advance, so that they can come fully prepared.
They should be told which other agencies will have already made their presentations, and generally what they are expected to present. They should also have a general knowledge of who the trainees are, what has been imparted to them up to that point in the program, and how the sessions have been conducted. The agency representatives should understand that the more realistic and practical their presentations, the more likely they are to gain the cooperation of the investigators in future interactions. They should understand that any one of the trainees might later be the very investigator who will call on him for help, and vice versa. It is very helpful, though not absolutely essential, that these representatives of the agencies make the presentations. Every effort should be made to avoid standardized, public relations descriptions.
The information which is to be provided is as follows:
- Goals of the agency
- Criminal and civil jurisdiction of the agency and geographical jurisdiction
- Organization of the unit, especially the role of their own investigators
- Types of information which they possess
- Special investigative techniques employed by the agency
- Information systems of the agency
- Legal processes involved in transfer of information to and from the agencies
- Issues of overlapping jurisdictions, including task forces or strike forces
- Organizational relationships to the branches of the same level of agency (FBI to other federal agencies)
- Problems that these agencies have had in dealing with other branches of government, at any level
When federal prosecutors make presentations, they should give local and state investigators some information about relevant federal laws, the jurisdiction of federal courts, and the overlap of laws and jurisdictions between federal, state, and local levels. State agency representatives should give parallel information in presentations to local law enforcement training efforts.
- Lists of names and places to contact in each geographical area, and what their specific competencies are within the total agency.
- Ability to supply expert witnesses.
- Ability to develop contacts in other agencies.
The supervisor of the training program should check each agency’s proposed presentation to eliminate duplication and to make certain that these guidelines have been followed. An outline of each presentation should be given to the trainees in advance, following the above guidelines, presenting detailed concrete information.
The regular trainer should be present during the invited presentation, while the invited trainer should remain present as a resource person for the rest of the time his agency is discussed.
After each of the agencies has been described and discussed, a concrete investigative problem concerning that agency should be presented as discussed above. However, in this case, the trainee groups should be organized to provide the maximal variety of agencies and professions in each of them. For example, local, state and federal trainees should join together; or a lawyer and two investigators should work together.
The representatives of these other agencies should be solicited for sample problems from their own experience, from which the concrete investigative problems for the attention of the trainee group can be selected.
Private Anti-White Collar Crime Agencies and Sources of Information
Many industry-supported or public interest groups can be of great assistance to the investigator both as sources of complaints and as sources of information. Examples of the kinds of private organizations which could be helpful are: Insurance Crime Prevention Institute, Better Business Bureau, Credit Card Investigators, Consumer Union, telephone company investigative units, etc. The trainers should be investigators who have had experience with these groups. In in-house training programs in small agencies, such investigators may have to be recruited from other agencies. Again, costs for such presentations are minimal. Representatives of these groups should be brought in only after the experienced investigators have made orienting presentations to the trainees, since the former may tend to present a rather glowing view of the organization and may not present the material necessary for investigators.
For each private group, the following information should be presented:
- Purposes of the group, both official and unofficial
- Funding and governing of the group.
- Legal status of the group
- Group’s relationship to government
- Group’s relationship to business
- Organization of the group
- Materials for public distribution
- Types of information they can generate
- Forms in which the information is available
- Difficulties in getting cooperation from the group
- Subpoena and other powers in getting information from these agencies
- What the private group can do for local law enforcement and what local law enforcement can ethically and legally do for the group as well as policy considerations involved in such mutual helpfulness
- Ability to provide expert witnesses
- Ability to develop contacts in other organizations
The trainees should be given outlines of the presentations, following these guidelines and providing detailed, concrete information where appropriate.
A concrete investigatorial problem should be presented to the trainees with respect to the potential benefits and problems of working with specific agencies, as was done with respect to internal business problems in the earlier sessions. It would be advisable to alter the composition of the small trainee groups from prior sessions, in order to open the trainees up to new ideas and insights from interacting with different people.
