Objectives
- Identify the agents involved in exposing white collar crime
- Assess the qualities of a white collar crime investigator
- Analyze functional unit and individual responsibilities in constructing a white collar crime investigative team
- Distinguish working relationships between civil and criminal investigative teams and assess how teams with varying goals can effectively cooperate
Introduction
Even most highly competent fraud investigators will be ineffective in implementing a white collar crime enforcement effort if investigators are not properly organized to do their jobs. The ways in which investigators share responsibilities, communicate, cooperate, and supervise can have a very strong influence on how well they do, separately and together.
Organization for detection and investigation of white collar criminal activity, and related abuses, will of course differ depending upon resources available and the location and function of the agency involved. What would be appropriate for a large urban center, might not be fully appropriate for a less populous locality. Different approaches are necessary, depending on whether investigators primarily focus on criminal or civil remedies, and on the kind of agency in which the white collar effort is located, e.g., police, prosecutor’s office, state attorney general’s office, municipal consumer protection office, regulatory agencies, etc. Nonetheless, there are certain general standards which should be kept in mind and which are discussed below. These standards should not be regarded as unvarying directives but rather should be considered as guidelines and as an itemization of issues which should be taken into account in developing or changing an organization.
In the section after the one immediately below, various types and aspects of intra- and inter-organization are discussed in the light of these standards.
ORGANIZATIONAL STANDARDS
Coordinating Investigative and Legal Skills
This standard may appear obvious, but the point is that both investigative and legal skills need to be brought to bear on each possible lead or case which is brought to the attention of an agency. Any agency which moves forward with great investigative skill but without understanding what information is needed to make a legal case, or consideration of legal admissibility of evidence gathered will not only be ineffective but will, in the long run, become demoralized by frustrations stemming directly from failure to successfully coordinate skills.
On the other hand, prosecutors who do not concern themselves with the imagination, skill, and difficulty of investigative work will not be able to effectively marshal the capabilities of investigators to secure the evidence needed for convictions. This elemental point is sometimes ignored; investigators and lawyers may recognize but not sufficiently appreciate the problems the other faces and the ways in which the other must go about his or her business and may therefore put off dealing with the other’s concerns until evidence has been overlooked, lost, missed, or become legally useless.
Setting Explicit Goals and Priorities
There are many possible agency goals for a white collar crime effort, and the standards an agency may set in achieving those goals can be equally numerous. Maximizing the number of investigations undertaken; setting priorities on the investigation of crimes with maximal impact on the public; maximizing the satisfaction of the citizenry with the agency; maximizing the recovery of dollars and other values to the victims; maximizing the number of prosecutions emerging from investigations; maximizing the number of convictions; increasing the deterrent force of the criminal justice system with respect to certain types of crimes or focusing attention on cases with the greatest political impact on the community, all of these are examples of objectives the agency may set to assist in the achievement of goals by the white collar crime enforcement unit.
General statements of objectives such as “fighting white collar crime” or “protecting the public” are so broadly encompassing that they may too easily cover many explicit goals and objectives. In addition, enunciated goals, priorities, and policies may not always be compatible with each other. Sometimes approaching one objective will prevent achievement of another. For example, obtaining restitution for a victim may preclude criminal prosecution, and investigating many minor cases may leave an agency without the manpower and other resources to go after major ones.
The organizational impact of these goals is discussed below. Here, the point is that the white collar crime enforcement goals of an agency should be made as explicit as possible, and clearly understood both by investigative staffs and by the parent organization within which the white collar investigative activity is housed. Without such clearly delineated goals, investigators will be frustrated to find that they are being rapped for doing the “wrong thing”; communication between investigators and between the investigative unit and other units can break down; anxieties resulting from uncertainty as to responsibilities and the nature of relationships can lead to excessive turnover. There are a number of ways in which goals and priorities can be made explicit, through policy statements by supervisors, by consensus, or by subdivision of the effort into several subagencies in order to accommodate competing or conflicting goals.
In many instances, the establishment of a set of goals involves the designation of certain specific types of economic crimes as being the immediate targets of the agency, such as securities fraud, land fraud, auto repair fraud, etc. However, it is important that some of the broader issues involving goals, as described above, be considered even when an agency specializes in dealing with a specific target crime.
These broader issues go beyond particular crime issues, and will influence the particular investigative approach and other policies to be used. For example, if deterrence is the major objective, then the point at which publicity is released will be greatly influenced by this objective, for example, publicity would be used early and expansively. On the other hand, where criminal convictions are a major priority, publicity would be handled quite differently so as to avoid jeopardizing the case by exposure to the allegation of prejudicial press coverage.
One of the considerations often overlooked in establishing the goals of an agency is the effectiveness of other agencies in the same geographical area. There will frequently be federal, state, or local agencies which have overlapping jurisdiction with the unit, and also are effective in their investigations and prosecutions. Agencies should weigh the strengths and weaknesses of others and use such considerations in setting their own goals and priorities.
Sustaining the Motivation of Investigators
Investigative work can be frustrating and tedious. Cases take a long time to develop. New difficulties arise as culprits invent new schemes. There must be painstaking attention to detail. In short, cases take persistence and imagination. Such imaginative persistence will be difficult to sustain if an investigator is simply told that he is expected to be imaginative and persistent. These qualities are so difficult to define concretely in any specific case that a supervisor simply can’t “order” a person to give that extra measure of imagination, the extra push, that can make a case. An agency thus needs to be organized in such a way that the individual investigators are very strongly motivated to attain the agency’s goals. In addition, the agency’s goals and the individual’s own goals need to overlap to a high degree.
As suggested above, the more explicit the agency’s goals, the easier it becomes for the individual investigators to mesh their personal goals with those of the agency. When the goals overlap, the investigator can measure progress appropriately and can make decisions in a personally satisfying way. For example, an investigator in a prosecutor’s office is more likely to be disappointed by a failure to prosecute than one in a municipal consumer protection office, whose investigative report is rejected for criminal prosecution but which is used to effect restitution or some civil remedy.
To maintain high motivation among investigators there must be clear standards that signal achievement of goals as well as signs that attainment of enunciated goals is possible and has occurred. Thus, if convictions are the goal of the agency, then investigators need to see at least some convictions resulting from their efforts. If deterrence is the goal, they need to see some signs that a given industry is cleaning itself up.
If prosecutions are the goal then the investigators need to see some of their cases being taken to court even if some of them do not result in convictions. Able prosecutors know that there is a “right to be in court” where conviction possibilities are marginal but where the wrong cries out for public attention and deterrence of others. Not all goals need to be attained every time, but investigators must have a genuine sense that there is a clear potential for success.
Another factor in sustaining motivation is the respect given investigators by those who use the investigative work product. Investigators should not be used as mere errand boys to find evidence for prosecutors or civil litigators. Prosecutors should refrain from referring only minor investigations to police, keeping all more significant cases for their own, in-house investigators. In the long run such lack of respect and mutual trust will not only undermine the self-esteem and motivation of investigators, but will also make it difficult for any productive relationship to develop between prosecutors and investigators. As indicated above, investigative work is complex, demanding high levels of professional skills, and fully warrants recognition as such.
Maintaining Appropriate Emphasis on Criminal Enforcement
Among the potential alternative options which an agency might have for resolution of its investigations are civil remedies and criminal prosecutions. Agencies will be organized and managed quite differently depending on which of these alternatives is given priority, or depending on the mix of these options employed. Historically, offices of attorneys general, consumer protection agencies, various state licensing agencies, and many federal regulatory agencies, have been limited by law to invoking civil remedies (injunctions, actions for money damages on behalf of victims, etc.) or mediating between the wrongdoers and the wronged. In many such agencies the civil or mediation route is the option of choice even where there is criminal jurisdiction. The civil or mediation approach is frequently selected because investigators are not sufficiently trained in the criminal aspects of white collar crime. However, there can be little doubt that a better balance of emphasis among enforcement alternatives needs to be attained, so that the most appropriate action is chosen.
In addition to the solely legal and impact reasons for choosing between civil and criminal action, motivational and therefore organizational issues also need to be considered. If the agency is part of a police department, then the criminal alternative may be the only acceptable option to most investigators. Even investigators not in law enforcement may become oriented toward criminal rather than civil actions, for a variety of reasons. Some may have worked previously in other law enforcement agencies; some may become morally outraged at the wrong-doers; some may lose confidence in the deterrent value of civil remedies; some react to the discrepancy in society’s reaction to street criminals and white collar criminals; some perceive themselves to be lawmen, law enforcement officers, rather than negotiators or mediators. These quite legitimate motivations need to be fully recognized by decision makers within agencies and in related organizations, such as prosecutors’ offices. Even where civil or mediation remedies are indicated, as in most consumer fraud cases, there is need for some capacity for and orientation toward recourse to criminal prosecutions where appropriate. Without this, motivation among investigators may drop to the point that both the quantity and quality of investigations may deteriorate. In addition, it should always be clearly understood, even in agencies least oriented to the criminal remedy, that where there is prima facie evidence that a criminal statute has been violated, they have not only the right but the obligation to transmit investigative results to prosecuting agencies for enforcement consideration.
Contributing to Appropriate Sentences in Criminal Cases
If a major objective of an agency involved in white collar crime enforcement is to make possible and support criminal prosecutions, then the sentences stemming from resulting convictions need to be consistent with the severity of the crime. Where such sentences appear trivial or grossly lenient, the motivation of those engaged in the effort, both prosecutors and investigators, is likely to deteriorate. Often they will feel that they have given seeming “centuries” of time and energy to investigations and subsequent prosecutions and will wonder whether their efforts were not in vain. While investigators have no role in meting out sentences, there are ways in which they can assist courts in appropriately sentencing white collar offenders. One way of doing this is to uncover far more victims than are minimally required for prosecution purposes, so the judge can be presented with the totality of the offender’s activity when he reviews this information in a pre-sentencing report. They can provide information about other wrongful but non-prosecutable activities of the wrongdoer which are appropriate for inclusion in the pre-sentence report. Any information that can assist the court in choosing an appropriate sentence should be diligently sought by a white collar crime unit. Working through prosecutors, investigators can provide input to sentencing recommendations and suggest appropriate court-imposed conditions on probationary portions of sentences.
Gaining Public Confidence
All white collar crime efforts are ultimately dependent on the public if they are to succeed. They need the public to submit complaints, to stand up as witnesses, to support the funding of agency efforts, and to give full respect and credit to the agency and its personnel when a job is well done. Both the white collar crime unit and its parent agency should be organized and managed to generate this public support. More than a public relations capability is needed. Units and agencies must be organized and managed so that the public can legitimately and reliably have confidence in them. Thus, the way citizen complainants and informants are treated, the ways in which victims are handled, the kinds of publicity generated by prosecutors, the kinds of proactive warnings given the public about current fraud activities which threaten it, all influence the degree of confidence of the public.
Some white collar victims need special attention, even beyond what they would require because of the dollar volume of their losses. Minorities, poor people in general, old or disabled people, may all fall into these categories. Such groups generally sustain dollar losses much less well than other people, making the human impact of crimes against them greater than some other high-dollar-volume frauds. They are less likely to be knowledgeable about who can help them, and can easily lose confidence in our public institutions. Increasingly, these groups are in a position to provide informant, witness, and political support for fraud agencies.
Facilitating Community Cooperation with Law Enforcement
One of the most important secondary benefits that can result from white collar crime investigation and prosecution also concerns the public directly. Anti-white collar crime efforts, if organized properly, can also enhance the efforts to control street crime in a number of ways. This consideration is most important in the case of police agencies. Citizens who have received satisfaction from law enforcement with respect to white collar crime are probably far more likely to report street crime, to be stand-up complaining witnesses, and generally to cooperate with police in their ordinary work. In fact, it is likely that the citizen’s entire attitude toward government could be improved by satisfactory contacts with anti-white collar crime enforcement efforts, since he will recognize that the agency is attempting to “establish justice” no matter what the status of the wrongdoer.
Potential gains from anti-white collar crime efforts are much more likely to be attained if the entire agency is organized for these ends. The section below on communication with the public discusses how subgroups of the citizenry who are especially suspicious of law enforcement can be reached through storefront operations, through liaison of investigators with patrol officers, or through appropriate publicity regarding prosecutions. Some of these organizational procedures which increase public confidence in the agency can also increase the potentiality of helping to control street crime. This latter potentiality is likely to be realized by integrating law enforcement personnel in police agencies, such as patrol officers and detectives, with the anti-white collar crime effort, as just suggested. These personnel can then be the same ones to whom the public would turn with respect to street crimes.
Deterrence of Additional White collar Crime
Since most white collar crimes are carefully organized schemes perpetrated by experienced individuals who often benefit from the technical advice of professionals such as accountants and attorneys, there is good reason to believe that investigative efforts, even alone, can have substantial deterrent effect. This is because investigative efforts are likely to “chill” the environment in which white collar crime operations are planned or under way, making accountants and attorneys not only more reluctant to provide assistance but also encouraging their natural instincts to provide strong cautions to their clients.
To maximize this deterrent effect, the anti-white collar crime effort must be well organized and managed. Questions of which type of offense to focus on, the amount and type of publicity given convictions, relationships with trade associations, the degree of specialization within the agency, special attention to support of probation departments’ pre-sentence report-writing activity, all will have an influence on the deterrent effectiveness of the agency. The evaluation of the agency’s performance in the white collar crime area, then, cannot solely be on the number of arrests and convictions if deterrence is one of its major objectives.
Sustaining Flexibility of Investigative Approaches
One of the most dangerous characteristics of white collar criminals is their great ingenuity in fleecing the public in what appear to be “brand new” ways. The ways are usually variations of old and traditional schemes, but the number of variations is almost limitless. Accordingly, agencies need to be organized and managed so as to be alert to new variations of white collar crime, which may be discerned from such things as changing patterns of complaints, media advertising, frauds reported from other jurisdictions, etc.
If a unit specializes so much that only certain types of schemes are responded to effectively, this very fact almost invites the sophisticated crook to move into the agency’s areas of non-specialization. In a process of Darwinian competition, only those crooks may survive who specialize in the areas the effort overlooks. Some sophisticated operators may sense the limitations of the agency and capitalize on them. This problem does not demand that each agency maintain a full staff of investigators expert in every variety of scheme, but what is necessary is that each agency provide some way for analyzing and detecting new scheme variations and having resources available in-house or in other cooperating agencies to respond to them. For example, a particularly imaginative investigator might specialize in analyzing and coping with unusual and seemingly new fraud situations.
The agency will want to devote special attention to keeping its contacts and level of communication with other agencies open even when it may appear that there is no immediate need to do so. When a new scheme variation develops, resources (particularly know-how) in these cooperating agencies can be mobilized to cope with it.
Effective and Efficient Exchange of Information among Investigators, Investigative Agencies, and Related Units
As just mentioned, the great and increasing variety of white collar crime schemes requires that law enforcement have an equivalent variety of sources of information and prosecutorial ability. The effective flow of information among investigators within an agency, and among investigators in different agencies therefore is very important. Jealousies and rivalries among investigators and among investigative and prosecutorial agencies need to be reduced and if possible eliminated. Mistrust among agencies needs to be minimized; any possible grounds for such mistrust must be frankly and openly examined and dealt with.
Unless information can flow among investigator’s and agencies, white collar criminals have a great advantage.
Furthermore, because white collar criminals develop their schemes on a regional, national, or even international basis, investigators and agencies need to be organized and managed to keep the channels of information open across jurisdictional lines. Thus, investigative agencies should be organized and managed to exchange information with patrol officers, with state, local, and federal law enforcement agencies and with local, state, and federal regulatory agencies, with organized crime squads, with private investigative organizations and trade associations. Giving each investigator a list of agencies to call upon to gain certain information is not enough. Specific organizational procedures need to be used to accomplish this goal. Maintaining close personal contact with individuals in other agencies, organizing and attending meetings, helping and cooperating when assistance is requested, setting up computerized pools of information, are examples of organizational policies that can be important in keeping the channels of communication open.
TASK FORCE OPERATIONS
SUSPECTS CHARGED IN ELDER EXPLOITATION HOME REPAIR FRAUD RING
Release date: 7/29/2013
Victims in the Triangle and Triad lost more than $300,000
Raleigh: Ten people have been charged with more than 75 counts of defrauding seniors as part of Operation Nail It, ending a home repair fraud ring that targeted seniors throughout central North Carolina, investigators and prosecutors announced today.
The defendants are charged with defrauding victims with an average age of 85 out of more than $300,000. They face a total of more than 75 counts, including obtaining property by false pretenses, conspiracy to obtain property by false pretenses and elder exploitation.
Investigators contend that the defendants initially approached seniors offering to perform minor work on their homes, such as cleaning out gutters, for a small fee. The defendants are then alleged to have talked their victims into a series of expensive and unnecessary home repairs to their roof, plumbing, foundation or electrical systems. Work performed by the defendants was minimal, substandard or not completed at all, according to arrest warrants.
The NC State Bureau of Investigation (SBI), Burlington, Cary and Raleigh police began making arrests as part of Operation Nail It early Friday morning. All 10 suspects have been arrested. Arrests were served and processed in Alamance, Edgecombe, Nash, Wake and Wilson counties. The Edgecombe County Sheriff’s Office, Nash County Sheriff’s Office, and Wilson County Sheriff’s Office assisted with the arrests.
