Fraud And Misconduct Investigation Services


  • Risk assessment fraud and misconduct
  • Designing mechanisms for fraud risk management based on international best practices and international norms.
  • Our Corporate Investigations practice allows organizations/companies to provide systematic and realistic solutions for fraud risk management in matters of corporate fraud claims, including kickbacks or financial mismanagement.
  • Compliance tests for fraud risk management and prevention related.
  • Customized instruction for corporate leaders in fraud risk management seminars and fraud prevention.

Investigation Service

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Financial fraud occurs when, by lying, deceit, or other fraudulent practices, someone takes away your money or otherwise harms your financial health. This can be done through a lot of different methods like identity theft or investment fraud.

Most victim compensation programs do not cover the money lost to fraud or fraudulent schemes. If you want to get your money back, you must check for your specific state laws regarding victim compensation. Justice from law might be the only legal option to recover lost money.

There were many scandals in the early 1990s that shook the Indian ecosystem, such as the Harshad Mehta Securities scandal. The Satyam Scandal, in addition to this, introduced the value of corporate enforcement standards to businesses. It can be noted, however, that the Companies Act, 2013 was brought out to deal with problems such as this.

Companies must also place emphasis on specific procedures relating to the investigation of fraud and misconduct. To define and determine the amount of risk present in a specific organization or company, there must be a system in place.

It is important to report the crimes to the relevant agencies and law enforcement as soon as you can irrespective of the type of financial fraud. Fraudulent charges should also be disputed or canceled as soon as they are discovered as well.
Moreover, victims should collect relevant documents, such as bank statements, credit reports, tax forms from current and previous years, and continue to file important information throughout the reporting process.

  • Identity Theft:  When someone steals your personal financial information, such as credit card number or bank account number, to make withdrawals under your name is called Identity Theft. Sometimes people will use the information to open credit or bank accounts and leave the victim accountable for all the changes that occurred by the thief. Identity theft can result in damaged credit scores, bounced checks/denied payments, and collection agencies being pursued.

  • Investment Fraud: Selling of investments or securities with false, misleading information, etc. is included in this type of fraud. It could be false promises, hiding facts, and insider trading tips.

  • Mortgage and Lending Fraud: A third-party may open a mortgage or loan using your information or using false information. In another case, lenders may sell mortgages or loans with false information, deceptive practices, and other high-pressure sales tactics.

  • Mass Marketing Fraud: This type of fraud is conducted through mass mailings, telephone calls, or spam emails. It also includes fake checks, charities, lotteries, honor society invitations, and more. These marketing tactics are used to steal personal financial information or to raise contributions to fraudulent organizations.

We have talked about financial Fraud as a whole, but now we are going to talk about corporate and business frauds.

Corporate fraud consists of activities done by an individual or company that are done misleadingly or illegally, and are designed to give an advantage to the committing individual or company.
Corporate fraud schemes go beyond the scope of an employee’s stated position and are marked by their complication and economic impact on the business, other employees, and outside parties.
Now we are going to talk about the regulatory legislation that comes into play in case of business and financial frauds.

  • Indian Contract Act 1872.
  • Indian Penal Code 1860.
  • Prevention of Corruption Act 2013.
  • Prevention of Money-laundering Act 2012.
  • The Companies Act 1956& 2013.
  • Information Technology Act 2008.
  • Prohibition of Insider Trading.

There are many types of corporate fraud, including the following frauds that are very common:

  • Cash, physical property, or sensitive information theft
  • Misuse of accounts
  • Procurement fraud
  • Payroll fraud
  • Financial accounting misstatements
  • Inappropriate journal vouchers
  • Suspense accounting fraud
  • Fraudulent expense claims
  • False employment credentials
  • Bribery and corruption.

HR managers are being called upon to conduct in-house investigations increasingly these days. The question of whether to bring in law enforcement, a regulatory agency, external audit teams, a private law firm, or handle the matter in-house is one that you must find the answer to. This decision is fact-specific and case-specific and will rely on the length and nature of the potential issue, as well as on the potential in-house investigative skills.

Many times the in-house investigations are conducted with outside counsel. If the company decides that it will conduct an internal investigation instead of an external Investigation at the start, the roles of the individuals involved in the investigation should be clearly described. If the investigation is conducted in-house under the supervision of an HR manager, you may get the following benefits:

  • Heightened knowledge about the company’s business, employees, and procedures;
  • Increased control over the investigation as well as the possible resulting publicity.
  • An unfiltered view of the fraud and the extent of it. Keeping the investigation in-house may help you prevent possible problems with the Fair Credit Reporting Act (FCRA). The FCRA applies generally to workplace investigations but does not apply when the investigation is done completely in-house. On the other hand, the disadvantages of keeping the investigation in-house may be the following
  • Lack of attorney-client privilege.
  • Insufficient training In carrying out fraud investigations.
  • Less objectivity than an external investigation.
  • Possible conflicts between the company’s well-being and management’s professional obligations.
  • Possible loyalty issues between the investigator and the employees and lack of support, although some of the disadvantages are not damaging to the company generally, the existence of such factors when conducting an in-house investigation, may create a problem for you.

