Investigating White-Collar Crime: Embezzlement and Financial Fraud. - book reviews

FBI Law Enforcement Bulletin,The, Nov, 1997 by Arthur L. Bowker

Investigating White-Collar Crime: Embezzlement and Financial Fraud by Howard E. Williams, published by Charles C. Thomas, Springfield, Illinois, 1997.

A book's success as a tool in embezzlement and fraud investigation depends on a variety of factors. Does the text provide readers with a basic theoretical understanding of white-collar crime? Does it adequately cover general accounting and auditing principles? More important, does the book promote sound techniques and provide insight into the investigative process required to meet the legal requirements for successfully prosecuting white-collar offenders?

Investigating White-Collar Crime: Embezzlement and Financial Fraud meets all of these requirements. The author, a 17-year veteran with the Austin, Texas, Police Department, presents information in an easy-to-follow manner on a subject of increasing importance to law enforcement as agencies devote more resources to investigating white-collar crimes.

Chapters on accounting and auditing theory describe the "nuts and bolts" of these topics without overloading readers with needless technical jargon. The author specifically addresses three auditing techniques--ratio analysis, horizontal analysis, and vertical analysis--that investigators can use to systemically analyze financial statements for investigative leads. After describing the techniques, the author then carefully highlights the differences between them and discusses their respective strengths and weaknesses for uncovering specific types of offenses.

Chapters on interviewing and interrogation address key points in the investigative process, such as planning and collecting preliminary financial data. Noting that few white-collar offenders willingly confess because of the perceived consequences of acknowledging their guilt, the author suggests several useful strategies--such as permitting offenders to rationalize their illegal behavior and blame it on substance abuse or financial hardship--to help obtain confessions.

A chapter focusing on illicit transactions covers various methods that white-collar offenders use to commit their crimes, ranging from relatively simple over-billing schemes to creating ghost employees. Within this discussion, the author also addresses the specific differences between "on book" and "off book" schemes and provides the basic investigative steps required to detect and document illicit transactions for prosecution.

Recognizing the paper-intensive nature of most white-collar investigations, the author devotes two chapters to issues relating to subpoenas, search warrants, evidence collection, and documentation. These chapters include useful sample attachments investigators can refer to when using subpoenas and search warrants to obtain financial evidence. There is an excellent discussion of admissibility rules (hearsay, relevancy, competency, etc.) and the exception to the hearsay rule for business records.

The chapter on investigative reports and case preparation provides a strong foundation for investigators who are untrained in documenting white-collar crimes. The book closes with a glossary that defines financial and legal terms with which white-collar investigators at all experience levels should be familiar.

Investigating White-Collar Crime discusses inherently complex material in a detailed, yet highly readable, way. It should prove a valuable resource both for experienced investigators, who will find the book a good refresher for previously acquired skills, and for novices, who will find it an excellent tool when preparing for their first white-collar crime case.

Reviewed by Arthur L. Bowker U.S. Probation Officer U.S. District Court Northern District of Ohio Cleveland, Ohio