“We are extremely proud of the success of the partnership between law enforcement and prosecutors that effectuated these arrests,” said Tammy Smith, white collar crime resource prosecutor for the NC Conference of District Attorneys’ Financial Crimes Initiative. “The elderly population continues to be a target for financial crime, and we have an obligation to protect them from those that prey upon them. We want criminals to know that financial crimes are not tolerated in North Carolina.”
“Criminals and con artists who prey on seniors must be stopped. They strike fast and move on quickly, hoping to stay one step ahead of the law. We’re teaming up with other law enforcement and prosecutors so we can piece together these cases and put home repair fraudsters behind bars where they belong,” said Attorney General Roy Cooper.
Operation Nail It is a coordinated effort by a task force comprised of the following local and state government agencies: SBI’s Financial Crimes Unit; Financial Crimes Initiative of the NC Conference of District Attorneys; Wake County District Attorney’s Office; Consumer Protection Division of the Attorney General’s Office; Burlington, Cary, Raleigh and Wilson police departments; State Board of Examiners of Plumbing, Heating and Fire Sprinkler Contractors; NC Licensing Board for General Contractors; N.C. Industrial Commission; and several local city inspectors.
Operation Nail It cases will be prosecuted by local district attorney offices in partnership with the Financial Crimes Initiative. The task force plans to continue to target criminals who commit felony fraud against seniors.
The task force work started in early 2013 when the Town of Cary Police Department noticed a trend in elderly scamming cases and alerted the SBI’s Financial Crime Unit. Further investigative work revealed the same suspects were targeting senior victims in multiple municipalities in the Triangle and Triad areas.
Prosecuting financial fraud is the primary focus of the Financial Crimes Initiative of the NC Conference of District Attorneys, a new initiative funded out of a landmark national settlement with the nation’s five largest mortgage servicers. Roy Cooper designated funds from the settlement to expand the Financial Crimes Unit in the SBI, a part of the NC Department of Justice, which is headed by the Attorney General. Financial fraud against our state’s most vulnerable victims, the elderly, is a top priority for both units. Since the creation of the Financial Crimes Initiative in November 2012, it has worked closely with the expanded SBI Financial Crimes Unit to increase investigation and prosecution of financial crime across the state.
Organizational flexibility will also make it possible to truly cooperate and share investigative responsibilities with respect to multi-jurisdictional crimes. Agencies which contribute to an investigation should always be given full recognition and credit, unless they wish it otherwise.
Resisting Pressure to Weaken General or Specific Investigative Thrusts
Especially in cases in which white collar crimes are committed by businesses which are otherwise legitimate, an agency which investigates white collar crime may be subjected to direct or indirect pressures to modify its operations. Such pressure is usually quite subtle in form, but may be especially strong if some other agency of government is implicated in a fraudulent scheme. The investigative agency needs to be organized and managed so it can successfully resist such pressures.
Even an implication of a small shift in efforts as a result of such pressure can undermine the credibility of all of the agency’s efforts and the morale of its staff.
It should be recognized that pressures against a specific investigation may be concealed within more general policy positions. For example, new priorities may be established shifting white collar crime investigators and resources to some other area of investigation or to another agency function, or the decision may be made that an investigation would “best be handled” if turned over to another unit within or outside the agency.
Alternatively, the unit may be distracted from its work by a barrage of “fire-fighting” requests for assistance which may effectively undermine an ongoing probe. It should also be recognized that real and troublesome pressures can be truly independent of particular investigations. For example, legitimate businessmen within a community may become uneasy and attempt to exert pressure if there is a major effort against business crimes because they may believe it undercuts public confidence in the business community. This latter pressure must also be resisted, notwithstanding some legitimate concerns it may represent.
An agency which succumbs to such pressures will soon find that the cooperation it receives from the public and from other agencies which are aware of the situation will be severely undermined. Units combatting white collar crime must be organized to maximize the professional security and pride of their personnel; leadership of the parent agency must support the effort against even subtle or indirect threats to its integrity. The flow of information among agencies not only contributes to effective investigation, but also tends to keep each agency under scrutiny, to provide investigators with outside support should there be subtle or covert pressures to undercut particular investigative activities.
WITHIN-AGENCY ORGANIZATION
In the section below, the general standards that were set forth above will be applied to various facets of agency organization and activity. Some of the standards apply much more to some facets of the organization than to others, and more to some types of organizations, e.g., police, etc. The above standards will not necessarily be cited explicitly but should be obvious in the discussion. (In this discussion, the term “unit” is used to designate a part of or an element of an agency.)
Goals and Priorities
Other things being equal, it is generally desirable to set up a special unit to combat white collar crime and related abuses. Because of the problems of traditional concentration of law enforcement on non-white collar type crimes, there would be great difficulty in mobilizing resources to fight white collar crime within units which have other responsibilities, such as burglary investigation, or which are part of a general assignment detective squad. The other areas of responsibility, the other goals, both because of their legitimacy and their traditional place in law enforcement, are highly likely to take priority. In some instances, even street bunco and forgery squads should be separated from anti-white collar crime units. In many instances, simple embezzlements can be best handled by traditional general assignment detectives. Another reason for having specialized anti-white collar crime units where the size of the overall agency makes such specialization feasible, is that their clear designation gives them a professional status, an identity, which is important for the sense of professionalism of the investigators.
A unit which is housed within a law enforcement parent agency, such as a police department, has in general a better chance to pursue criminal prosecution as a major objective. Even if such a law enforcement unit deals with consumer problems it is more likely to recognize the potential of such activities as subjects for criminal investigation and prosecution, in contrast to units within non-law enforcement parent agencies which are more likely to downplay criminal referral or prosecution in favor of civil or administrative action, or mediation. This is not to say that all non-police agencies lack orientation to criminal enforcement. Many have shown themselves able to maintain a reasonable balance between the two routes. Nevertheless, police agencies, local, state and federal, by their very nature are more oriented to considering the criminal remedy.
If a unit determines that criminal prosecution is its main objective, it can still retain civil, administrative, or even mediation remedies for situations where criminal actions are not feasible or wise. Obviously, any priority attached to the criminal approach needs to be made explicit and should be adhered to diligently. If it is not, and the unit lapses into more easily attained civil remedies or mediation alternatives, the investigators may lose motivation. But, if the unit makes the use of civil and administrative remedies explicit as second best alternatives, (putting priorities in clear perspective) investigative momentum in the criminal sector is more likely to be maintained. Some investigators may be so oriented to criminal prosecutions that they may not fully understand the value of civil and administrative actions, but experience with victims and observation of the power of civil and administrative remedies can reduce this problem. In fact, experienced investigators should develop great skill at judging when to work toward one enforcement objective rather than another.
When a unit puts a priority on investigations leading to criminal prosecution, it should be made crystal clear that resulting prosecutions do not necessarily have to be felony cases. In some instances, a series of misdemeanor prosecutions can be very effective if they are directed at a given industry, wrong-doer, or group of wrong-doers, such as a group of automobile repair defrauders. A series of misdemeanor convictions may very well deter further criminal activities.
Careful organization of information on harm done to victims, properly presented to a court on sentencing, can result in sentencing for misdemeanors which will be as severe as might be anticipated in the case of a felony, insofar as actual rather than potential sentences are concerned. Furthermore, in some jurisdictions, conviction on a misdemeanor constitutes a prior conviction for consideration in subsequent cases involving the same defendants.
In order to accomplish its ends, however, the unit needs to articulate its goals and to so organize its work that the investigators do not see themselves as engaged in trivial activities and are not viewed by others as doing so. For example, a squad within the unit might be given the task of cleaning up a given industry, and thus find great satisfaction in using a variety of remedial actions and sanctions when they see the impact of these activities.
Another choice that needs to be made concerns how the unit’s resources should be allocated between proactive and reactive approaches. The proactive approach is that which involves an affirmative search for violations; the reactive approach involves waiting for someone to complain about a specific violation. If the unit is by tradition reactive in nature, then more personnel and resources should be placed in complaint handling or referral receiving efforts of the unit. If the unit places greater priority on proactive efforts, such as decoy operations, or scrutiny of newspaper advertisements for possible consumer frauds, relatively more resources should be assigned to investigative work.
After these general types of policy decisions are made about the unit, then specific, high priority, target crimes can be designated, such as land fraud, consumer fraud, etc. However, these target crimes may have to be changed from time to time as the pattern of crime changes, as deterrence becomes effective in certain industries or business areas, or as the economic and social systems change. As pointed out in this books chapter on evaluation, both the community and the patterns of crime must be constantly monitored to determine whether and how new target crimes or overall goals need to be established.
While target crimes can be designated, no investigative unit can ignore a possible criminal violation coming to its attention simply because it is not a pre-designated target. Some “non-targets” will be too important in and of themselves to be ignored, and may therefore compel changes or realignment of goals and objectives.
One factor which needs to be considered in making judgments about goals and specific target offenses is that some types of crimes need to be dealt with on a more or less regular basis because there are needs and pressures in the community to do so. If the unit does not work on these crimes, its budgetary and legislative support may tend to weaken. This type of crime may, for example be a consumer fraud of a given type, or a welfare fraud. The agency also needs to have the capability and freedom to move against other types of crime which are emerging and which it judges to be important to react to. Thus, some balance needs to be maintained between responses to novel or special criminal activities and those given to on-going enforcement responsibilities. The more careful the attention and planning which the unit gives to its “bread and butter” cases, the better able it will be to direct resources to new and challenging areas of interest.
Another major factor in determining and establishing the overall goals and specific target crimes of a white collar crime effort is the availability and effectiveness of other agencies which are concerned with the same crimes. In many instances it might be better to refer a matter to another agency for investigation, because it has overlapping jurisdiction and either specializes or is in a better position to allocate resources to the task. However, in deciding which types of cases to refer, it is important to evaluate the goals of the other agency to see if their objectives are in fact similar to those of the unit in question. For example, is the other agency also oriented to law enforcement, or to mediation activity? Furthermore, even if their goals are similar, a question must be asked about their comparative effectiveness in attaining these goals.
Maintaining a Civil/Criminal Remedy Balance in Consumer Protection Agencies
Consumer protection units tend in general to focus on civil or mediation remedies, rather than criminal enforcement. There are many good reasons for this approach. There should, however, be a reasonable balance between the two approaches in order to maintain maximum flexibility in coping with white collar crime and related abuses. In order to maintain a better balance among the various approaches it may be important to have local authorities adopt a stance involving more criminal prosecution. This can be implemented by encouraging referral of cases from those agencies which either lack criminal authority, or concentrate on civil or mediation remedies, to those which prefer to or have demonstrated competence in criminal law enforcement. As noted above, this will be facilitated if due credit is given to the referring agency for successful outcomes.
Where local jurisdictions do establish consumer protection units, there are ways of organizing them to help to maintain the balance between civil and criminal remedies where they are part of larger organizations which have criminal jurisdiction.
First, the unit might be better titled consumer fraud unit. The title would not only bespeak its objectives; these objectives would also be communicated to the public, to the potential wrongdoers, and, perhaps most importantly, to investigators who work in law enforcement agencies which are explicitly oriented to invoking criminal sanctions.
Second, a better balance between criminal and civil sanctions can be achieved by a sound evaluation strategy. Thus, where a priority is placed on criminal prosecutions, a unit should not be evaluated solely on the basis of the dollar volume of return to victims, since it is in general easier to accrue funds for victims through civil remedies, leaving culprits free to victimize others and treat enforcement problems as just another cost of doing business. Third, and a related point, is that criminal enforcement priorities will be undercut if investigators relate too exclusively to white collar crime victims in their work.
Such a relationship can easily create a situation in which helping particular victims becomes so paramount a consideration that other objectives such as deterrence or the protection of other potential victims is ignored. Investigators in agencies for which the criminal sanction is important need to interact with other investigators, with criminally oriented prosecutors, etc., to prevent an over-identification with immediate victim concerns. Thus the white collar unit should not be separated physically from other, more criminally oriented staff personnel who may be part of the parent agency; they all should be in the same building if possible, even on the same floor.
Fourth, the complaint handlers and investigators should be specially trained to be sensitive to the possibilities of criminal involvement. Investigators need to work closely with criminally oriented investigators or prosecutors, so that they can retain and develop skills in criminal investigation. The decision in the unit as to whether to go criminal or civil needs to be made very early, because tactics focused on mediation or civil action may as a legal or practical matter make it difficult or legally impossible to later switch directions and move toward criminal prosecution. It should be clear, however, that if in the course of an investigation new evidence, for example, new in either character or volume, starts to develop the switch of emphasis is often both possible and desirable. The difference between a civil case and a good criminal case is often no more than the number of times a given misrepresentation is made.
The consumer unit needs to have an effective way of processing complaints so that patterns of offenses will be noticed and will trigger criminal investigation at the earliest possible time. It is often difficult for criminally oriented investigators, especially those in another agency, to take over in cases already substantially investigated by civilly oriented investigators.
Task Assignment, Expertise, and Motivation
In very small units, such as those with two or three investigators, the issue of specialization hardly exists; their personnel will usually have to be generalists. However, in larger agencies and units, investigators can be generalists, taking on all sorts of investigations, or they can specialize.
There is a very great advantage to well conceived and organized specialization of investigators’ assignments in large units which serve populous jurisdictions. The obvious one is that the development of expertise increases the breadth and depth of an investigator’s knowledge of a type of crime. Specialists become walking repositories of great volumes of information and ideas about investigations. Second, individual investigators may often possess specialized information about a particular line of business because of previous experience. In fact, in the recruitment of investigators, the possession of such specialized information may well be one basis for selecting unit personnel. Third, individual investigators will often have a particularly negative feeling about certain types of white collar criminals, sometimes because of the investigator’s identification with a special class of victims, such as minority groups, widows, or elderly people. Obviously, such involvement can motivate the investigator to very high levels of activity and be a sound basis for encouraging specialization. Lack of passion is not necessarily advantageous in white collar crime investigations. Finally, the investigator-expert will be recognized by his fellow investigators for his special capabilities and the respect he gains thereby can raise his motivation even more.
The professional pride that investigators can develop in their expertise and the other satisfactions they find in their work have many additional benefits beyond those conferred on particular investigative efforts. The investigator can gain a great deal of intrinsic satisfaction from his own work. He can gain satisfaction from the sheer exercise of his skills, such as from confrontations with white collar criminals as their images of themselves as “just sharp businessmen” are shattered when the investigator succeeds in making a case; from the satisfaction of doing justice for the victims with whom he identifies; and, in cases in which undercover work is done, e.g.; by use of decoys, from perceiving that he or she is well able to cope with criminals whose stock-in-trade is the cleverness with which they operate. The significance of these motives should be recognized when cases are assigned to investigators. These satisfactions may become so great that the investigator may be quite content to make a career out of white collar crime investigation. Nevertheless, and particularly in police agencies, the white collar crime investigator should be very much a part of the regular force, clearly in the line of general upward mobility. Movement between white collar units and other police units serves both to bring in fresh blood and to assist in detection and referral to the unit by spreading expertise department-wide. Being in the line of upward mobility can also serve to attract ambitious and able recruits, and to ensure that higher ranks will ultimately include officials with the knowledge both of how to support and to supervise white collar crime enforcement units.
Specialization can also be a characteristic of sub-units. There may be specialized groups of investigators in very large law enforcement agencies; a land fraud group, a consumer fraud group, etc., depending on the size and nature of the agency or larger unit. However, it is very important that specialization not become so great that the unit loses its capacity to respond to new types of schemes. In fact, if the amount of specialization becomes so great as to be notorious, white collar criminals may simply move into the areas of non-specialization.
Accordingly, the unit needs to be organized to provide for some capability to make such responses to new scheme variations. If at all possible, investigators who are particularly oriented to take on new challenges should be assigned to a kind of special assignments role, to take on the new and different types of schemes. Such special assignment investigators should not, however, be exempted from taking on cases in one of the more “regular” areas when the backlog in one of these areas is excessive. In some instances, it may be necessary to shift specialist investigators into new areas because of the magnitude or complexity of the new schemes.
If the unit is part of a police department, then the interchange of personnel between the unit and the rest of the department as described above can help to bring new skills into the unit and increase the sensitivity of the rest of the department to white collar schemes when they see them. However, in some units, it is very important that the response to new schemes not be so great that resources are removed excessively from areas which provide the bread-and-butter cases, the cases which generate support from the public and from administrative and political entities outside the agencies. Bread-and-butter cases are those which are continually confronted such as consumer frauds or medical frauds, e.g., in contrast to a pyramiding scheme which might occur only periodically although with devastating impact.
New cases should be assigned as much as possible to investigators, on the basis of their own expertise. If a given investigator has started to work on a given type of case, or has started on a given case or culprit, all additional information regarding these cases should be referred to him or her, even if the case or culprit has been “quiet” for a long time, even years.
Leadership and Management
One major implication of the need to respect the professionalism of investigators is that the supervisor of the unit should be supportive and helpful, rather than closely directive in his approach. The supervisor should assign cases to his investigators, and hold them accountable for their performance, but not for the details of their day-to-day work. When and if investigators encounter problem situations which they find difficult to handle, they should feel free to turn to the supervisor for help or guidance, but for the most part the decision to ask for help should be left up to the investigators.
One of the supervisor’s main jobs is to protect the unit from outside interference and to foster its interests as a group of professionals within the total organizational environment. This will be easier if investigators have civil service protection. This protection might in some instances be given to all but the highest level personnel in an agency or unit, the highest level being often necessarily and properly an appointive position, since appointment by an elected official is a prime mechanism for keeping an agency responsive to the general public.