Relationships between Investigators and Prosecutors
The most crucial relationships that an investigator has are those with the prosecutor or litigating attorney who will take his case to court or before a regulatory or administrative tribunal, because the best investigation is of little value if not used, or if not used properly. Since these relationships are complex and often difficult, it is important that they be given special attention in training. An effective approach would be to have two prosecutors or litigating attorneys make presentations. One would be a prosecutor or attorney who has worked with investigators in his own agency as part of a team, and the other would be one who has worked with investigators from other agencies. The reason for this split is that the problems may be quite different in each case. For in-house training programs, the prosecutor with whom the investigators are most likely to have to work should make the presentations.
The prosecutor (the term, as used below, should be read to include the litigating attorney) should be told in advance what has been covered in the training course, so that he does not cover the same material and thereby tend to appear to talk down to the trainees, and should be asked to cover his perceptions of the following:
The stage in an investigation where consultation with a prosecutor would be valuable.
The stage in the development of a case where a prosecutor should consult with an investigator.
The types of issues or problems about which it is most important for an investigator and prosecutor to work together.
The types of problems which investigators are likely to have with prosecutors. (For this topic, the trainer may have to “coach” the prosecutor or make a supplemental presentation himself.) The prosecutor should suggest some possible remedies.
The types of problems which prosecutors are likely to have with investigators, with some possible remedies.
Prosecutors’ point of view on prosecuting borderline cases, plea bargaining, sentencing, etc.
Legal issues, such as search and seizure, motions of discovery, disclosure of confidential sources, etc.
Ample time should be allowed for discussion of these issues, with the main trainer present to contribute to and monitor the discussion. He needs to actually participate so that he has a chance to express and to discuss some of the problems that investigators have with prosecutors. Trainees may be reluctant to do this.
After there has been ample time for discussion, the trainees should again be broken up into small groups. This time, the groups should be organized so that if there are any lawyers among the trainees, no more than one is assigned to any group. The guest trainer (prosecutor) might join in one of the groups. The groups should be given a problem involving face-to-face interaction between a prosecutor and an investigator. One of the group members should be assigned the role of prosecutor, another the investigator.
If there are any lawyers in the group, they should be assigned the role of investigator so that they can learn the subtleties of the viewpoint and work of the investigators and thereby learn to communicate and cooperate better with them. The other group members would be observers who will later report back to the total group on the interaction which took place. Then the participants would receive written descriptions of their roles, the problem, the issues, etc. These descriptions might even include something about anticipated situations, such as investigators’ perception of the reluctance of the prosecutors’ office to work on marginal cases, the lack of knowledge of white collar crime among new, young prosecutors, flaws in the quality of evidence gathered by some investigators, etc. Again, preparation of these descriptions should not be difficult, since they should arise from the prosecutor’s own experience. The trainees would then enact the roles, the observer noting some of the issues involved and possible solutions. The observer would then report back to the total group. If time permits, several such exercises might be enacted with different situations, and with the trainees shifting roles.
SPECIAL INVESTIGATIVE TECHNIQUES
In this section we will discuss specific types of investigative techniques, rather than specific organizations to involve in investigations. Some of these techniques will apply more to some organizations than to others, but are sufficiently general in application to be treated separately in training. Many of the training procedures described below can be used in-house by either bringing in experts or by using agency personnel. Obviously, agencies with limited resources may very well use such in-house programs. In presenting each technique, a list of types of information and leads which can be garnered from that type of investigation should be presented.
Investigative Accounting
The depth of training in accounting that is necessary for investigators will vary with their agencies, the availability of professional investigative accountants, the types of cases their investigate, etc.
Nevertheless, all investigators should have enough knowledge of accounting to know when to recognize that accounting help is needed, to know what sorts of questions can and should be put to accountants, and to know how to evaluate what accountants give to them. This knowledge is essential because most accountants can best help the investigator when they are oriented in what to look for. This training should be done in two parts:
The first part should be conducted by an investigator-trainer who has used accounting help, and can give his perspective on where and how to call on it. Then bring in the investigative accountant. The second part should be conducted by an investigative accountant, or an auditor who has worked with law enforcement rather than an accountant or even an auditor who has only general experience. He should illustrate his lecture with specific cases.