By seeking the help of an experienced anti-fraud expert who has investigated hundreds of frauds, one of the best ways to establish policies and procedures that can help you avoid corporate fraud is to develop the most applicable and successful anti-fraud measures, including:

  • Create clear and easy to understand standards from the top down. Have an employee manual that clearly outlines these standards and keeps the rules from becoming arbitrary.
  • Often verify references and conduct background checks on all new employees, including jobs, credit, licensing, and criminal records.
  • At all stages, including monitoring and using pre-numbered checks, safe physical properties, access to data, and cash, keep checks locked, have a “voided check” procedure, and never sign blank checks. Regularly check all payments.
  • Division of duties of employees. Divide activities so one employee doesn’t have too much control over an area or duty. Separate important accounting and account payable functions. Small-business owners and managers should review every payroll check personally. There should never be a check signing authority for the person who has custody of the checks. The person who opens the mail does not record the receivables and the accounts should be reconciled.
  • Proper authorization of transactions, ensuring that employees aren’t exceeding their authority.
  • Independent checks on performance, using audits, surprise check-ups, inventory counts, or other procedures to verify compliance with policies and procedures, as well as accuracy.
  • Implant an anonymous reporting mechanism, such as an employee fraud hotline.
  • Small-business owners should monitor who gets bank statements and other sensitive documents first. Consider a separate post office box to receive bank statements, customer receipts, or any other sensitive documents.
  • All account reconciliations and general ledger balances should have an independent review by a person outside the responsibility area such as an outside accountant. This allows for reviews, better-ensuring nothing is amiss, and providing a disincentive for fraudulent activities.
  • Conduct annual audits to motivate all bookkeeping- related staff to keep things honest because they can never be sure what questions an auditor is going to ask or what documents an auditor may request to review.
  • While no company, even with the strongest internal controls, is completely protected from fraud, making the internal control policies stronger, processes and procedures will go a long way towards making your company a less attractive target to both internal and external criminals.

One of the most reputed company announced in September that it had installed software on millions of cars to trick the Environmental Protection Agency’s emissions testers into thinking that the cars were more environmentally friendly than they were, investors deserted the company, as they should have.

The company lost approximately $20 billion in market capitalization, as investors worried about the cost of providing compensations to customers for selling those cars that weren’t compliant with environmental regulations.

The company not only had to deal with providing compensations to their customers, but it will also have to pay fines from regulators as well as a big reputational hit that it took because of this scandal, which severely affected its market share.

Another Example of a Corporate Scandal is one of the biggest Ponzi schemes in West Bengal that enjoyed political patronage and attracted millions of investors and made them deposit money with the promise of abnormally high returns including fancy holidays etc. The chit fund eventually collapsed leading to defaults after a crackdown by SEBI and the Reserve Bank of India. The default, apart from leaving small depositors high and dry, also led to 10 media outlets owned by the company being forced to wind up, leaving 1000 journalists jobless.

And the company was accused of running a Ponzi scheme by an online market survey firm that raised thousands of crores of rupees from over 24 lakh investors, asking them to fill out surveys and ensuring that their income quadrupled in a year. A criminal case was registered against the company in 2011, some accounts frozen, and it’s business shut down.

Section 447 of Companies Act 2013, prescribes that the person who is guilty of frauds or scandals will be punishable with imprisonment for a term not less than 6 months and up to 10 years and a fine, which will not be less than the amount involved in the fraud and is extendable to thrice of such amount.

If the fraud involves public interest, the minimum imprisonment that can be provided will be 3 years.

As per the Prevention of Money-laundering Act 2012, if any person is sentenced to have broken this rule, they may get punishment of imprisonment up to 3-7 years with a fine of up to 5 lakh rupees.

As per Indian Penal Code 1860, the punishment of offenses, every person shall be accountable to punishment under this Code and not otherwise for every act or omission contrary to the requirements thereof, of which he/she must be guilty within India.

As per Section 66F (Acts of cyber terrorism) of Information Technology Act 2002, If a person refuses to give access to authorized personnel to a computer resource, accesses a protected system, or introduces viruses or malware into a system, intending to threaten the unity, integrity, sovereignty or security of India, then he commits cyber terrorism and he is accountable for Imprisonment up to life.

The corporate world is witnessing various changes. The corporate world’s networks are being targeted by cybercriminals more and more these days. Each new day comes up with some news about breaches on corporate networks at global and Indian levels. For running the day-to-day affairs of corporates, the electronic format is considered by some, the defective format.
Corporates must be aware of the facts that the law has gone ahead and given a broad definition of personal information to mean any information that relates to a natural person, which, either directly or indirectly, in combination with other information available or likely to be available with a body corporate, is capable of identifying such person. Moreover, the law has also defined what are the constituents of sensitive personal data or information. Some of these are –

  • Password
  • Financial information like Bank account or credit card or debit card or other payment instrument details
  • Physical, physiological, and mental health condition
  • Sexual orientation
  • Medical records and history
  • Biometric information
  • Any detail that is related to the above clauses as provided to body corporate for providing service.
  • Any of the information received under the above clauses by body corporate for processing, stored, or processed under lawful contract or otherwise.
  • In-depth exposure to flexible forensic operations, from seemingly innocuous to intricate investigations.
  • Flexible action, taking into account the urgency of the situation.
  • Our team of former CBI officers and intelligence specialists, chartered accountants, lawyers, certified fraud examiners, field experts, history intelligence experts, and management graduates are part of the functional diversity of our staff.
  • Cross-functional tools deployment.
  • Synergies of global member firms.
  • Customized services to resolve your specific business issues.

Investigation Service

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