Communication and Physical Arrangements
As is emphasized throughout this book, the effective processing of information is essential for a white collar crime enforcement effort. The very way in which the unit is physically organized can greatly affect efficient information processing. The traditional open room arrangement of police detective squads is often most desirable, since investigators are more likely to share information and ideas under such conditions. Keeping the noise level down is less important than fostering the communication that occurs in such a common room, if only from overhearing one another working. This type of communication also has some secondary benefits, such as one investigator’s learning something about another’s area of expertise. In that way, he can more readily funnel information, complaints, etc., directly to the most appropriate investigator. And, if there need to be transfers of assignments, such transfers become easier to make.
If investigators need to team up to work some cases, this open communication facilitates the development of such teams, be they short term or long term. Investigators can learn about one another’s contacts and informants, so that when appropriate, one investigator can ask another to gain information through the latter’s contacts. The supervisor can observe what his investigators are doing without being intrusive, and he is readily available to provide help and guidance if it is needed.
The sharing of information and mutual helpfulness are facilitated by the avoidance of the use of the number of arrests as an evaluative criterion for investigator performance. If there is no pressure to generate arrests or other quantifiable data, then the investigators will not be destructively competitive with one another. On the contrary, their helpfulness to one another can be evaluated positively by the supervisor.
In larger units in which the sheer numbers of investigators makes the free flow of communication among investigators difficult, regular staff meetings may be needed. These meetings may involve the total staff of the effort, or small subgroups of the unit. At these meetings, cases can be discussed, as well as overall unit or agency problems. These meetings should not be set aside simply because they are time consuming, the flow of information is too important.
RELATIONSHIPS WITH OTHER PARTS OF PARENT AGENCY
Relationships with Other Investigative Units
Other investigative units within the parent agency may have some overlapping concerns with the white collar crime unit. Such units might be an organized crime unit, forgery squad, street bunco, or even some general assignment squads. There are cases which fall into more than one enforcement area. For example, bankruptcy frauds are often perpetrated by organized crime figures; forgeries will often be involved in white collar crime. It is important, therefore, that information be shared between and among these units.
Rather than depend solely on formal information processing, it would be better if there were regular meetings between the supervisors of the white collar crime unit and the supervisors of each of the other units, joined by investigators handling cases which might overlap. In these meetings, the subtleties, the nuances, and the complexity of cases can be communicated. These meetings can lead to a sharing of information, a communication of expertise and new insights, a transfer of cases, or the development of ad hoc teams to work on a case jointly. If any of the cooperative units (for example, the non-white collar unit) is evaluated on a quantitative basis, such as number of arrests, it would be preferable to have the other unit take credit for arrests in cases with overlapping involvements. In that way, the chance of future cooperation with the white collar crime unit is enhanced. Since the white collar crime unit, hopefully, is not evaluated on the basis of mere numbers of investigations and cases, it can gain credit simply by cooperating with the other unit if there are overall affirmative investigative and prosecution outcomes.
Detective units which are assigned to divisions within a large police department or even to precincts will often run into white collar crime cases, especially consumer-related problems. These detectives may be able to handle some of the less time consuming cases themselves. However, more complex cases require more time or more access to centralized records than may be available to them, and they should be on notice that they can ask their supervisor to transfer the case to a white collar crime unit working out of the central headquarters.
Clearly, the white collar crime unit should encourage this flow of cases, even when some seem relatively unimportant, since the flow itself can serve important informational functions for them; and later on they may need the divisional detectives’ help.
In some areas the relationships between white collar crime and other sophisticated crimes, such as organized crime and fencing, will raise the issue of whether there should be a merging of units. Since many of the techniques and expertise of investigation are quite similar, this may be a highly desirable option for agencies in some jurisdictions. If adopted, care should be taken to ensure that white collar crime priorities, such as consumer fraud, are not downgraded because of the glamor and insatiable resource demands of these other enforcement programs.
Relationships with Police Patrol
The potentiality of patrol divisions as a resource for white collar crime units is far greater than is sometimes assumed. Patrol officers are out in the community and therefore have access to information, witnesses, and other evidence of white collar crimes which might not otherwise come to the attention of an investigative unit. On the other hand, these potential resources will not be developed without special effort, since patrol officers are generally not sensitive to white collar crime, nor are there normally any professional benefits they can obtain by developing such sensitivity.
Recently, more police departments have involved police legal advisors in the day-to-day functioning of patrol divisions. They have been assigned to work closely with precincts or have been assigned to work full time for operational units. Since they can have a strong influence on the way that patrol officers react to white collar crime matters, they should receive special training in white collar crime issues, and should be involved in the training programs described in this book. In addition, any training or programs developed for patrol officers should involve these police legal advisors.
The ways that patrol can participate in an enforcement effort against white collar crime can be divided into a number of categories:
- Contribution to intelligence information
- Referrals
- Field interview reports suggesting white collar crime
- Citing or arresting for crimes
- Participation in special target programs
Each of these will be discussed in turn.
Intelligence
If patrol officers have been appropriately trained and informed, they can acquire information which may not be enough for even a preliminary investigation but which might be useful for investigators to pursue. For example, they may notice that the types of goods loaded or unloaded from a given business establishment begins to change drastically with no apparent reason, suggesting a bankruptcy fraud (or a fencing operation); or they may notice new businesses which suddenly announce close-out sales or close-out sales which go on indefinitely. In one jurisdiction police noted a steady turnover of used cars in a private driveway, suggesting an odometer roll-back operation. In some of these cases, even the patrol officer will have enough basis for making an investigation himself, but the same information may be even more useful to an investigator. The officer himself should be able to make the determination that the information suggests the possibility of white collar crime, rather than having this determination made by some intermediary between himself and the white collar crime unit in his department. He should indicate this on his report, so that his supervisor can then send copies of it on to the person in charge of the intelligence efforts of the white collar crime unit. In this way, the greatest degree of direct communication can be established between the patrol officer and the unit, without the intervention of other administrators and staff people who may not be highly sensitive to the problems of white collar crime and thus may not fully appreciate the importance of forwarding the information on to the white collar crime unit.
Referrals
Angered victims often turn to police officers for assistance, since they are the closest representatives of governmental authority available. One traditional response of patrol officers has been to treat these complaints as purely civil, with officers referring the citizens to private lawyers. However, in many instances the complained of activity may well be criminal in nature, which would be apparent only to an investigator who is alert to white collar crime issues, and who, for example, has other information which establishes a pattern of complaints. Patrol officers should therefore have a directory of governmental agencies, to which they can refer citizens. The information in such a directory should be organized according to the types of complaints from citizens, rather than in terms of the agencies. The officer receives information from the citizen in the form of a complaint, and he should be able to look up the type of complaint in the directory. Under the complaint category can be listed the agency or agencies to which the citizens should be referred. The information about the agency should be as specific as possible, telephone numbers, addresses, etc. For example, the victim of a burglary may complain to an officer that a door-to-door salesman sold him a burglar alarm that was supposed to ring in the police department. The officer could refer him to the consumer affairs office of the city, or to the fraud squad of his department. A street acquaintance of the officer might complain that some clothes he ordered through the mail are long delayed in being sent; the officer can refer him to postal inspectors. Preparation of such a directory should be a priority task for a white collar unit, whether within or outside the police department.
However, there are several considerations involved in the use of patrol officer referrals. First, many citizens, especially but not only, the poor, uneducated, and minorities, are reluctant to call public agencies with such complaints. They may feel that the referral is the beginning of a bureaucratic run-around; their confidence in these agencies may be minimal; or they may feel that they will be unable to communicate properly. Therefore, the officer may have to call the agency for them, either initiating a telephone call and putting the citizen on the line, or by making the whole call himself. If the agency is close by, he might take them there. If possible, he might wait until the call or visit is well underway so as to be sure that the citizen follows through, or can be referred to an alternate agency if the first is not appropriate.
Another consideration concerns the patrol officer’s relationships with the total community, including local businessmen. Since criminal culpability is usually not clear at the complaint stage, an officer may unnecessarily jeopardize his good relations with the local community if he gives even the appearance of making criminal accusations prematurely. By servicing citizens through referrals to the white collar unit, the officer may avoid this problem. Such referrals are also useful when the officer suspects that he is being used as a “collection agency” to frighten a deadbeat into paying, or in other ways being used as a substitute for private legal actions.
Referrals take the officer out of that line of fire, without resort to the standard reaction of “see your lawyer.” For people e not of great means, lawyers may be a luxury, so that referral to small claims court or to public legal services might be a genuine service by the officer. Such referrals should be logged by the officer, so that investigators later might have a better record to work with if they pursue an investigation. They might find it easier to get leads for approaching other agencies to reach victims, develop patterns, etc.
Field Reports Concerning White collar Crime
In some instances, a citizen report may clearly give the officer some reason to believe that a white collar crime has been committed, but neither citations nor arrests are fully justified or they may not be appropriate. In many instances, such rapid action will be counterproductive to an investigation; there is only rarely danger that the subject of a white collar crime investigation will disappear while a case is being put together as where an itinerant home repair operator flees with the victim1s money when the job is only half done. More often the citizen will be reporting some on-going activity which will remain in place long enough for an active white collar crime unit to respond with appropriate action.
In some instances white collar crime activity may surface in the course of more conventional police activity. An officer may be called to a place of business either by the businessman or by a customer because of a disturbance or a fight between the two. One or another of the parties may be accusing the other of theft, but the officer may assume without further investigation that the reason for the quarrel is strictly a civil matter and he may therefore just try to deal with the fight as a street crime. However, the reason for the fight may, in fact, be a white collar criminal act by one of the parties. The officer should at least consider investigating or reporting this possibility as well as dealing with the disturbance of the peace or assault. He may be overlooking a serious problem if he does not.
The patrol officer should be especially alert to the possibility of white collar crime where there have been a number of disturbances in the same business, with citizens always accusing the business operator of theft or fraud. The officer in that case should not only make a preliminary investigation, but he should include in his report full information about the previous disturbances, including the names of the citizens involved, so that the white collar investigator can follow through. The officer should carefully collect all records and papers, being careful not to smear over fingerprints on the paper. If some defective piece of property is involved, and there is some chance that the property would be used, etc., before it could be acquired as evidence, then the officer should make arrangements to obtain it. This might be in the case of auto repair frauds, TV repair frauds, etc. The officer might be in a better position to obtain statements and documents than an investigator at a later date because of the danger of losing papers, “using up” the evidence, failing memories, or unavailable witnesses. In short, the officer can often act as the preliminary investigator on the case.
Citations and Arrests
In some police departments, the patrol officer may have enough knowledge of white collar crime to recognize a probable case, but he, may not have the expertise to make the complete investigation, or he may be pressed by his superiors not to spend a great deal of time on such activity or he may simply not have the time.
The time pressure problem may, in fact, be less than initially supposed because most complaints about white collar crime occur during weekday working hours rather than on Friday and Saturday nights, times when patrol officers are at their peak work loads. In any case, if for any reason the patrol officer comes upon what he believes to be a white collar crime violation and is not able to make a full report, he should be able to call a white collar crime investigator from his department to come out and make the report. The patrol officer’s superior should be informed by the investigator of the patrolman’s action so that the patrolman can get full credit. The investigator should also note the patrol officer’s action in his own log. Any information about other disturbances concerning the same person, or other relevant information which will lead to knowledge of additional victims should be gathered at this point.
In some of the cases in which the patrol officer makes out a full report he may also have legal justification to issue a citation or even to make an arrest. Such instances are more likely to occur in cases of itinerant door-to-door salesmen, or home repair defrauders, or curbside auto repair defrauders, where, for example, there is criminal jurisdiction arising out of one possible aspect of broader criminal activity, such as soliciting without a license. In some departments the patrol officer may lack the time or expertise to fill out the citation properly or to make a “good arrest.” A system should then be set up to dispatch an investigator immediately to the scene to make out the arrest papers and even to do the booking, with the understanding that the patrol officer will get full credit for the actual arrest. Since the investigator is hopefully not evaluated on the basis of the number of arrests, he has everything to gain from such an arrangement, as has his unit.
Participation in Special Programs
An anti-white collar crime unit can organize a systematic program against certain types of crime in which the patrol officer can participate. These can be programs against fraudulent door-to-door salesmen, home-repair defrauders, etc. Patrol is likely to be the branch of law enforcement which gets the first information about these activities in an area, either by direct observation or citizen report. Patrol officers can be brought into the program by having in-person presentation by white collar crime investigators at roll-calls. Included in such presentations should be such things as showing of mug shots and handouts of other information, shift and precinct briefings on the specifics of the arrest process for these types of criminals, assurances that patrol officers will receive full credit for arrests they make, even if they are assisted in the arrest by white collar crime unit personnel. In some cases, one of the supervisors of a precinct or division might be given the responsibility of coordinating efforts between patrol and the investigative units. Such programs, if successful, are likely to go a long way toward interesting patrol officers in the fight against white collar crimes.
In order to have a patrol division which actively participates in an anti-white collar crime effort, there are a number of factors to be considered, some of which have been indicated above. First, patrol officers need to be trained in the Police Academy, at roll-calls, and as part of special training programs. Second, as has been repeatedly noted above, patrol officers need to be given full credit for contributions they make, such as arrests. Third, the relationships between street crime and white collar crime needs not only to be dealt with in training but the tie-in should be explicitly recognized. For example, if a patrol officer is given the name of a burglar by a citizen grateful for some help with respect to a consumer fraud, this should be specially noted in his report. Fourth, the tie between patrol and the white collar crime investigator needs to be made clear. Recruiting investigators from patrol rather than from other investigative units can strengthen such ties. Having patrol officers work on temporary assignment in the investigative unit would also help. And, investigators would need to both feel and show respect for patrol officers by such subtleties as going to a patrol headquarters for a meeting, rather than vice versa, developing patrol officer expertise by in-house orientation as to how to avoid being cheated themselves by current active schemes, giving high priority to investigating crimes in which patrol officers are victims, and by helping law enforcement in general, such as with charity frauds which use the police name as part of the con.
In departments in which neighborhood team policing has been established, patrol officers are both more likely to learn about white collar crime and more likely to be able to react effectively. Neighborhood residents would be more likely to develop rapport with the police and report such crimes to them. This acquaintance with the local citizenry and businessmen would also tend to make the patrol officer appreciate the plight of victims. Also, the patrol officer’s greater knowledge of the neighborhood helps him sort out the legitimate complaints from the non-legitimate. He is better able to determine when he is being used as a “collection agency”; when the complainant is really the crook; when an accusation against a businessman is misunderstanding or a genuine civil matter. Of course, his very integration in the community may make it difficult for him to become involved in what might· be in part just a quarrel between two parties, especially if he has established close ties with one, or is even dependent on one for cooperation with respect to other types of crime. As indicated above, the use of an effective referral system can help the officer out of the dilemma. Finally, the continual, visible presence in the neighborhood of an officer clearly interested in white collar violations can act as a reminder to potential white collar criminals that law enforcement is near at hand and thus contribute to deterring these offenses.
RELATIONSHIPS WITH OTHER AGENCIES
Geographical Liaison
One of the major characteristics of some white collar crime and criminals is their geographic mobility. Thus, white collar crime units need to maintain close liaison with each other across jurisdictional boundaries, within states, and interstate. This liaison can benefit local agencies in a number of ways. One unit may be able to warn another about the movements of particular suspects. Units may be able to alert other units to the particular schemes being used by the criminals even to the point of indicating how best to investigate the cases. Even more detailed information, such as mug shots, MOs, and aliases can be shared. Officers in one jurisdiction can make arrests or serve warrants on criminals wanted in another.
If the scheme itself cuts across several jurisdictions, additional purposes to the liaison can develop. The investigators in each jurisdiction can be helped by information obtained in the other jurisdictions including information necessary to issuance of a search warrant. Victims of a scheme generated in one area may reside in another, so that information from the victims can be obtained only by cross-jurisdictional cooperation. Each jurisdiction may see only a part of the total criminal operation, so that the full significance of each part cannot be noted unless all of the information is pulled together. One of the jurisdictions may need to take the lead because the strongest case can be developed in that jurisdiction. The use of charts, geographical information systems, and databases can be very helpful with respect to this kind of problem.
In order to have the most effective liaison and cooperation across jurisdictional boundaries it is important to develop networks of personal contacts across these jurisdictions. Investigators tend to share information and cooperate in other ways only with those whom they know and trust. Such personal relationships can best be established by having meetings among investigators. There can be at least two purposes of such meetings: (i) to share intelligence, and (ii) to deal with educational and business issues. In intelligence meetings, the purpose is to share operational intelligence about particular suspects and schemes. In educational and business meetings, the purpose is to convey information about such general topics as the role and functioning of given agencies, new laws, etc., and to conduct such business as applying for grant money or developing training programs. It is best not to mix these purposes in the same meetings, for reasons discussed below.
Intelligence Meetings
Investigators invited to intelligence meetings should generally be of sufficiently similar background so that trust and communication can be engendered. Thus, private agency investigators or investigators from agencies which strictly avoid criminal remedies should not be invited to the same meeting as investigators from criminally oriented law enforcement agencies, except where there is some special purpose for doing so. These intelligence meetings should be called by one of the law enforcement agencies in the area, one that is trusted and respected by the others, one which has no inclination to monopolize cases.