The trainees should be given a crash course in double-entry bookkeeping. The courses should contain not only many examples of ledgers, balance sheets, etc., but the students should have individual practice cases of simple double-entry accounting that they can work on and then compare to the correct way. This work should be done individually and they should score their own exercises.
Tracing of Money
The trainees should receive a detailed description of the ways in which money and checks are processed through and among banks and other businesses, with a glossary and guidelines. The trainees can be given individual exercises of bank records, credit card records, etc., to trace money. Copies of such material used in actual cases can be readily made, thus keeping costs down.
Use of Newspapers
The use of media, principally newspapers, can be very helpful. Hardly a day goes by, in the Washington Post, the Wall Street Journal, New York Times, Los Angeles Times, etc., when there are not a number of stories and advertisements which have rather substantial white collar crime implications. If, during a training program, there could be assignments, challenging the students to find all of the stories with such implications, and hold them for close to the end of the course, for discussion, analysis, etc., it would be quite exciting; it would keep the courses from getting into a rut; and, it would be a very real challenge for the instructors. Students and teachers could argue about what potential violations were posed by particular stories or ads, what techniques might be used if they were to go out on a proactive investigation, etc.
Computer Fraud.
Since computer fraud and cybercrime is on the rise, it is important that investigators become at least familiar with the functioning and issues involved in them, without becoming computer experts. They should know enough to recognize when they need to enlist a computer expert and what questions to ask him. Unlike other training topics, this area is one in which a simple straightforward lecture may be the most appropriate method, along with visual presentations.
The lecture should include a presentation of the importance of computers in investigations, crimes, and basic knowledge of different systems, knowledge of computer terminology, use of software in business and accounting, and the types of fraud.
Current cybercrime trends, collection of technology as items of evidence, and on-line investigative tactics should be included.
Shopping and Decoys
The material here can be presented in lecture form, but it might be preferable that the trainees be given practice in shopping or inviting a solicitation by a fraud operator by a variety of role-playing techniques, shopping with respect to investment frauds, consumer frauds, land frauds, etc. One of the aspects of the situation that needs to be emphasized should be how to make the ‘shopping’ as believable as possible to the suspect, such as the shopper’s dress, type of person doing the shopping, background knowledge that a real shopper would have, plausibility of the reason for being in the shopping situation, etc. Another aspect is making the investigator as effective as possible in gaining information from observation and from conversations, to gain the most from possibly fraudulent statements by suspects. The trainees also need to be made aware of the possibility of eliciting such statements from as many people in the business establishment as possible, from both underlings and supervisors, by means of appropriate questioning and probing. In addition the trainees should be made fully aware of the dangers of inadvertently crossing the line between giving white collar offenders the opportunity to do their thing, and engaging in entrapment. In states in which a recording can legally be made of such conversations, techniques for the proper use of the equipment should be practiced.
The use of decoys themselves is much more complex. If training in the use of decoys is to be done properly, it should be done completely, since half measures in the use of decoys are worthless. Thus, the training should be done in a police garage, electronic shop, etc., rather than in the usual classroom setting. The whole process of setting up a decoy car needs to be examined and observed from both a legal and technical point of view, including the use of experts.
Another form of shopping is the reading of mail advertisements, online ads, and other advertisements. The alert investigator can catch many frauds by such proactive measures. Examples of fraudulent advertising, investment invitations, etc., can be examined by the with descriptions of the cases that were developed on the basis of the spotting suspicious advertisements. The trainees could individually work on sets of models of fraudulent and honest advertising, mixed together, with the task of trying to pick out those likely to be fraudulent. Their opinions could be checked against the actual cases and the indicators of fraud could be discussed.
Interviewing Victims and the Informants and Witnesses
Trainees need to develop skills in interviewing beyond the initial contact. This section in the training should be introduced with a discussion of the differences between interviewing victims, informants and witnesses on the one hand and interrogating suspects on the other. The trainees should know that interrogation of suspects will be treated separately.
The trainer should present some general guidelines for interviewing witnesses, as indicated in previously this manual, but should not spend more than a half hour on these general guidelines. After the general discussion the trainees should again break up into small, three-person groups, to work on exercises in interviewing. Two members of the group should be given short descriptions of the roles, with the third acting as the observer-commentator. Such descriptions would not be very difficult to prepare since they emerge from experience. Each of the participants can be given paragraph descriptions of the situation from their points of view.
The practice situations should be as difficult as possible, such as a victim who is very reluctant to admit having been hoodwinked, a witness who also was partially involved in a scheme, an informant whose motives are highly questionable, a potential witness who may have been bought off, a witness who may not stand up in court, a victim who might be using law enforcement as a collection agency, etc. It would be well to have a series of such problems, with the trainees rotating their positions, and the observer-trainee commenting on the performance after each problem. Among the criteria for the trainer’s comments on trainee performance should be the following:
- Did the interviewer secure detailed, explicit information?
- Did the interviewer secure or learn about all relevant documents?
- Did the interviewer determine something about the motives of the witnesses?
- Did the interviewer establish enough rapport to assure continued cooperation with the investigation?
- Did the interviewer develop any further leads?
After the small groups have worked through a number of such exercises, then one member of each group should report back to the entire trainee group, but unlike the previous sessions) the group’s reporter should emphasize what effective techniques have emerged from the exercises, such as techniques to sooth a ruffled ego, to cut through a facade, to test for reliability, to trigger recollections as to possession or location of documents or physical evidence, etc.
The same sorts of exercises can be done with interviews with government officials, other investigators, businessmen, with special concerns for the issues involved with interviewing these people, such as their vulnerability to pressures, their concern for their own organizational needs, political problems they may have, etc.
At the end of the session, each trainee should receive a list of principles involved, and the trainer should discuss them, referring back to the role playing experience as a review-summary and as a way of making sure all the points have been covered.
Interrogation of Suspects
The trainees should first be made fully familiar with the problems about whether and when to approach a white collar crime suspect, especially since the stage of the investigation at which an approach is made may be quite different from what would be the case in non-white collar crime investigations. Furthermore, the trainer should emphasize that the suspects here are generally brighter, more verbal, more knowledgeable, and more personable than non-white collar criminals. The importance of approaching the suspect from a position of maximum strength in advance should be emphasized. Although these points can be made in a lecture, the same type practice exercises as were used in the interviewing could also be used here.
There are, however, some special problems in using such situational exercises which should be carefully considered before setting them up. The main difficulty arises from the fact that white collar suspects often have higher community status than ordinary suspects, and are surrounded by many props to support their facades of legitimacy, all of which will tend to place the investigator in a very difficult position unless his case is already well developed and he has a very strong sense of personal security which will sustain him in such situations.
Any situational exercises should, therefore, be preceded by a lecture and discussion period in which these issues are gone into in detail, with stress on the point that white collar criminals are criminals, that the key to successful interrogation is intensive preparation and such command of the facts of the case as will strengthen the role of the investigator and undercut the confidence of the suspect being interrogated.
In the event that training films can be developed to deal with the challenge of suspect white collar crime interrogation, as has been done in police training situations where effective simulation is difficult to achieve, this would be a most useful training device. It is to be hoped that such a training film or video-tape could be prepared for use in the future to cover settings such as richly furnished lawyers’ offices, impressive suspect homes, and dealing with such types as the glib talker, the bombastic intimidating type, and the cultured and cultivated operator who allows his surroundings and carefully dramatized activities to misleadingly undercut an investigative examination or interrogation.