One very effective model for such a meeting involves simple intelligence sharing efforts in which each of the investigators has an opportunity to tell the others about a new scheme that is developing in his area which he believes might spread. The person conducting the meeting should do so in as informal a manner as possible. Formal agendas and record taking should be avoided. He should have some idea in advance as to which investigators have something particularly important to convey, and should simply call on them to make quick,12 to 15 minute, business-like presentations. Next, investigators from each jurisdiction represented should be asked during the meeting, by the person conducting it, if they have anything they would like to share. Each of them can inform the others about criminals who are loose in the community, either with or without warrants outstanding; can request information regarding certain suspects or schemes; ask the other investigators to refer victims to him; and bring other investigators up to date on on-going investigations. New investigative techniques can be described. Copies of evidentiary documents can be passed around; by use of overhead or opaque projectors, the group can be shown mug shots, documents, or lists of relevant information. Actual physical evidence can be shown. In some instances where this method is used, cases have actually developed out of these give-and-take discussions.
Such presentations not only foster the sharing of information, they also assist investigators to know one another. They can learn whom they can trust, and where certain types of information are available. Furthermore, white collar crime investigators can gain considerable psychological support from such presentations, especially if they come from agencies in which they are relatively isolated from other investigators. This support may very well sustain them in the face of difficulties which they may encounter in their home jurisdictions. Such meetings can serve as an important training device for investigators who have only recently been assigned to work on white collar crime, acting as an additional training forum in which they can learn about techniques of investigation, the characteristics of particular schemes, etc.
After the presentations are over, ample time should be allowed for the investigators to meet informally in small groups so that direct personal contacts can be made, and friendships developed. These informal interchanges are where future cooperation can be planned, current cooperative efforts enhanced, and past efforts reviewed.
Such meetings should be held on a fairly regular basis with the same group of investigators, or, at most, a homogeneous group with respect to professional identity. Informal meeting groups can develop as part of more formal meetings, such as those associated with training programs, conventions, etc.
Educational-Business Meetings
The purpose of such meetings is more general: to convey information about agencies, laws, budgetary problems, develop new programs, etc. Investigators and other cognizant personnel from law enforcement agencies, from private trade associations, from industry-based investigative agencies, such as insurance, from governmental agencies which do not focus on criminal enforcement, should all be invited. Formal presentations in which agency representatives describe their agencies, analyze new case and statutory law, or introduce information about new investigative technologies can all be conducted at such meetings, with a formal agenda, officers, etc. The value of such meetings for effective law enforcement can be greatly enhanced if there are periods set aside in which people from different agencies can mingle informally, get to know one another personally, develop friendships, and develop some possible cooperative work.
There should be no expectation that operational intelligence information can be conveyed in such meetings because the difference among the groups of investigators tends to minimize the degree of trust they can develop, as well as the degree of full understanding of one another when they attempt to communicate about given investigations. On the other hand, at the intelligence meetings described above, time and energy spent on business and educational matters would detract from effective communication regarding on-going investigations and schemes.
Agencies With Overlapping Jurisdiction
Within any geographic and subject-matter area there will be federal, state, and local overlapping areas of authority. In some instances both administrative and enforcement agencies may have jurisdiction over the same activity; for example, a state motor vehicle licensing bureau and an auto repair fraud unit may be concerned with the same abuses. Federal, state, and local statutes or ordinances may all be applicable to the same wrongful activity, although the definition of the crime may differ.
In some states, both the attorney general and local prosecutors will have the power to enforce a given law. Frequently public and private agencies will offer different remedies for the same abusive activity, e.g., mediation, injunctive relief, civil remedies, or criminal prosecution.
The overlap of legal approaches has the potentiality for great weakness in the system and also for great strength, depending on how those with administrative, regulatory, and enforcement responsibilities approach the problem. On the one hand, the danger is that some wrongful activity will either not be dealt with by any of the agencies or will be dealt with by an ineffective agency, or by a strong agency in an ineffective way. A given type of wrongful activity may be held as a low priority target by all of the agencies, because some of them assume that the others are giving it adequate attention. A law enforcement agency may assume erroneously that a given activity can only be dealt with by a civil or administrative agency, while the latter may tend to ignore it.
On the other hand, an overlap of approaches can have a number of benefits. Most important, an overlap gives agencies a chance to back-stop one another, since one agency can deal with, activities which another has tended to overlook or not adequately attend to. An agency can discover the gaps in another’s operations by monitoring cases which were referred to another agency, by noticing that there are areas of illicit activity which are not being dealt with by the other agency. In the competition for publicity and political stature, agencies can engage in healthy competition with one another for the most significant cases. It is not uncommon for one prosecutorial agency to stir other agencies out of lethargy by prosecuting cases which they should have handled.
In order to facilitate the development of such relationships among agencies in the same geographical area, periodic intelligence or education-business meetings like the ones described for cross-geographical liaison should be held. Such meetings can build trust and communication, but it is very important that the development of such meetings not be perceived to be (or actually be) an effort by one of the agencies to enhance its power. Even if the staff of one agency may feel that they have a legitimate reason for exercising some degree of leadership, they will lose the ability to lead if they do not share cases, leads, and information with other agencies. Local agencies frequently voice the suspicion that federal agencies do not give local agencies information as much as they are expected to give information to the federal agencies. Obviously, such a breakdown of confidence in mutual helpfulness can only help white collar criminals.
If there is some suspicion that one of the agencies is a security leak, information should no longer be sent to that agency. However, just freezing out the agency does not really solve the problem of the other cooperating agencies. All agencies will suffer if needed information is taken out of circulation. To solve the problem of suspect agencies, a carefully thought through plan should be developed to correct the situation. One possible remedy might be to discreetly approach trusted and powerful personnel in an agency which has legal or administrative power over the suspect agency. This approach should make it clear that there is no conclusive evidence of misconduct, just a suspicion. Thus, an effort to determine the validity of the suspicion can very well work to the benefit of an agency which is wrongfully suspected. If the investigation of the agency should prove the agency at fault, then appropriate administrative or legal remedies are likely to follow.
Regional and State Supportive Agencies
All agencies have some limitations on their technical abilities. Some may not have (or have easy access to) investigative accountants, computer experts, auto repair mechanics, legal experts in certain areas, product analysts, etc. Some may have limited ability to make contact with agencies in other states, or in some local jurisdictions. Some may simply not have enough investigators for particular important investigations. Accordingly, it is very useful to have regional or state level agencies which can provide such resources to smaller jurisdictions at their request. In some instances, such agencies can encompass an entire metropolitan area, working in a number of cities. In one state, expert accountants of a state level agency are available on request to work with local agencies, but their salary continues to be paid by the state agency. In another state, the state level department of justice can obtain information from agencies in other states that is needed by local agencies in its own state. In some smaller states, it may be wise to house a computer system for storing criminal justice information in an agency at the state level.
In some instances, such state, regional, or metropolitan-center units can have their own investigative capacity and authority. Investigations by these agencies can be initiated at the request of the local agencies if the director or chief of the latter agency judges that such an investigation is beyond the jurisdiction of his own agency. This inability of the local agency to act on these investigations may simply be the result of a lack of resources. However, in some instances, the local agency may be handicapped by a configuration of political or economic power that it is unable to conduct an investigation except at great cost to itself. In these instances, it is extremely valuable to have a state, regional, or metropolitan agency which is sufficiently strong itself to proceed with the investigation without undue costs to itself. Its base of support is likely to be broader; it may have a more secure civil service position; or it may have greater public credibility. The local agency can then invite the stronger agency to conduct the investigation.
However, invitations to the state, regional, or metropolitan agency need to be responded to with some caution. It is possible that personnel in the local agency are trying to use the power of the stronger agency in a political or legal battle, or as a way of gaining power for itself. The stronger agency would need to do some scouting of its own before it makes a commitment to conduct an investigation on its own. In some cases, it might decide to sever all public and administrative connections with the local agency when it conducts its investigation.
In other cases, the stronger agency would be wise to give partial or even full public credit to the local, inviting agency in order to strengthen it for future investigations and to maintain good relationships between the two agencies.
In some instances, the state, regional, or metropolitan agency may decide to conduct an investigation without being invited by any local agency. Sometimes such interventions are needed because the local agency for reasons of policy, organization, or even outside pressures and influences is neglecting a particular area of crime or a particular case. Obviously, such intervention needs to be done with great care.
A local investigative agency which is either part of a prosecutor’s office or works closely with one can influence a state, regional, or metropolitan agency into action by initiating investigations and prosecutions in an area that the latter agency has ignored, even if it has the legal power to deal with it. This same effect of competitive investigations and prosecutions can also, obviously, be achieved with respect to other local agencies where jurisdiction overlaps with the local agency in question.
Trade Associations
Some trade and professional associations can be important allies of investigative units. Some such associations may be so highly interested in keeping their record clear that they will assist the investigative agency by providing information. Thus it is valuable for a white collar crime unit to maintain close but informal personal ties with trade and professional associations.
Nevertheless, there is always the danger that some associations will try to get an investigative agency to concentrate on cases of particular concern to them, to the exclusion of the agency’s other enforcement responsibilities. Investigative agencies which perceive that this may be happening should examine cases given to them very carefully.
On the other hand, work with trade or professional associations offers important benefits with respect to deterrence. The association can provide a vehicle for communicating information about the policies and goals of the agency, as well as providing an informal network for disseminating knowledge about investigations, prosecutions, and convictions. Hopefully, such ties with the trade and professional associations may lead them to set standards and to monitor the conduct of their own membership.
COMMUNICATIONS WITH THE PUBLIC
Complaints From the Public
One of the most important sources of complaints and investigative leads is the telephone call from the irate citizen-victim, and from more organized sources such as attorneys or accountants for victims, or trade associations. Calls from citizens can go directly to the unit, but may also go through other government agencies or some private ones. In either case, it is important that the unit have its own phone number. But, even where a unit deals with the public through some other organization, it should be concerned as to whether the cooperating agencies have appropriate relationships with the public.
In jurisdictions which are likely to have a high proportion of victims who are poor, aged or infirm, unit offices should be easily accessible to the public; for example, on the ground floor. Victims should not be forced to go through a bureaucratic system before speaking to an investigator or complaint handler. Many aged, infirm, or poor people do not use mail, texting, or email readily and may be inhibited with respect to use of the telephone (they know from experience that they will be asked to come down, or write a letter anyhow). They should have a convenient way of making face-to-face contacts with people in the agency.
A basic problem in relating to the public is the conflict between the need to respond fully and appropriately to complaints from the public and the limited number of fully trained personnel available for this task. Obviously, the best solution is to secure funds to hire some investigators. Nevertheless, in some agencies this problem has been resolved by having telephone calls from the community taken by the complaint handlers who screen the calls, take care of simple consumer problems which appear to be resolvable by mediation, or simply take down some basic information. The primary advantage of the complaint-handler approach is that of economy of resources. However, complaint handlers tend on the whole to be less well trained, less well paid than investigators and lawyers, and are usually somewhat less sensitive to criminal aspects of complaints.
If there are only a very limited number of investigators in an agency (and there usually are), it will be an unwise allocation of resources to have their time taken up with answering calls from the public if the agency is one in which the calls most often turn out to be matters which do not warrant a criminally oriented investigation. This task may be quite demoralizing for highly professional investigators being kept from work they are better qualified to do.
Complaint handlers sometimes are senior law students or other types of students and interns. The advantage of using them is that they are usually highly motivated, have not yet become jaundiced by having heard the same story over and over again, and, since they are working part-time, can better bear the emotional strain of working with the public. A disadvantage is their high turnover rate, which makes training of replacements a problem for the office. Such complaint handlers should report either to an investigator permanently assigned to supervise them; or in some cases a lawyer or legal advisor may be assigned on a rotating basis to help them answer questions.
Some agencies, especially those in police departments or those staffed by former police officers, give investigators direct responsibility for handling calls from the public. A police officer’s general role in part entails taking complaints from the public, so that it is simply an extension of this role to have direct contact with the public in a white collar crime unit.
Although limitation of resources will frequently compel the white collar crime unit to employ complaint handlers rather than investigators to deal with the public, investigator assignments to this work offers advantages which merit serious consideration. First, the investigator is more likely than the complaint handler to ask probing questions of the citizen and to follow up on leads, hints, and overtones. Thus, the amount and quality of the information gained is greater. Furthermore, an investigator is more likely than a complaint handler to be alert and sensitive to the description of a new type of scheme. A complaint handler is probably less likely to be sensitive to such new possibilities. Since white collar crimes take so many new forms, this sensitivity is very important.
Second, in an agency with a high degree of communication among investigators because of an open room, a cooperative spirit, staff meetings, etc., all of the investigators will have developed enough expertise in many areas of white collar crime to be able to handle the initial complaint at least minimally well, even though it might be outside their own area of expertise.
Third, the agency may already have considerable information about a scheme because of victims having called in, and because of general information processing in the agency. If one of the investigators in the office has already opened a relevant investigation, and another investigator takes the call, the latter can readily transfer the call to the former investigator because he will be well aware of other investigations in the agency. The use of an open room in which all of the investigators can hear each other work facilitates this possibility of transferring calls. Having the complaint handlers in the same room with investigators should be avoided because it would create too much noise and confusion.
Fourth, it is more likely on the whole that an investigator will be sensitive to the criminal enforcement potential of a complaint. Complaint handlers are by definition not professional law enforcement personnel and therefore would in general be less inclined to look for criminal involvement. If they have to refer the complaint to an investigator to determine whether there is criminal involvement, the savings in resources is lessened; and many complaint handlers may be inclined to avoid appearing unknowledgeable to both the citizen and the investigators, and may therefore avoid referring the call.
Fifth, the complaining citizen will be much more satisfied in talking with an investigator, especially if the investigator is knowledgeable in the area of the complaint, than in talking with a complaint handler. The investigator is more likely to be able to develop the conversation to generate some very valuable leads, which not only will benefit the investigation but also is likely to be more gratifying to the complaining citizen.
Citizen satisfaction is extremely important for a number of reasons. The great drop in confidence in government in recent years undoubtedly generates some latent skepticism in the citizens who call, and any response by the agency which could be interpreted as routinized, uninterested, or “bureaucratic” will reduce the likelihood of future cooperation with law enforcement in general, and not only with respect to white collar crime.
If an agency has a high volume of telephone calls from other agencies and the public, it will often be advisable to designate one investigator to handle such calls each day, on a schedule prepared by the supervisor. The advantage of this procedure is that the investigators would not be interrupted in the middle of their work on other cases by these calls. If there is a lack of sufficient funds to hire enough investigators and complaint handlers have to be used, then it becomes very important that they be trained to the highest level of professionalism possible and that they be supervised as closely as possible.
Concern for the satisfaction of the complaining citizen implies that the citizen always be given some sense of closure on his call. He needs to know if his call leads anywhere, whether an investigation is initiated or an on-going one assisted. If no further immediate action is to be taken, the citizen should be told that his complaint is appreciated, that the information he provided may very well be used at a future time if additional relevant information is received. It would be very helpful to send a letter to each citizen indicating what happened to his call, even if his complaint was only placed in a standby active file.
It will often be desirable to have a victim or witness come to the office to make a full statement, to present his records, etc. However, such invitations should not be communicated in such a way that the invitation to come to the office is perceived by the citizen as a substitute for an adequate and satisfactory telephone conversation.
Instead, the invitation should be communicated as a natural outgrowth of the telephone conversation. In some cases, the citizen might not be able to come to the office because of infirmity or because of a fear of officialdom and bureaucracy. Such fears are very likely to occur among the poor. The investigator should always be open to interviewing complainants or witnesses in their homes or on some neutral ground, such as a public place.
In some instances units have used the device of sending questionnaires by mail to complainants. These questionnaires are designed to secure relevant information, especially in the cases of potential consumer fraud cases. The use of such questionnaires obviously handicaps the less well educated and greatly reduces the likelihood that they will cooperate with the white collar crime unit, but under certain circumstances can be most efficient and effective investigative tools.
If an investigation continues for more than two or three weeks, it would be wise to send a one-time interim notice to the complaining witnesses to inform them of the state of the investigation, to the extent legally and practically possible. Since the public may have little idea of how long white collar crime investigations take, such reassurances that the investigation is proceeding would be very valuable. When cases are closed without a trial involving the complainant, he should be so informed by a letter which gives the general reasons for the closure.
Informing the Public
Through the press and the media, the public will be informed of major convictions, and even of investigations. However, press releases, or any statement to the press, should be the responsibility of the press relations officer, if any, of the parent agency, or of the supervisor of investigations. In some instances, it will be valuable to allow the press and media to know of an on-going investigation, since the publicity may lead additional victims or witnesses to provide additional useful information. Press coverage of indictments, arrests, convictions, etc., will tend to increase telephone calls and other communication from the public. Much of the information will be useless, but it is important for the unit to be prepared for this input, some of which may be valuable. In any case, publicity given even to indictments, informations, trends, can have a general deterrent effect. The danger of bad publicity, the possible cost of a trial, etc., might be more than some white collar criminals can afford, especially if they are small businessmen who might commit white collar crimes as an adjunct to their business. Obviously, convictions and heavy sentences have the greatest potential for deterrent effect. Furthermore, they enhance the status of the agency in the public regard. Good press coverage can also have the effect of putting pressure on other agencies which have not been very active in combatting white collar crimes and related abuses.
Good press coverage of investigations and litigation also serve the function of warning the public about possible dangers. If the agency has a pro-active policy, the agency staff can go even further and can use the press to warn the public independently of any particular scheme.
Reporters will often be interested in writing stories warning of home repair defrauders, pyramid schemes, gold and silver investment schemes, especially if they represent current dangers to the public. The agency can also inform the public directly at crucial points, or get some private agency or business to do so. Some banks have large posters near tellers windows, warning savings account depositors about the dangers of, for example, con games such as pigeon drops. Investigators themselves should be available to alert the public through talks before civic groups, students, church groups, and public interest organizations.