However the training in interrogation methods is conducted, stress should be placed on actual case examples of “impressive” suspects, on how they attempted to spin investigators, what tactics were used to cope with these attempts, and what types of preparation and countering methods were involved in both successful and unsuccessful investigator action to obtain information in the face of the suspect’s evasive and misleading maneuvers.
At the end of the training session dealing with this subject, the instructor should pass out a list of the principles involved in interrogation, the list being discussed by the trainer as a review / summary and as a check on coverage.
Organizing Investigative Information
It is obviously possible for an investigation to produce so much information that it would be very difficult for one person to keep track. The use of computers and other techniques to store information has been discussed. But there are ways in which information which is either stored in a computer or in an investigator’s notes can be organized so that the organization of a complex scheme can be visually displayed and thus more readily apparent to the investigator. He can thus see patterns, and identify gaps in the investigative process, etc. This problem of keeping track of all the information is a vital one, not only when schemes are complex, crossing between and among businesses and people, but when a number of different investigator agencies become involved in the investigation. Very useful devices for keeping track of both the scheme and the information about the scheme are Link Network Diagrams and Time Flow Diagrams. Trainees should be instructed as to the preparation and use of such diagrams.
Decision-Making in the Course of an Investigation.
One of the basic problems in any investigation is the decision as to whether to continue to investigate, how to continue to do so, and whether to join with other agencies, etc. These problems were discussed earlier. The purpose of training investigators in these matters is not to advocate particular ways of solving these problems. The purpose is simply to get the trainee to be aware of possible alternatives and considerations, and to give him some practice at making such decisions. In this way, he is more likely as an investigator to give some thought to his decisions, to stop more frequently to think through next steps. The trainer should review the material by presenting the trainees with lists of alternative actions, and lists of considerations for making such decisions. This should be done in a discussion rather than a lecture format, if at all possible.
After these issues have been discussed, each trainee should be given a series of practice exercises of cases at various stages of development. Charts might be used in some of the more complex cases. The trainee’s job is to make decisions, and to write out his rationale for doing so. All the trainees should receive the same set of exercises. After all of the trainees have completed their exercises, the trainer should conduct a discussion of the decisions and the rationales, case by case.
FINAL EXERCISE
In the course of a training program, the trainees will have dealt with parts or aspects of the total investigative process, though hopefully many case examples will have spanned much of the process. If the time and resources are available as part of the training program it would be very desirable to put all the parts together in a simulation of a single investigation so that they can deal with the parts in conjunction with one another. In this way, they can learn better how to integrate the various phases of an investigation. They can learn when to approach other governmental agencies, when to approach witnesses, when to collect different types of documents, when to approach the suspect or suspects; they can learn how to use information gathered at one point in the process to make decisions about how to go farther; they can learn how to integrate the information; and they can learn how to integrate it to make the best prosecutorial case. Working through a total investigation would also give the trainers and the trainees a chance to learn about any inadequacies in the former’s performance and to discuss ways of correcting these inadequacies for future training sessions. Furthermore, the trainees at the beginning that there will be a final exercise of this sort would give the total program a goal from the start, and a sense of completion and closure at the end of the program.
One way of performing this exercise is to take an actual case which is quite complex in the sense that it involved many discreet steps in the investigation; one where many different investigative tools were actually used, and where many interim investigative decisions had to be made. The trainer should be thoroughly familiar with the case. He should then present the trainees as a group with the first report as it came into the unit. He should then ask the trainees as a group what the next investigative step should be: a check of files, an interview, a check with another agency, etc.? Then after they have discussed the matter thoroughly, they should reach a consensus on what the next step should be. The trainer should enter into the discussion only if a major factor is being overlooked by the trainees. After they have made their decision about next steps, the trainer should present them with the information, if any, they would have obtained from that step. He should be able to do this from his knowledge of the case. This process is then repeated as often as warranted. The trainees can decide that the next step can be consultation with a prosecutor, expert, etc., and can develop Link Network Diagrams or Time Flow diagrams. The case ends when the trainees decide to present the case to a prosecutor.