One especially useful technique used by a prosecutor is to have a radio talk show in which staff members take calls from the public and answer questions about suspected consumer frauds and other white collar crime activity. If this technique is adopted, callers should be warned as they call in not to use names. This technique, if implemented with patience and care, will educate the general public and the particular victim, as well as other staff members in the unit who can learn from listening to the talk show.
Storefronts and Other Ways of Reaching the Community
One of the major difficulties in fighting white collar crime, especially consumer fraud, is that parts of the population are either very reluctant or unable to report their victimization to a government agency. When a substantial group of such people reside in a community, the unit should at least consider the possibility of reaching out to the group and making its representatives readily available to them. The unit may also wish to make the handling of victimization of such groups its major mission. This outreach can take a number of forms: investigators, assistant investigators, or complaint handlers could visit old peoples’ homes and organizations for the aged, union halls, fraternal organizations of minority groups, etc. They can make presentations to these groups, explaining what their units are doing, distribute literature to them, and then simply visit the group on a regular basis to take complaint reports.
In order for such outreach efforts to be successful, the outreach workers should be people who understand the client group or are even members of this group, for example, union members, retirees, etc. Furthermore, the outreach effort needs to have the support of the organization through which the target group is being reached. In some instances the organization may initiate the contact. On the other hand, such outreach efforts may lead to a greater influx of complaints than the unit is prepared to handle. Obviously, there needs to be a coordination between the outreach efforts and the ability of the unit to provide satisfactory service to a target population.
One potentially highly effective way of reaching these target populations is to establish storefront offices in specific neighborhoods. Such operations generally stress mediation and civil or administrative remedies but do not necessarily have to do so. In one populous urban area, storefronts were successfully set up by the police department with a great emphasis on criminal remedies. Operations which stress non-criminal remedies can be a most important source of information leading to development of criminal cases.
The success of such storefronts depends on a number of factors. They must be supported by the local community even before they open. Such support can come from local organizations, from local businessmen who do not want their reputation affected by a few predatory business people, etc. Support can be generated by using the local newspapers and other media, but this should be done under explicit sponsorship of an organization or person already established and respected by members of the target population. For best effect, the plans with respect to location, staffing, procedures for the storefront should be worked out
in collaboration with local organizations or leaders.
A storefront should be located in a well trafficked place within the target neighborhood. It should generally not be located next to a police station, since this might inhibit some citizen complainants. The appearance of the storefront should blend into the neighborhood. It should not appear to be too official; furnishings should be comfortable, but not “fancy” or “posh”; access to desks, investigators, etc., should be direct and obvious, with no need to wait in anterooms.
As in the case of other outreach efforts, personnel manning these storefronts must be able to readily establish rapport with the people in the neighborhood. Preferably, they should be of the ethnic or other group which predominates in the area. Even more than in other units, investigators in storefront white collar crime units should be immediately available to the public and should act on cases on the spot. It is more important to follow up on a complaint immediately than to put off the follow-up until a time in which the investigator’s efforts can be more effective. The people in the neighborhood need to learn that the investigators are really concerned with their welfare. If the best procedure is to refer the complaint to another agency, the investigator himself should handle the referral (preferably by a telephone call while the complainant is present) and follow through as much as possible personally. Even though this may be time consuming, this effort will pay off in community support and trust. One storefront which was geared toward serving the local Spanish-speaking community was so successful that it drew others from great distances, well outside the immediate neighborhood in which it operated.
Most of the complaints will not call for criminal remedies. Of course, when the storefront is run by an agency which is strongly oriented toward possible criminal remedies, potential criminal cases are less likely to slip through the cracks.
The storefront should develop its own publicity system, geared to local, community newspapers and media. When its investigations lead to a conviction or other remedy important to the community, the storefront and its staff should get full credit for it.
The storefront staff also needs to maintain communication with the police patrol in the neighborhood. The patrol officers can refer citizens to the storefront, it gives the patrol officers a convenient place to refer the citizens, and if the referral leads to citizen satisfaction, the patrol officer shares in some of the credit. Furthermore, satisfied citizens may occasionally volunteer information about street criminals to investigators who can then pass it along to the appropriate units. However, such intelligence should never be requested from a citizen, since the citizenry might interpret such requests as showing that the true purpose of the storefront is to develop such intelligence information. Such an interpretation can destroy the vital credibility of the storefront and its parent agency.
Storefront staffs should also maintain close communication with other white collar crime units, so as to refer more complex cases to them and to receive assistance and advice on cases which they handle themselves. These staffs should, whenever possible, be in a position to retain the right to conduct investigations of complaints they receive throughout the geographic jurisdiction of their parent agencies, or to participate in such investigation, even if they have to work in some other unit’s geographical area. The reason for this is that the complainants are more likely to be cooperative if their cases are handled by the storefront staff with which they have good rapport.
PROSECUTOR-LAWYER-INVESTIGATOR RELATIONSHIPS
Some of the most complex and potentially difficult relationships that investigators have are those with the prosecuting attorneys. Potential difficulties result in part from differences in training, and in objectives. The differences in training are obvious, but the differences in objectives are sometimes subtle. For example, the prosecutor will be concerned with the problem of succeeding in court, where the ultimate disposition may be outside his control, while the investigator may be more interested in simply bringing someone to trial and letting the court determine guilt or innocence. The prosecutor will be concerned about sharing his resources among different kinds of cases, while every investigator is concerned for his case. The prosecutor may be more concerned with the legal strength of the evidence than the investigator. The prosecutor may not be fully informed about the intent and nature of the criminal activity in the community. The prosecutor may have a different set of priorities concerning which type of cases to prosecute than the investigator.
The tensions and miscommunication that result from these problems obviously do not assist in facilitating the prosecution of economic criminals. Some ways of minimizing these problems are suggested below.
Lawyer / Investigator Teams
Probably the best way to minimize these problems is to have lawyers and investigators be part of a single unit or team. (The term lawyer will be used occasionally in this section because in some instances the lawyer may be assigned exclusively to the investigative unit and may not actually prosecute the case.) Teams can consist of one lawyer and one investigator, or one lawyer and several investigators; working either as a total team or as a series of teams; they can be temporary or ad hoc teams working on a single case or set of cases, or there can be permanent assignments. Differences would depend on the number of personnel available, the nature of white collar crime in the jurisdiction, the volume of the workload, etc.
The advantages of having teams are, first, that the lawyer and the investigator can exchange information, theories of cases and hunches, as close to the outset of an investigation as possible. In this way, the investigator can start collecting information and evidence in the most effective way from the very beginning of the case. On the other hand, the lawyer can become much more thoroughly familiar with what is often a very complex web of evidence. Team members should have as much direct contact as possible on both a formal and informal basis. For example, they should have adjacent offices; or share one very large office; or they should feel free to telephone each other directly, without having to go through any intermediaries. It is not conducive to effective team functioning to make the lawyer just available for consultation when needed. The contact should be regular, informal, and unhurried, so that leads, nuances, and theories can be fully recognized and developed.
It is essential that there be mutual respect among all the team members. The lawyer needs to respect the skills, knowledge, and effectiveness of the investigator, and vice versa. This should not mean that there be any confusion of their respective and different roles and functions, but rather that there be an awareness of their respective responsibilities and a desire on the part of each to give the other that understanding support which will maximize the effectiveness of each in best fulfilling his or her own role. When there is a mutual rapport, the investigator’s motivation will be greatly enhanced, leading to better investigative accomplishments.
Teams with investigators as the supervisor, as well as those with the lawyer as supervisor, have both been found to be effective. For example, a group of several investigators, under the direction of one of their number, may have a permanently assigned lawyer as part of their team. Or, the team may consist of investigators under the supervision of a deputy prosecutor. More important than the pecking order of the hierarchy is the amount of respect for competence. Lawyers who respect the competence of the investigator team leader can take direction from him or her.
There are a number of advantages to having teams, in addition to those set forth above. Investigators can learn better about the subtleties of gathering legally viable evidence. They receive steady feedback as to the effectiveness of their performance. They are more likely to avoid false expectations about the evidentiary value of certain types of information. They will be more likely to be directed toward the same goals as the lawyers. They will be less likely to unfairly blame the lawyer for any failure to prosecute or convict. On the other hand, the lawyer will know that he is working effectively toward his goals. He will learn to appreciate the skill involved in investigative work. He may develop some investigative skills himself. Lawyers have gone out to interview witnesses together with investigators in instances in which the interview was important and the information legally complex or subtle.
In white collar crime prosecutions, investigators and lawyers (particularly where “teams” are involved) will customarily go to court together, the investigating lawyer trying the case.One advantage of the teams following all the way through together is that the investigators can bring their frequently greater detailed knowledge to bear on the case and can thus greatly assist the prosecutor. Furthermore, the investigator’s motivation in subsequent cases would greatly increase because of the respect that going to court implies and because he can see the end product of his activities (and its pitfalls) more clearly. Furthermore, he gains some depth of knowledge of the law and of the lawyer’s objectives. But probably most important, the “team spirit” is greatly enhanced by the follow-through and is thus well worth the cost.
Cross-Agency Contacts, Between Investigators and Lawyers
In most instances, investigators and lawyers or prosecutors are in different agencies. This separation does not necessarily mean that prosecutors and investigators will not develop informal teams or even formal teams across agency lines. When an investigator begins to see that he is dealing with a complex of legally difficult cases, he should be able to turn to a prosecutor in the other agency and develop a working relationship with him. This can be done either by going to the supervisor of the prosecutor, or by going directly to a prosecutor, whichever is administratively acceptable to the latter’s agency. The supervisor in the investigator’s agency should be informed of the procedure, but the investigator, as a professional, should be free to develop teams as he sees fit, and as he is able to interest and persuade others to work with him. Obviously, such teams might become more or less stabilized as the two members learn to work with each other, especially if they develop an expertise in certain types of cases.
When such teams do not develop, and the investigators must present their investigations to the prosecutors to see if they will take the case, the investigator is almost automatically put at a disadvantage by the very fact that he has to assume the role of a salesman trying to get the prosecutor to buy his product. It is important that the investigators have both the skill and self-confidence to make a strong case to lawyers. Such self-confidence can be enhanced by the investigator’s knowledge that his supervisor condones his arguing with lawyers.
If a prosecutor declines to take a case, the investigator should be informed of the reasons, preferably in a face-to-face meeting so that the investigator can ask questions and learn from the experience. The investigator should realize that prosecutorial evaluation is not an exact science, and that reasonable people can disagree; Within the prosecutor’s office there may well have been disagreements. Discussion in connection with a declination, if it is conducted with civility and understanding of the participants (disagreements do not have to be papered over) can set the stage for more receptivity the next time around.
Selling the Case
The prosecutor who is not part of a team developing white collar crime cases together with the investigator will have to be persuaded to go forward with the “package” brought to him or her by the investigator. This holds true for proposed civil, administrative, or regulatory action, as well as criminal action. The fact should be faced that this is a sales transaction, though it may appear in many guises.
Like any other product, the case will sell better if it is a good product, if it is well packaged, and if the “salesman” has given adequate thought to needs and capabilities of his market.
The Basic Product
Whether the investigation is complete or not, the investigator should be sure that he has gathered as much evidence as possible, within the limits of his resources, before he goes to the prosecutor. How much work he can be expected to have done depends on what he wants from the prosecutor, and the constraints placed on him by his own organization.
In some cases, the investigator is quite able to present a complete package to the prosecutor, which the prosecutor will be able to reshape and select from to make his own case. While the prosecutor will frequently wish follow-up on some line of investigation, it is important that no obvious line of inquiry be omitted without some clear justification. Where there is what purports to be a complete package, the investigator must be able to demonstrate clear awareness of the legal elements of the case, and have admissible, competent, and persuasive evidence on each such point.
In other instances the investigator will have gone as far as he can go to make a case, and gathered adequate evidence on all but a few crucial aspects of the case. He will look to the prosecutor, who will have recourse to subpoena power through the grand jury or inquiry judge, to “close the circle” by obtaining this missing evidence. In these instances, it will be essential that the investigator have exhausted every other possibility for obtaining evidence on the missing pieces, and that the portions of the investigation which he has completed are more than usually well done.
Packaging the Case
Before the investigator takes the case to the prosecutor he should carefully consider how it will be presented. The best case may be turned down if it is not well presented; relatively weak cases will be accepted and enthusiastically pursued if well presented and if prosecutors are convinced that some victim or public interest will clearly be served by going forward.
Some investigators, present their cases in the form of written referral reports, outlining the theory of the investigation and summarizing the evidentiary elements available to successfully conduct the trial. Where this technique is used, such reports may be hand delivered, and followed up by personal visits which will invite the prosecutor to clarify any doubts or questions he may have and to jog him into taking the time to carefully review what has been offered to him.
In other instances the investigator vlill rely on an oral presentation, in which he refers to specific investigative reports or items of evidence as necessary. Here, there must be greater reliance on personal persuasiveness and organized advocacy. Since prosecutors will frequently postpone their decisions as to whether or not to take a case, this method presents the danger that after the investigator leaves the effect of persuasiveness may wear off, leaving the prosecutor with a mass of paper that has to be painfully digested and organized, always a justification for further delay which in turn increases the likelihood that a case will be declined for prosecution. I t’s important, therefore, that at least some short written outline of the proposed case be left behind, and that the investigator follow up to answer questions. This same “short outline” will also serve the purpose of helping the investigator to effectively organize his oral presentation.
In cases in which the scheme is quite complex and difficult to communicate, the investigator should consider a visual, diagrammatic presentation to the prosecutor. This can be done by means of a link-network analysis or a time flow analysis, in which the complexities of the scheme can more easily be seen. This diagrammatic presentation should of course be accompanied by either a written or verbal description, or both.
Knowing the Customer
Before the investigator presents his case he should consider what the prosecutor’s own interests are, how much the prosecutor knows about white collar crime prosecutions, and what competition he must face, in securing the prosecutor’s attention.
If the prosecutor has an established office interest in white collar crime, it will obviously be easier to persuade him to accept a case. It is important to realize that some deputy prosecutors will be more receptive than others to such cases, and therefore it may be possible (particularly in smaller offices) to interest a particular deputy in a case. Even where there is a formal referral channel, once an investigator knows there is a receptive deputy the referral procedure can be facilitated by an informal approach for advice (it should be for genuinely desired advice which helps the investigation) which could set the stage for a later “logical” assignment to the same deputy.
The “market” can be pre-sold by interaction between the white collar investigative unit and the prosecutor which focuses on general objectives rather than on specific cases. For example, the supervisor of a white collar investigative unit can make regular calls on the prosecutor or his chief deputy, or the head of a major crime prosecution unit, to generally advise him about the investigations under way, patterns of victimization in the community, etc., all of which will help in three ways:
- When a case is brought in it will not be a cold presentation coming out of nowhere, but at least some interest and appreciation for it will have been built up beforehand
- If the prosecutor is simply not going to take some kinds of cases, it is better to know it beforehand
- Such interaction will give the investigators a feel for what kinds of white collar crime cases particularly interest the prosecutor, for example, will serve to identify products for which there is a specific demand
In some instances the investigative agency will have a choice of prosecution agencies to whom a case can be presented. For example, state investigative units may be able to approach their attorneys general, any one of a number of county prosecutors, or even in some jurisdictions (in the case of matters subject to handling as misdemeanors), city attorneys. Sometimes a local investigative agency will wish to present a case to federal authorities, either because of local lack of interest or resources, or because of the investigative agency’s lack of confidence in the integrity or courage of a particular local prosecutor.
Knowing the problems of the local prosecutor can also help. White collar crime cases are time consuming, and both the white collar crime investigating unit and the prosecutor should support the other in acquiring resources for this purpose, Finally, the timing of a referral to the prosecutor is most important; for example, white collar cases can frequently be delayed for a week or two, and it is rarely wise to walk into a prosecutor’s office to present a complex case when that office is up to its ears in some major crisis situation which demands all its attention.
Going to Court
In many prosecutor’s offices, a station system is used, one deputy prosecutor doing the filings, another the arraignments, etc. Such a system might be efficient for ordinary street crime; however, white collar crime is not prosecuted often enough for the typical deputy prosecutor at each station to become expert on the case. Furthermore, the cases vary tremendously in scheme, type of transaction, etc., so that it is difficult to build up expertise. Thus, in many cases, station-posted deputy prosecutors who are not specialized in white collar crime or who are not expert in a particular type of white collar crime will not be able to deal with the case as well as they should. It then falls on the shoulders of the investigator to track the case through the system, explaining the case to each of the deputies involved in the process.
To help reduce the problem of the deputy prosecutor who is not expert in a particular type of white collar crime, investigators can invite prosecutor’s staffs to attend their training sessions, or alert the prosecutor to the existence of special training courses being conducted on a statewide, regional, or even national basis. This special training for the prosecutor would be especially useful when the crime involves products or business procedures of considerable technical sophistication, such as internet frauds, stock market transactions, etc. Another way in which prosecutors can acquire more technical knowledge is for them to be heavily involved in the investigative process, working closely with the investigators in this area. Furthermore, a very thoroughly and deeply prepared case can also increase the technical knowledge of the judges during the process of litigation, especially in trials. In fact, the judges, like other people involved in the justice system, may recognize that they too have probably been victimized and therefore may find additional value in acquiring this information. In at least one instance, a judge recessed a trial in order to inquire of an investigator where to take a relative’s damaged car for repairs. In another jurisdiction, the investigators presented background technical information (not on any particular investigation or case) to judges during their regular weekly luncheon meetings. In the case of complex schemes, visual, diagrammatic presentations help to communicate the scheme to both judges and to juries. These diagrams can be Link Network Analyses or Time Flow Analyses diagrams.
In many cases, especially those involving consumer fraud, expert testimony is needed in court from such people as engineers, chemists, or mechanics. A team of such experts can be developed from a variety of sources: universities, not-for-profit businesses, testing laboratories, police auto mechanic shops, etc. The advantage of using such a team is that they can establish their competency and credibility in court once and be used again and again. Furthermore, they learn how to effectively deliver their testimony and respond to cross-examination. It is important to have experts who can communicate with non-experts, who are not so accustomed to jargon that they can’t speak in plain English, and it is most important that the investigator be prepared to help identify and recruit these people.
Investigators can provide useful background and related information to help courts make bail and personal recognizance decisions, and to assist the court through probation departments which must prepare pre-sentence reports. Investigators often have information relevant to the questions of whether a defendant will flee the jurisdiction and whether a heavy sentence is called for. Since white collar criminals often make a fine appearance in court and may have some degree of social prominence, giving the judge and other court personnel such background information becomes especially important.
Sharing the Credit
When cases are taken to court, both the prosecutor’s office and the agency should receive their fair share of the credit. If both the prosecutor’s office and the agency have investigative staffs, the problem becomes more complex. In some cases, the other agency might be willing to turn over incomplete but fruitful investigations to the prosecutor’s office, or even to do an investigation jointly. However, such flexibility can continue to exist only if the prosecutor’s office does not keep the highly publicized big cases and leave the other agency with the minor cases to investigate, or with cases which are important but which are perceived as trivial.
INFORMATION PROCESS FLOW
The degree to which a unit achieves it goals without excessive costs can be greatly affected by the way in which information is dealt with in the unit. How the information is handled affects the quality of decisions .to proceed with investigations, to stop them, or refer cases to other agencies; the degree of understanding of the schemes themselves; the appropriate use of information for the development of cases in the future; the fast recognition of patterns of complaints and of criminal rather than civil involvement; and the effective coordination of activities with other agencies, criminal or civil. Furthermore, information needs to be handled so that supervisors can keep track of work loads; of progress on investigations and of coordination with other agencies.
In the following sections are described some ways in which information can be handled effectively. These are only suggestions; obviously, local circumstances can dictate wide deviations.
Files
In order to effectively process information, a database of at least the following data sets that can be stored or generate reports should be designed as follows:
- A File of On-Going Investigations – This data should be organized by suspect, including business names and AKAs , and should carry the name of the investigator, the date the investigation is opened and the type of complaint. The actual investigative file containing the evidence and notes of on-going investigations is best kept by the investigator on the case. When cases are closed, these working files should be transferred to the unit’s files.
- A File of Investigator’s Workload – This kind of data duplicates the first but is organized by investigator and by case. This file is kept by the supervisor. As part of this file the supervisor should keep the weekly narrative updates of the investigation, to be described below.
- A List of Previous Complaints – The lists should be organized by victim and by suspect, including business names, and AKAs.
- Other information – In addition to the above, each entry should contain the date of the complaint, the type of complaint (consumer fraud, stock swindles, land fraud, etc.), and the dates of alleged commission of the fraud, and nature of the disposition. If the disposition involved a full investigation, the file should contain the name of the investigator, the status of the investigation (closed, open); and the number and location of investigative files.
- Reports of Non-Investigated Complaints – Actual complaint reports which did not lead to investigations should be organizable by suspect and victim and should be referred to in the file of previous complaints. There should be at least one designated individual, such as an executive data manager whose responsibility it is to maintain these files.
A commercially available intelligence analysis, case management software, and/or crime analysis software solution may provide adequately for this need. Most modern police agencies have systems in place for this purpose.
Information Flow and the Handling of Complaints
In many types of white collar crimes the investigation process begins with a complaint to law enforcement from someone seeking some form of redress for some problem. Upon examination, the complaint may reflect nothing more than the anger of a victim who has made a bad investment or a bad purchase, or who has a personal motive to cause trouble for another. An initial complaint, which may take a variety of forms ranging between these two extremes, will rarely provide an investigator with a total case, for example, indications of all of the required elements of a crime. Even the most innocuous complaints may be the first indication of a criminal fraud. Investigators must therefore become familiar with the process of handling complaints whether or not they are themselves directly involved in the process.
In the discussion below the person who receives the complaint from either a citizen or another agency is referred to as the intake agent. This person can be an investigator, assistant investigator, or complaint handler. The term “investigator” refers to the individual who will be responsible for investigative follow up on the complaint. It is important to note that the intake agent and investigator can be one and the same person. The terms “intake agent” and “investigator” refer to functions, not persons.
In offices in which investigators also serve as intake agents and the influx of reports and complainants is of high volume, then the investigators might have a rotating assignment of acting as intake agents for a day at a time.
Established policies and procedures for complaint handling, whether formal or informal, exist in practically all law enforcement agencies. Regardless of the particular policies and procedures established in any individual agency, an investigator dealing with complainants should always aim to accomplish two things: (i) obtain full details in matters that have potential for legal action, and (ii) avoid spending time in collecting information which is not pertinent to legal action. The degree of difficulty in achieving an optimum balance between these two aims will usually be influenced by agency policy regarding public services and maintenance of good will. The difficulty is especially great in agencies dealing with consumer fraud, which must provide for sufficient time to insure that complainants feel that the person receiving the complaint is sensitive to their predicament.
When reports are received by the agency, the intake agent receives a telephone call, reads a letter or report from a complainant or referring agency, or speaks to a citizen who walks in. The intake agent should get as complete and specific information as possible as to what occurred. New staff should be provided with a checklist of information needed, or preferably with intake report forms in sufficient detail to elicit information adequate for intelligent assessment of the complaint and possible follow-up. This latter point should be stressed.
Figures 1and 2 are two examples of complaint forms. The first, Figure 1, is extremely simple and open-ended, leaving much to the skill of the intake agent. Figure 2, on the other hand, is better structured providing the individual taking the complaint or report with clear guidance as to the kinds of information which are needed and the kinds of questions which should be asked to get such information.
Only a small percentage of public complaints might warrant more investigative follow-up than a telephone call or letter, perhaps to the subject or to another public or private agency. The intake agent must be able to distinguish such situations from those which might involve a crime, or investigation in support of public or private civil litigation. To do so, in each complaint handling situation he must be able to put into immediate use a sound knowledge of the common elements of white collar crime and principles of interviewing.
Interviewing and gathering documents from the initial complainants and other victims may not always be sufficient to establish a clear picture of the alleged scheme, or to determine whether the elements of a white collar crime are present. In some instances it will be clear that there is a danger that the follow-up investigation may be hampered by its premature disclosure to the subject, who might alter his modus operandi to confuse the investigation and prevent collection of evidence, destroy evidence, or take other steps to sidetrack the investigation. Complainants and other victims should, in such cases, be warned against contacting the promotor. In addition, the investigator should keep in mind that if, despite these precautions, word of the investigation prematurely leaks out, he should be alert to attempts by the subject to interfere with the investigation or to corrupt witnesses, and he should collect any evidence with respect to such attempts; this would not only be relevant to his original case but may also provide a basis for additional charges of obstructing justice, subornation of perjury, compounding a felony, and similar crimes.
FIGURE 1
COMPLAINT REPORT
FORM DATE:
SOURCE OF COMPLAINT:
NATURE OF COMPLAINT:
DISPOSITION:
INTAKE INVESTIGATOR:
***
FIGURE 2
REQUEST FOR INVESTIGATION
NOTICE: The legal staff of the District Attorney’s Office is not permitted to engage in the private practice of law or to furnish legal advice in civil matters.
VICTIM NAME:
VICTIM CONTACT INFORMATION:
SUSPECT: List name and contact information of firm or individual complaint is being made against. Identify salesman or representative dealt with.
DATE OF OCCURANCE:
AMOUNT OF LOSS:
LOCATION OF OCCURRENCE (City and County):
DETAILS:
Do you have any witnesses?
Have you contacted an attorney? If so, who?
Are any civil actions (law suits) pending?
Have you contacted any other agencies? If so, please list:
Do you know any other victims? If so, please list:
Are you willing to sign a formal (criminal) complaint and testify in Court regarding this matter?
Briefly explain the facts upon which you are basing your complaint, including first contact from suspect:
*Attach addition remarks and copies of contracts and correspondence to this form.
TYPE OF COMPLAINT:
Criminal ( ) Consumer ( )
Money/Prop Recovered Fines or Damages:
Senior Citizen?
Intake agent:
investigator:
In cases in which there is any possible suspicion that a crime is involved, the intake agent and investigator should avoid involvement in mediating a settlement between the complainant and the promoter. A fraudulent promoter will be only too happy to make a few refunds at the urging of the intake agent or investigator, partly because these payments may be well within what he would expect to be the costs of doing his business, partly because this puts the intake agent or investigator in a compromising position in any follow-up. Furthermore, the agency would be in the position of generating a settlement using the color of authority; for example, it would be a collection agency. Some complainants may in fact hope that the unit’s involvement will cause the promoter to pay the victim/complainant. This may often be the case when the complaint is made by the victim’s lawyer.
Sometimes a victim, after having filed a complaint, will receive an offer of restitution from a fraudulent promoter, even when the complainant does not expect it; and will sometimes notify the investigator that such is the case and ask his advice about whether to take it. The investigator’s response in such cases should consider the needs of the victim; the potential weakening of the case in court; the weakening of the motivation of the victim to cooperate as a witness; the vulnerability of the complainant/victim as a witness. The investigator cannot, however, indicate that he would drop the investigation because of promoter’s payment.
In some instances, the complainant may indicate that he is bringing a civil suit as well as call’ing for a criminal investigation. He may then be reluctant to part with some of the relevant documents. The investigator can sometimes obtain copies which are useful for some legal purposes, although he will need the best available evidence in a trial.
In some instances the investigator can obtain cooperation by pointing out that the criminal investigation will support a civil case. In any event, the investigator should painstakingly nail down the details of how custody of the evidence will be maintained if he fails to get possession, and should carefully transcribe the contents or detailed substance for his records.
As soon as information is obtained and even while the complainant or reporter is on the telephone or in the office, the intake agent should consult the list of on-going investigations. The intake agents should have ready access to such a list. If there is already an on-going investigation, the complainant should be so informed. If the investigator already on the case is present in the office and available, the complainant should be directed to that investigator or the telephone call transferred to his line. It is important to have a telephone system which makes such transfers easily accomplished. At the same time the report form should be taken by the intake agent to the investigator on the case. If the latter is not available, the citizen or the person from the other agency should be so informed and told that the report has been sent to the appropriate investigator who will contact the citizen or person from the other agency regarding further action. A copy of the complaint should be sent to the person who records complaints and to the individual in charge of unit files.
If the intake agent finds that there is no on-going investigation, he should then consult either the card file or computer printout to determine if there have been any other previous complaints and investigations regarding this same suspect. If there have been previous investigations of this suspect the intake agent should refer the complainant and the report to the previous investigator, in the same manner as is done with regard to on-going investigations. The previous investigator can then take any further investigation of the new complaint deemed necessary.
If the new information appears to make it worthwhile to reopen the case, he can then request permission to reopen the case from the supervising investigator. If the new information does not at that point indicate a reopening of the case, this should be noted on the report, which should then be sent to the person who records the complaints with a copy to the supervisor and the investigator.
If the intake agent finds a record of previous complaints regarding the same suspect but no previous investigation, he should so inform the complainant or referring agency, and should indicate that it will take time to determine what action is needed because the current complaint must be considered in light of information previously received and considered. It is important that the complainant be informed so that he does not feel that the unit is neglecting him. The intake agent should then refer the report, along with the list of previous complaints to the investigator who is most expert in the type of possible scheme. If he is not certain who the most expert investigator is, the intake agent should consult the supervising investigator. Again, all of the recording reports should be made as indicated above.
If the intake agent finds no previous complaints, he should then obtain full information in order to preliminarily determine whether the matter should be considered from a criminal standpoint; or if it would be worthwhile to pursue from a civil point of view; or if it is one that could be “adjusted” by mediation between the complainant and the person who is complained about; or if it is a complaint that is apparently groundless. Intake agents who are not also investigators should have a checklist of cues, guidelines, or indicators as to when to view a given complaint or report as having criminal aspects. If a matter appears to warrant further investigation, the report should be referred to the most expert investigator in the manner described above. If it appears to be worthy only of mediation, either the intake agent or an investigator can follow it through. If the complaint appears groundless, a report should still be made out and filed in a way which facilitates its retrieval because subsequent information may place the complaint in a different, more important light. If only an intake agent is involved, he should delegate the classification of the complaint to his supervisor for the record. If an investigator is involved, he should do the classifying.
The.advantages of proceeding in this way are, of course, that maximum use is made of previous information; second, decisions as to dispositions of the complaint are made more frequently by the most expert investigator, thus bringing his expertness to ‘bear at some point; and third, the use of previous complaint data maximizes the potentiality for recognition by the investigators of criminal rather than just civil or mediation potentials of a complaint.
In instances in which no investigation for criminal activity appears warranted but civil action seems justified, the complainant should be referred elsewhere, for example to the civil side of the prosecutor’s office, or to some other governmental agency with appropriate jurisdiction. In some jurisdictions, it may be worthwhile to refer the complainants to local trade groups or to suggest that the complainant see an attorney or seek the aid of publicly funded legal service agencies.
In offices in which the person acting as intake agent is a complaint handler or assistant investigator, then the supervisor should examine their reports daily to determine whether they are handling the cases properly, and especially to determine if they are overlooking possible criminal aspects of cases that were treated as civil or “adjustive.” He should inform the complaint handler or assistant investigator of his evaluation of their performance, regardless of whether it is satisfactory or not; the complaint handlers need to know how well they are doing; giving feedback only with respect to problems will tend to cause difficulties of communication.
Information Flow and the Conduct of Preliminary Investigations
When the investigator gets the information from the intake agent, he can then make a judgment as to whether he needs to gain any further information in order to decide whether a full investigation is needed, for example, whether to continue the preliminary investigation. Such “preliminary” investigation should take no more than a brief period of time. After the investigator has what he judges to be enough information to make a decision as to whether to proceed or not with a full investigation, he should then request permission from the supervising investigator to do so. The supervisor can then make a decision in the context of the goals of the office, the resources available, workloads, as indicated by the supervisor’s list of each investigator’s cases; the pro-active or reactive policy of the agency; other agency policies. The supervisor, in consultation with the investigator, should then assign a level of priority to the case on the basis of the same criteria.
Supervisors must be especially wary of directing too much effort into reactions to “big” cases, to avoid neglect of other important tasks, particularly proactive investigative efforts. A parallel problem can result from receiving a great many “good” referrals from another agency, public or private, which would then tend to tie up the resources of the agency.
In the preliminary investigation stage, the investigation should be given a name or title. If the unit is capable of employing this approach, a decision needs also to be made at this point as to whether the investigation should proceed with a lawyer involved (who may be a lawyer within the unit or agency, or a prosecutor). This decision should be based on a number of factors such as the apparent complexity of the case, and the degree of legal sophistication of the investigator. Of course, teams can be established after the investigation has been started, if deemed necessary.
Information Flow and the Conduct of Full Investigations of Full Investigations
Once the investigation begins, the supervisor of investigations should not monitor the investigator’s or team’s work too closely. The investigator or team should be accorded full professional respect. Unobtrusive monitoring can be accomplished by an open room arrangement in which the supervisor can observe all investigators at work; by his list of current full investigations being conducted by each of his staff, or by a concise one paragraph narrative report by each investigator or team each week or month on each of his on-going cases. Monthly reporting is more appropriate for major fraud cases. The report may often be no more than one or two sentences in length, since the reports are essentially weekly or monthly logs and are therefore cumulative.
Maintenance of Files
The investigator should indicate if each investigation is active or inactive. An active investigation is one in which the investigator was collecting information or was actively working with the prosecutor that week. The supervisor can thus get an idea of the actual workload and progress of each investigator, can easily see which cases are open, and how long each case has been open. By using this system, the supervising investigator can keep abreast of the caseloads of each of his investigators and keep track of their work. If the supervisor is well qualified, and if he has able and well-motivated investigators working with him, this level of supervision should be not only adequate but also highly supportive and effective. To the extent that a supervisor’s investigators fall short of this ideal, he may observe their work a bit more closely and make suggestions where useful. However, such observations and suggestions should be carefully tailored to the selective expertise of the supervisor and the investigator.
The investigator should be responsible for the organization of his or her own files. No investigator should simply rely upon file clerks and secretaries to keep his files for him. A frequent review of each file should be made to see that it is being kept in an orderly manner, that information is not misfiled, and to check and see that all of the information in the file has come to his attention. It’s a desirable practice for the investigator to mark the face of each letter, memorandum, and anything other than original copies of evidence to be placed in the file. File clerks should be instructed not to file matters which have not been so marked, but to route the document to the investigator. This practice will prevent matters from reaching the file prior to examination by the investigator.
After a file has become more than a simple report, it should be broken down into elements, such as correspondence, memoranda, financial records, witness affidavits, etc., to facilitate orderly examination. A complex investigative file in nothing more than ascending date order is difficult for the investigator to manage and very difficult for anyone else to digest. An unorganized file will plague the investigator and those who follow him, and will probably confuse the investigation.