This exercise can obviously be repeated a number of times.
SUMMARY
The key principles to be kept in mind in the training of white collar crime investigators are:
- Develop in the trainees a sense of the importance and worthwhileness of their mission
- Ground all training exercises in actual cases, to the maximum possible extent
- The trainees should have the opportunity to discuss issues with the trainer as much as possible
- The trainees should participate in practice exercises as much as possible
- Consciously promote trainee interactions which will continue after the course is completed
- Emphasize interaction between the investigative agency and other public and private agencies
- Stress the needs of the prosecutor or litigating attorney, who must “buy” and be able to rely on the investigators’ work
By adherence to these principles, and careful selection of trainees and those who will train them, successful training outcomes can be expected.
STUDENT CASE STUDY SEVEN – Hollywood Film Scheme Results in Unhappy Ending for Investors 03/17/15
Assignment
- Read the case study and then use open sources to research the case. Write a brief summary of any convictions or sentences given to the perpetrators.
- Identify what particular element of this case makes it a fraud rather than a legitimate failed business.
- What special skills would an investigator need to investigate this type of crime?
Overview
The owners of Gigapix Studios told investors they had a sure thing: They were going to make an animated version of the Wizard of Oz called OZ3D, and those who got in on the ground floor — and the company’s imminent public offering — could make a killing.
Unfortunately, the film was a bigger fairy tale than investors bargained for, and approximately 730 people lost millions of dollars. For some, the investment represented their life savings.
“Potential investors were told, ‘You’re going to make so much money that your kids and grandkids won’t want for anything,’” said Special Agent Eric Potocek, who investigated the case out of our Los Angeles Division. “In the end, the movie was never made, and it is unlikely investors will ever get anything back.”
Between the film and the impending public offering, the two principal fraudsters behind Los Angeles-based Gigapix raised some $21 million over a seven-year period beginning in 2006. Of the $8 million raised for the movie, only 5 percent of that amount went toward actually producing a film. The rest was used to pay big salaries, commissions, overhead for a fancy office, and other expenses.
Christopher Blauvelt, 59, and David Pritchard, 67, were convicted in 2014 on a series of federal charges including mail fraud, wire fraud, and offering unregistered securities for sale. Last month, Blauvelt was sentenced to eight years in prison, and Pritchard received a five-year term.
Blauvelt founded Gigapix in 2002 and brought Pritchard on as a partner four years later. The two hired telemarketers to solicit potential investors, who were told that Gigapix was a blockbuster animation company waiting to happen, similar to Pixar Animation Studios, and that Gigapix was developing projects expected to generate huge profits when the company went public.
The telemarketers — known as “fronters” — used marketing lists to cold call potential investors and worked from scripts touting the supposed merits of Gigapix. When victims expressed an interest in investing, they were turned over to “closers” who collected their money. Two of the company’s closers were also convicted in the fraud.
While soliciting money for Gigapix and OZ3D, the defendants told lies and half-truths, suggesting that the company was financially successful and investors would receive high returns on their investments in less than 18 months. They claimed that investments carried little or no risk.
Some of the victims were “savvy investors,” Potocek noted, and perhaps could afford to lose what they risked. But many victims-referred by friends or other investors and who lived far away from Hollywood-were susceptible to the sales pitch and the lure of being part of the film business.
“Many of the victims were not wealthy people,” Potocek said. “They were teachers and secretaries and folks who worked 30 or 40 years to save for retirement.” He added that Gigapix “took money from older people and from others who clearly could not afford to lose it. People lost their homes and had their dreams of retiring evaporate.”
There have been other recent cases in Los Angeles involving movie fraud, where telemarketers lure victims into investing in films that never get made. “These criminals were selling entertainment,” Potocek said, “but it could just as easily have been stocks or precious metals. When someone promises a high rate of return in a very short time, and with little or no risk, any investor should beware. Those are very large red flags.”