Facts in an investigator’s head, not reduced to writing and filed in their proper place, are lost as far as any effective use being made of them. Investigators, after a few years on the job, learn that small details are important and feel the frustration of trying to understand and use disorganized and incomplete files left by their predecessors.
In addition to organizing the file, the limitations of digital and physical storage space in most investigative units demand first that the files be shorn of duplicate copies of the same document, and of documents that could have no conceivable use in future investigations. It may be useful to assign an experienced secretary the job of periodically cutting down the size of non-active investigative files. Second, it may be more economical to place the investigative documents in digital format than to secure additional files and space in which to place them. However, when digital storage is used, care should be taken to retain original documents necessary for use in court.
Semi-Annual Summary Reports
The need for semi-annual summary reports was forcefully stated by one investigator as follows:
An investigator with a substantial work load will soon find cases getting stale, having been pre-empted by more important matters. Therefore, at least semi-annually, an investigator should review all his open files and write a summary report which will bring together all the important facts, express the suspicions he has as to the violations which may have occurred, propose actions necessary to resolve the matter, and peg as closely as possible the last day on which the statute of limitations will run and the case die for failure to act.
Efficient investigators can handle many cases at one time and the summary report will help the investigator to properly assess his priorities and not lose track of meritorious older cases.
The summary memorandum is also an excellent way of keeping supervisors advised of the progress being made on cases.
Use of Technology and Monitoring for Patterns Within and Across Agencies
Digital filing via databases and case management software can be used to control the flow of information in a unit. However, there are a number of other advantages to the use of computers. One of the main advantages is that the computer can greatly assist the investigator with respect to the recognition of patterns of complaints either about a given suspect, or of a given type of white collar crime. For example, at the end of each week, or month, a computer can generate a list of all the complaints received during a specific time period. This list can then be scanned by the supervising investigator to see if there are any such patterns. The computer can produce a report of all of the complaints against a given suspect during a given period, or all of the complaints of a given type, or the locations of certain types of complaints. Some algorithms may automatically detect patterns.
NIJ Funded Software Tools, Apps and Databases
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Information regarding patterns can then be used by the supervising investigator in a number of ways. First, by looking at all complaints of a given type, he may notice a pattern of complaints against a particular suspect which would not be apparent in weekly or monthly unit summaries. Similarly, he may recognize that such a pattern of complaints against a suspect, each one of which may seem worthy only of civil, administrative, or mediation remedies, in toto may strongly suggest the need for a full investigation. Second, the increases or decreases of certain types of complaints revealed by computer generated reports may suggest that resources should be shifted from one type of investigative emphasis to another.
There is a great advantage to the use of one computer database by all the agencies in a given geographical area for complaint handling. All of the complaints can be funneled into one central database. In that way, there is a greater possibility of recognizing patterns which might not be recognizable by any one of the individual agencies because the complaints have been received by a variety of agencies. Should such a regional system be used, any of the cooperating agencies could review the regional computer generated report. If a pattern is recognized from the input of several agencies, the reviewing agency can then inform each of these agencies of this fact. Then the agencies could decide among themselves which one or ones should proceed with an investigation if needed. Information could then be shared among the agencies. This procedure of coordinating across agencies is, of course, dependent on the development of a network of formal and informal contacts among the agencies, as described earlier. Since there may be legal questions as to multi-agency use of computer databases involving intelligence information, the matter should be checked with agencies’ legal counsel.
Use of Link Network Analyses and Time Flow Analyses in the Management of Investigations
In many complex schemes, such as those involving the use of many shell corporations, hidden ownerships, complex transfer of funds, stock and involved conspiracies, it is very difficult for an investigator or even a team of investigators to keep track of all information received. This problem is especially great when more than one unit or agency is involved in the investigation. There are two techniques for visually representing these schemes which can help in keeping track of the information, Link Network Diagrams and Time Flow Diagrams.
Link Network diagrams can show the association between events, persons, organizations, etc., when there is little concern over the exact sequence in time of the associations. A Time Flow Diagram can be used in cases in which sequences and times are important to understand. As mentioned earlier, these diagrams can be used to communicate to supervisors, prosecutors, judges, and juries. The following examples will illustrate the use of such a diagram.
Link Network Diagram
To develop a link network analysis, all of the raw data needs to be assembled and put in some organized form, such as a report or narrative. The narrative should then be studied carefully and certain central entities, such as persons, organizations, or other objects, should be picked as appearing important for the analysis. Importance is primarily a matter of how many different people, organizations or other entities a given entity has connections with. The more different entities a given entity is associated with, the more important it is.
Next, the diagram itself can be started by taking the most important entity and representing it on a diagram. The other entities are then drawn in. Persons should be represented by circles, with their names enclosed. Organizations can be represented by boxes, possibly enclosing the circles representing members. Entities are then linked by straight solid lines if there is strong evidence of a relationship between or among them, such as meetings, transfer of funds, telephone calls, etc. Dotted lines can be used to represent a hypothesized relationship for which the evidence is less strong. Arrows can be used to represent relationships which flow in one direction, for example, A gave money to B, but not vice versa.
The draft diagram should then be redrawn, avoiding crossed lines and using straight lines. The diagram should then be used to suggest some new lines of investigation to point out weak links in the analysis, and to help communicate the scheme.
Exhibit A below and Figure 3 below illustrate the use of Link Network Analysis, in narrative and diagrammatic form.
EXHIBIT A
CASE EXAMPLE USING LINK NETWORK ANALYSIS
Recently, in a midwestern state, a classic “rip-off” of a county’s welfare assistance program was uncovered. The scheme was conceptually simple; however, the number of people, addresses, and organizations was large; thus requiring a data structure procedure to keep track of the “players.”
The originator of the fraud was a welfare case worker, a lady in this case who we will call (fictitiously), Miss Johnson. She was aware that to disperse a check to a needy client, two basic pieces of data were necessary: her approval and the name and address of the client . The latter was computer checked to assure the welfare agency was not sending more than one check to a recipient.
Miss Johnson persuaded each of 15 of her actual clients to submit four additional claims, making sure that each claim was to a different name and address. She approved each (of the 75) and the computer, after “verifying” each claim, promptly forwarded the checks. Each of the actual clients (let’s call one of them Smith), picked up the fraudulently acquired checks at the addresses given on the claim. After paying a “fee” to the individual at the mail drop, each fictitious person “endorsed” the checks over to the actual client. Smith cashed his validly derived check at a bank. He cashed the others at a credit jewelry store (let’s call the proprietor Ross) for a fee. Ross covered the “fees” as payments on a set of falsely entered debits in his books. He then deposited the checks to his account. When the checks were cleared and returned to the welfare agency, Miss Johnson was informed that all five checks had been paid. She then went out and got her “cut of the action” from Smith.
The investigator and prosecutor soon found it difficult to follow all the details of names, addresses, and cash flow and they assumed that it would be “impossible” for someone hearing the case for the first time to follow it. To facilitate their investigation and presentation, they resorted to a link diagram. Figure 3 is an example, using Smith as the client. Each line on the diagram was supported by documentary or investigative data. The arrows indicate the flow of the checks. In his court presentation the prosecutor used a series of 15 overlays to show the magnitude of Miss Johnson’s criminal conduct.
Time Flow Diagram
When it is easier to conceive the scheme as one sequence of events rather than as an on-going process, Time Flow Diagrams can be used instead of Link Network Diagrams. A Time Flow Diagram (or PERT) is a flow chart which diagrammatically shows the sequence of events in a scheme. The scheme is first analyzed to identify specific occurrences. The Time Flow Diagram should show the whole scheme as a series of events connected by activities. Each event (or milestone) is represented by a circle; n represents one specific time during implementation of the scheme and it generally describes the start or completion of some activity. The arrows or lines between the events are activities; for example, the tasks which must be performed in order that the successive events may occur. Thus, an activity is what must happen over a period of time between events. It is the period of time necessary to move from the predecessor event to the successor event. The Time Flow Diagram is illustrated below:
CASE EXAMPLE USING A TIME FLOW DIAGRAM
On January 15, 1973 the Ace Packing Company, a supplier of meat and poultry to wholesalers and retail markets, found itself short of working capital. John Jones, his father George Jones, and Tom Catlin, the owners of Ace, sought a loan to ease themselves out of difficulties.
One of the salesmen employed by Ace, Larry Evans, arranged a loan for them in the amount of $10,000 at an interest rate of 1% per week. The loan was advanced by the Carson Trading Corporation owned by Eileen Warren.
Ace Packing did not succeed in paying off the loan advanced to it by Carson Trading very quickly. As Ace’s debt increased, Eileen Warren of Carson Trading insisted upon better financial management of Ace Packing. Her specific demand was that Larry Evans be promoted and made an executive of Ace with broad financial power. The owners of Ace, John and George Jones and Tom Catlin, agreed to this arrangement. Larry Evans was made president of the company with authority to sign all company checks on August 3, 1973.
Once Larry Evans assumed the presidency and control of Ace Packing, the company began to change its business practices. Whereas Ace had normally made purchases averaging $100,000 per week, several months after Evans assumed his new role in the company, Ace began making large purchases on credit totaling $1.3 million in one six-week period. Many of these purchases were made in response to the demands of new customers brought in by Larry Evans. Among these new customers were the C. H. Meat Company, the Alton Food Corporation, and Walden Poultry Supply, all wholesalers of meat and poultry and all owned directly by Eileen Warren or by one of her relatives. The increases in merchandise purchases by Ace Packing occurred in November and the first two weeks of December of 1973, during the holiday season in which large orders for meat and poultry are not considered unusual.
Combined with new purchasing practices, Ace Packing began to engage in new payment practices. Instead of paying for credit purchases within a seven-day payment period, Ace began delaying payment to those from whom it made purchases. When suppliers began to express concern about non-payment or delays in payment, Tom Catlin of Ace made personal calls to reassure them that payment would be forthcoming and inducing them to continue forwarding merchandise ordered. In fact, payments were not forthcoming.
Ace’s problems in meeting its purchase obligations resulted from two factors: first, in September 1973 a series of meetings involving George and John Jones, Tom C a t l i n , Eileen Warren and Larry Evans were held at the behest of Larry Evans. At these meetings Eileen Warren agreed to greatly increase the C. W. Meat Company’s purchases of Ace products. In addition, an informal agreement was made by which Ace would bill C. W. Meat for meat and poultry at only 1/2 cent per pound over Ace’s own costs. Thus, because of these agreements, C.W. Meat’s purchases for the month of November constituted 60% of Ace’s sales. The second factor affecting Ace’s ability to pay for its orders from suppliers was the fact that the company did not use the payments it received (though rarely covering costs) from C. W. Meat to pay supplier-creditors. This resulted in a large bank balance for Ace. In the last week of November 1973, Larry Evans began making cash withdrawals from the Ace account. By December 6th, these withdrawals totaled $735,000.
During this same period C.W. Meat Company began modifying the bills it received from Ace so that C. W. Meat was buying meat and poultry for several cents less per pound than Ace was being billed for this merchandise. Both John Jones and Tom Catlin checked these receipts and accepted reductions in payment prices from C. W. Meat.
Ace Packing maintained a corporate bank account at Royal State Bank. When substantially all of Ace’s purchases were going to C.W. Meat, C.W. Meat then made payment by check to Ace almost upon receipt of delivery. In the beginning, Ace deposited these checks at Royal State Bank and, immediately after each deposit, withdrew the funds. Royal State Bank subsequently refused to permit withdrawals until checks had actually cleared. On November 22,1973 at Eileen Warren’s suggestion, Evans and John Jones opened another account for Ace Packing at the National Commercial Bank. Both Warren and C. W. Meat maintained accounts at National Commercial. The account at National Commercial was opened with the understanding between Evans and Jones and bank officials that Ace would be allowed to withdraw funds as soon as the C.W. Meat checks were deposited at National Commercial. As it turned out, the only funds ever deposited in the Ace account at National Commercial were those received from C. W. Meat. Joe Nelson, an agent of C. W. Meat, made all of the deposits to the Ace account.
It was at this same time that Evans began making large cash withdrawals from both Ace accounts. With John Jones, he (Evans), made two large withdrawals from the Royal State Bank. Jones assured bank officials that the money was needed to “pay some trade bills.” Jones co-signed the checks. At National Commercial Bank, Joe Nelson introduced Evans to a bank officer as a customer of C. W. Meat. On most occasions Nelson was met at National Commercial by Evans when he (Nelson) made deposits to the Ace account. Immediately after these deposits were made, Evans (with Nelson still present) withdrew from the Ace account almost the precise amount that Nelson had deposited.
By mid-December 1973 the supplier-creditors of Ace Packing were forced to file an involuntary petition in bankruptcy against Ace to seek settlement of their claims for non-payment. The bankruptcy of Ace appeared to be precipitated by and result from the large withdrawals from Ace accounts made by Evans. The total withdrawals of $735,000 in cash were never found. The State charges that the Ace bankruptcy was a planned and fraudulent one. The flow of these events is presented in the following diagram.
This example is based on the actual case described by DeFranco in Anatomy of a Scam, though shortened and simplified here.
Once a full investigation is underway, an investigator or his supervisor may judge that a decision
has to be made about whether to continue the investigation. A decision to continue can be made by the investigator himself, but should be subject to the approval of his supervisor. In his weekly log, he should indicate the supervisor that this is his judgment, and should also give his reasons. If he has been working with a prosecutor as part of a team, the decision should be made jointly. If the team has been formally designated as one, then the supervisor to whom the team reports should have first say.
If a case is closed, notice of this should be placed in the files or in the computer. However, the investigative file should be turned over by the investigator to the unit’s storage file of investigations, with its location indicated in the relevant file. The investigative information may be needed at some time in the future.48 When cases are closed after court action, the investigative file should similarly be placed in the unit’s storage files. It is generally desirable to write to the complaining witness or referring agency informing them of the outcome of the case.
PERSONNEL SELECTION
White collar crime units have to face problems which are different from those faced by other types of law enforcement and even other types of investigative units. They must deal with more complex legal and investigative issues, more sophisticated criminals, more intricate and extended investigations, and far more in the way of alternative remedies, for example, criminal, civil, regulatory, or mediation. Thus, in addition to the usual procedure for recruiting and selecting personnel, there needs to be considerable attention given to the special requirements of white collar crime investigative units. In this section, these special requirements are discussed, but the usual selection procedures of law enforcement agencies are assumed to be used, such as background checks to ascertain the degree of integrity and the absence of a criminal record; physical examination; evaluations of mental health; and general intelligence. These selection devices should be used not only because of their own importance, but also to enable the unit and its recruits to gain and retain stature in the eyes of other parts of its parent agency, of the public, and of its own personnel. Recruits who meet the normal standards for law enforcement personnel would then view themselves as being full citizens of the parent agency and as being potentially eligible for a higher position in that agency.
Nevertheless, these general selection criteria should be used in conjunction with the special criteria needed to select good investigative candidates. These special criteria for the selection of candidates can be divided into four types: motivation; personal attributes; professional investigative experience; and general knowledge and skill. These are discussed in turn below.
Motivation
White collar crime investigations are often complex, long lasting, and frustrating. To overcome all of the obstacles in his or her way, the investigator needs to be highly motivated with respect to this type of crime. Catching a white collar criminal should be a very important personal goal for the investigator, not just a part of the job. If it is only part of the job and not a personal goal, the investigator will not persist, will run roughshod over details, and will not use his or her imagination to detect new types of schemes. More than in most law enforcement areas, there are excuses and alibis for failure.
The requisite motivation can be generated by the unit itself. It may be so dedicated, its leadership so dynamic, its morale so high that even an originally indifferent investigator may become highly motivated. Daily contact with a group of enthusiastic fellow workers is likely to engender genuine enthusiasm among the new investigators. And such enthusiasm can feed on itself, since it will enhance the chances of successful investigations. Furthermore, as the investigator encounters new types of white collar crimes and victims on the job or in training, his motivation may be increased.
Nevertheless, the level of motivation of the personnel of a unit can be positively affected if new investigators are selected on the basis of their personal motivation to work on white collar crime. Self-starters are more likely to be good investigators in this field. This self-starting motivation can stem from a variety of sources. The individual might have been a victim himself, someone close to him might have been a victim, or he might have been a member of an organization which was victimized, such as a charity. He may have a particular concern for certain types of victims, such as members of minority groups or the elderly. Some patrol officers may have developed particular sensitivity to certain types of victims because they are heavily represented in their patrol area. A person might have worked in a business which was victimized. The extra push that the investigator who is angry from the beginning can provide should be very valuable to an agency.
This personal motivation may frequently lead a person to be particularly concerned with a certain type of crime. Concern for old people could lead to focusing on home repair frauds. Having been a victim of a land fraud can lead to motivation to target in on certain types of suspects. For some units, such delimited goals among investigators may be a great advantage, since the unit may share these goals, and the investigator may make a unique contribution to the unit. However, in other units, such narrow focus may be inappropriate because of the goals of the unit or because the unit needs investigators who can work effectively in a variety of areas. In such instances, a somewhat less “angry” person might sometimes be a better candidate, since he may be more flexible in his goals.
Concern for victims, while a highly desirable attribute, should be balanced by recognition of the need to deal appropriately with offender conduct.
In order to determine whether a person has the requisite motivation, the best way would be to interview the candidate in a relaxed setting in which he would be encouraged to talk about his professional goals and aspirations. The candidate can first be asked about his general professional, long-range goals, without any hint in the question about white collar crime. If he spontaneously talks about his feelings about catching white collar criminals, if he shows some strong feelings about doing so, if he indicates that his personal experience or experiences of people close to him have given rise to this motivation, this should be regarded as a plus factor. Of course, if the particular direction of his motivation, if the type of crime he is most interested in, is also one in which the agency needs more investigators, then the candidate would be even more desirable.
If the candidate does not affirmatively raise the subject of his interest in white collar crime, this should not be a disqualifying factor. A candidate’s response to discussion of white collar crime, initiated by the interviewer, should be closely watched to see if he or she responds with eager interest. Once focused on the subject, the good candidate will usually be able to give some indication of personal awareness of the problem, make some reference to a personally known victim, or refer to some aspect of his or her own background or experience which is particularly relevant.
If the candidate does not show any of these signs of personal motivation in this area, then questions should be raised about his or her qualifications. The open questions, such as those described above, are more useful than those which even subtly indicate the type of answer that the interviewer is seeking by mentioning white collar crime, even indirectly, such as asking why the interviewee is interested in working in the particular agency or unit.
Another related type of question that can be asked in an interview concerns the candidate’s reactions to previously held jobs. The interviewer can have a list of the candidate’s previous jobs and ask the candidate what the candidate liked and didn’t like about each of the jobs. Again, a spontaneous mentioning of anything indicating interest in fighting white collar crime would be a positive sign. Answers to this question could also be very relevant to the personal attributes which are needed in investigators and which are described below.
Personal Attributes
White collar crime investigators should have special qualities of diligence, patience, and persistence. These qualities are essential since white collar crime investigations often take a long time to complete, require a tremendous amount of leg work, and are very slow to culminate in actual arrests. A person with a strong need to get results now would make a poor white collar crime investigator. The person’s degree of diligence would best be determined from a person’s history both professionally and educationally. An individual who has worked at jobs which require unusual persistence in the face of frustration, who has not “grasshoppered” around, should be selected. During the personal interview, the candidate should be asked exactly what his responsibilities were in his previous jobs, how much time he spent on certain types of tasks, what types of work he has found most attractive, and what aspects of his previous jobs he found most interesting.
A second quality is that the person should tend to enjoy and value “head work” in contrast to “muscle” work. He needs to have the ability to think through a problem, to be able to sit at a desk reading reports, documents, records; to spend time talking to people; and to spend time just thinking. This quality might take the form of motivation to match wits with the criminal; finding satisfaction in the use of the mind in trying to catch the criminal. It might take the form of a certain flexibility of mind, a kind of suspicious imagination. He should not need to be close to the action, to ride around and interact with citizens on the street, to pursue and catch street criminals. To be precise, a white collar investigator is not necessarily someone who is more or less intelligent than other law enforcement personnel, but he does need to be someone who is willing and able to sit back and use his mind.
The presence of this quality can be determined in part from the person’s work record and reports of the style of his work in his previous jobs. Candidates who have worked in military intelligence, for example, might be specially qualified. Also those who have sought to continue their education are highly likely to have the required qualities. Psychological tests might prove very valuable, but should be selected and administered by psychological test experts, including those in the parent agency’s personnel department. As mentioned in the section on motivation of candidates, above, they should be asked to indicate their professional goals. Not only will the content and manner of answering this question indicate something about these goals, but will also indicate how much value the candidate places on the needed type of “head work.”
A third quality which is in part an outgrowth of the one previously cited is the ability to do detailed paperwork, to search through documents and records for small bits of information, to put bits and pieces of information from separate sources together, to look for information which might be in obscure places, to remember details almost automatically, and keep complete and accurate records of detailed information. This ability might be determined from a person’s work record, or by the use of tests of clerical ability.
A fourth quality useful for investigators is the ability to communicate with and size up a wide range of people under a wide range of circumstances. The investigator should be one who can deal easily with many different kinds of people, from businessmen and professional people in their own offices, to ghetto residents, to smooth-talking con men, to elderly crime victims. Although some investigators might specialize in dealing with one or more of these types of people, The investigator still needs to be someone who is not easily hoodwinked by them, but at all times has the social adeptness to be able to relate to them in an inoffensive way. He should be someone who can walk into a corporate vice-president’s office and meet people there eye-to-eye and not blink. Some of these abilities can be learned, as will be indicated in the section on training, but it is obvious that an investigator who comes by these qualities naturally should be more effective in the long run.
Because of the need for investigators with a variety of backgrounds, white collar crime units have the most practical of reasons to be “equal” opportunity employers. Recruiting qualified candidates from among groups often reflected in the victim populations, e.g., women, blacks, Asian-Americans, Hispanics, Native Americans, as investigators, will make it easier to communicate and work with these groups in white collar crime enforcement efforts and to relate to groups of victims who might otherwise be overlooked.
Background Contacts
As we indicate above, it is important that. an investigative agency maintain personal contacts with a range of governmental and private agencies. The formal contact may not be enough to maintain proper communications among the agencies. One way of establishing such personal contacts is simply to recruit people who have worked in or with other agencies. For example, a person who has worked in a military intelligence unit, or the FBI, SEC, or Postal Inspection Service, might be of great value to a local law enforcement agency. A person who has worked in a Better Business Bureau, or a Call-for-Action might have special leads or contacts. A person who has worked in a particularly vulnerable industry like real estate or nursing homes might also be quite useful. Sometimes street detectives who have worked a commercial or similar area might have close contacts with local businessmen, bankers, etc. Such contacts are difficult to build up after the person has started working in an agency, so that recruiting people with such contacts would be very valuable to a unit. People who have retired from these organizations while still having many working years left might be especially desirable candidates.
Knowledge and Skill
The special needs and resources of a white collar crime investigative unit suggest some of the requirements of knowledge and skill among its personnel. Some units may be mandated by law to cover only a narrow range of white collar crimes, such as securities fraud. Such specialized units need personnel with appropriately focused capabilities.
Other units need to have a range or variety of investigative capabilities because of their more general legal jurisdiction over a broad range of white collar crimes. Such generalist units should be not be hampered by an intractable narrow focusing of their capabilities; unit personnel, either collectively or individually, need to have the knowledge and skill to deal with diverse types of white collar crime.
Both generalist and specialist units need to develop appropriate skills and knowledge among their personnel and can do so in any of the following ways. First, personnel can be selected because of their ability to acquire new knowledge and learn about new businesses; for example, a specialist unit may train its recruits in the area in which they focus. Second, personnel can be sent to training situations to develop this diversity; for example, a generalist agency can select its personnel because they each have knowledge of a variety of business crimes. In this case, each investigator is a wide-ranging specialist. Third, each person recruited can be selected because of a particular special knowledge of a certain industry, business, victim population, white collar crime area, etc.; a generalist unit can accordingly be made up of specialist investigators.
In many, if not most instances, a person should be selected primarily for his personal attributes, motivations, and the ability to acquire new knowledge rather than primarily for the knowledge of a particular business. If the candidate is a good investigator type, this knowledge can be gained later. However, if knowledgeable candidates already have these personal attributes and abilities, so much the better.
Recruitment of Specialist Investigators
The type of skill and knowledge to be recruited for specialist units is dictated by the explicit goals of the agency. Their areas of specialization can be real estate fraud, consumer fraud, investment fraud, tax fraud, automobile repair fraud, home repair fraud, welfare fraud, medical fraud, etc.
Other units may specialize in certain victim target populations, such as the elderly and minority groups. In the latter case they need to know the typical patterns of victimization and special needs of such groups.
Generalist units have, however, a number of issues to consider when they seek to hire specialist investigators. The decisions as to which subject matter areas merit special emphasis should be made partly on the basis of current areas of complaints and referrals, but also on the basis of long-range planning, that is, anticipation that there might be considerable white collar crime in an area in which only minimal complaints or other reports have yet been received. If the unit has a pro-active philosophy, it might recruit personnel to start looking into such areas. For example, with the increase in the proportion of the population which is retired can come an increase in crimes against the elderly, such as nursing home frauds, retirement land frauds, medical frauds, etc. A unit would need to be ready for these trends even before the criminals start operating in the field, and would therefore start recruiting personnel who have the relevant expertise. These might be medical administrators or real estate regulatory agency personnel, for example.
There is, however, a great danger in recruiting all of the personnel of a generalist unit in this way, because of the very fact mentioned earlier, namely, that white collar crimes continually appear in new variations. Thus, an office needs to have at least some people who are “born generalists,” who have the bent of mind to move into new areas. If an agency has this capacity, it will not be caught flatfooted by a sudden increase in a type of white collar crime for which it has not been able to prepare by the recruitment of specialized personnel, as suggested above.
It will be helpful to examine the backgrounds of personnel already part of the parent organization who can be transferred to the investigative unit. Many police officers, for example, have side interests or interests previous to becoming officers which may not be apparent in the usual personnel records. Many will have had business experience, or will have gained a relevant formal education. Police departments have had investigators with building contractor licenses, real estate brokerage licenses, licenses as public accountants, years of experience as auto mechanics, to mention only a few such backgrounds. Some even continue to be active in their fields on a moonlighting basis after they start working in the investigative agencies. Some have gained an education in certain areas, such as an undergraduate degree in Marketing, or a Master’s degree in Business Administration.
There are substantial advantages to recruitment of personnel from within the parent agency. Such personnel can more readily be accepted in the investigative unit; may have personal contacts within the organization and knowledge of it which can be very valuable later. The recruitment process is made much cheaper, since background information has already been accumulated, and evaluation of present performance can be readily obtained. The recruits may have other skills which are useful to the investigative unit. There are, however, some disadvantages: the unit in the parent agency which loses the person may be hurt; the transferred personnel may bring some investigative approaches to the unit which are undesirable, such as proneness to make arrests early in the investigative process, to be careless about paperwork, or to be overly blunt in dealing with people. However, a sufficient concern for the necessary personal attributes as described above should compensate for this disadvantage.
When recruiting from outside the agency, certain types of expertise should be among the required qualifications for the position. In some cases, experience in a specific industry, with a given victim-prone population, such as a minority group, or with a given investigative technique, such as accounting, may be made explicit. Notice of the recruitment might be sent to specialized agencies, such as consumer protection agencies or those working with securities, banking, or housing frauds. Some personnel may have worked in other law enforcement agencies which have special responsibilities, such as the FDA, bunco squads, forgery squads, or other police departments.
One potential problem which could be particularly troublesome in a white collar unit is “moonlighting,” because it can create conflicts with respect to the use of time and conflicts of interest. Therefore, in recruiting care should be taken to ensure that potential recruits are not misled on this point.
A Unit Consisting of Generalists
Smaller units, particularly those in less populous jurisdictions, will need to recruit personnel who can investigate a variety of different types of white collar crime.
Such generalist investigators would have many of the personal traits cited above for investigators, but their motivation to catch white-collar criminals, although very high, would not be as narrowly focused as in the case of some specialist investigators. Furthermore, they need to be quick learners who can master new areas of business and of crime rapidly. On occasion, of course, even the specialist investigators need to shift to new areas, but even in large agencies consisting of specialists a few generalists would be valuable to respond to new types of crimes.
The recruiter should therefore most diligently seek to determine the candidate’s aptitude for quickly acquiring new information and for its conceptualization; this determination can be based on a number of factors, including but not limited to the candidate’s learning record in school and by other tests administered by the parent agency personnel division.
Generalists can be recruited in the same fashion as the specialists, but it is more likely that they will be older and that they will have worked in a variety of investigative agencies, probably in federal or state government. People who have had a career of investigations in a variety of governmental agencies and retired military intelligence or criminal investigative personnel are likely to provide good recruits. Persons retired from other branches of the military are less likely than these groups to be promising candidates. A unit would be likely to find good general investigative skills from among police personnel, homicide, arson and organized crime investigators. Effective investigative journalists often have some of the same skills as good general investigators. Another source would be people with advanced and broad business education, for example, with Master in Business Administration degrees. The unit should be cautious about recruiting people who have had a variety of direct business experience because they may have failed at each enterprise or because they may tend to be restless.
A Unit Consisting of Learners
Units seeking generalists should seek people who can learn quickly, as mentioned above. However, units seeking specialists can also recruit effective learners, since they can acquire knowledge in the same area of agency jurisdiction and also rapidly acquire general investigative skills. Thus, people with a college background or similar adult educational achievement could be recruited not so much for their knowledge, but because of their demonstrated ability to learn. People who have fared well in other educational programs could also be recruited. Certain types of intelligence tests, those designed for adults like the Bellevue-Wechsler Adult Intelligence Scale, could be used to screen recruits.The advice of an agency psychologist should be obtained before selecting the particular tests to be used.
In many instances an educational background which does not have any direct and obvious relevance to white collar crime might in the lOng run turn out to be quite valuable to the unit. A background in economics, psychology, sociology, etc., could be helpful in dealing with certain types of crime and setting up the planning and evaluation units within the agencies. Training in these areas would be very valuable in setting up and running such units.
Unit Training
All the types of personnel just described could benefit from training, even the specialists mentioned above could benefit from additional training, even if they continue to work in the same area as their specialities. Added training is highly likely to open up new possible approaches to their own areas of specialization.
Summary
How much each agency depends on recruitment and how much on training to develop the range of skills needed will obviously depend on the local situation, resources available, etc. However, a blend of all of the approaches described above is probably best in most cases. Such a blend would tend to maximize the range of skills and knowledge available in the agency, thus enabling it to better cope with the numerous varieties of white collar crime.
STUDENT CASE STUDY TWO – HEALTH CARE FRAUD
Assignments
- Review the following case study from the FBI website. Create a summary statement analyzing the impact of 240 individuals stealing $712 Billion by fraud.
- What special skills would an investigator need to investigate this type of crime?
Overview
Health care fraud costs the United States tens of billions of dollars each year. Some estimates put the figure close to $100 billion a year. It is a rising threat, with national health care expenditures estimated to exceed $3 trillion in 2014. Health care fraud schemes continue to grow in complexity and seriousness. The dedicated efforts of law enforcement are a major component of the fight against health care fraud.
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) established a national Health Care Fraud and Abuse Control Program (HCFAC or the Program) under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services (HHS), designed to coordinate Federal, state and local law enforcement activities with respect to health care fraud and abuse. In its seventeenth year of operation, the Program’s continued success confirms the soundness of a collaborative approach to identify and prosecute the most egregious instances of health care fraud, to prevent future fraud and abuse, and to protect program beneficiaries.
FBI PRESS RELEASE
More than 240 individuals-including doctors, nurses, and other licensed professionals-were arrested this week for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings.
The arrests, which began Tuesday, were part of a coordinated operation in 17 cities by Medicare Fraud Strike Force teams, which include personnel from the FBI, the Department of Health and Human Services (HHS), the Department of Justice (DOJ), and local law enforcement. The Strike Force’s mission is to combat health care fraud, waste, and abuse.
At a press conference today at DOJ Headquarters in Washington, DC, officials said the arrests constituted the largest-ever health care fraud takedown in terms of both loss amount and arrests.
“These are extraordinary figures,” said Attorney General Loretta Lynch. “They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered.”
The charges are based on a variety of alleged fraud schemes involving medical treatments and services. According to court documents, the schemes included submitting claims to Medicare for treatments that were medically unnecessary and often not provided. In many of the cases, Medicare beneficiaries and other co-conspirators were allegedly paid cash kickbacks for supplying beneficiary information so providers could submit fraudulent bills to Medicare. Forty-four of the defendants were charged in schemes related to Medicare Part D, the prescription drug benefit program, which is the fastest growing component of Medicare and a growing target for criminals.
“There is a lot of money there, so there are a lot of criminals,” said FBI Director James B. Comey. He described how investigations leveraged technology to collect and analyze data, and rapid response teams to surge where the data showed the schemes were operating. “In these cases, we followed the money and found criminals who were attracted to doctors offices, clinics, hospitals, and nursing homes in search of what they viewed as an ATM.”
Since their inception in 2007, Strike Force teams in the nine cites where they operate have charged more than 2,300 defendants who collectively falsely billed Medicare more than $7 billion. Today’s announcement marked the first time that districts outside Strike Force locations have participated in a national takedown; those districts accounted for 82 of the arrests this week.
Here’s a look at some of the cases:
- In Miami, 73 were charged in schemes involving about $263 million in false billings for pharmacy, home health care, and mental health services.
- In Houston and McAllen, 22 were charged in cases involving more than $38 million. In one case, the defendant coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and then received payment for those who qualified. The defendant was paid more than $4 million in fraudulent claims.
- In New Orleans, 11 people were charged in connection with home health care and psychotherapy schemes. In one case, four defendants from two companies sent talking glucose monitors across the country to Medicare beneficiaries regardless of whether they were needed or requested. The companies billed Medicare $38 million and were paid $22 million.
“We will not stop here,” said HHS Secretary Sylvia Mathews Burwell. “We will work tirelessly to prevent these programs from becoming targets and fight fraud wherever we find it.”
More than 900 law enforcement officials participated in the three-day sweep. Those arrested include 46 licensed medical professionals, including 19 doctors. Since 2007, the Medicare Fraud Strike Force has prosecuted more than 200 doctors and more than 400 medical professionals.
In fiscal year 2014, DOJ and HHS health care fraud and prevention efforts recovered nearly $3.3 billion. Over the past five years, DOJ specifically has recovered more than $15 billion in cases involving health care fraud. The average prison sentence in Strike Force cases in fiscal year 2014 was more than four years, though some prosecutions in recent years resulted have in sentences of 50 years.
