Demystifying financial fraud: forensic accountants gain in popularity: stop white-collar crime in its tracks.

• Author: Coppola, Doreen R.

According to Merriam-Webster's Dictionary of Law, "white-collar crime" is defined as a crime that is committed by salaried professional workers or persons in business that usually involve a form of financial theft or fraud. These types of crimes tend to be made up of complex, sophisticated and relatively technical actions, and examples include bankruptcy fraud, bribery, insider trading, embezzlement, computer crime and forgery.

One of the ways the Federal Bureau of Investigation and the Internal Revenue Service have kept abreast of these crimes is by training some of their special agents as accountants and by actively recruiting individuals who have banking or accounting experience behind them. These specialized employees, known as forensic accountants, are now a growing trade and are popping up all over in the world of accounting. In fact, Alaska is home to forensic accountants who are reputed for having handled some of the state's most intricate, complex cases.

One such forensic accountant is Debra Mason of Thomas Head & Greisen (Anchorage), who is often hired by firms who suspect internal fraud involving one of their employees. According to Mason, there are many ways a firm comes to this suspicion. One of the most common ways is when an employee "tips off" the employer about another employee. Another way is when an employee leaves for a new job and is caught stealing from the new company and the employer contacts the former employer about it; after investigating past financial records, the company often learns that the former employee was stealing from them as well. But, there's more to fraud investigations than solving the mystery of "whodunit;" many times, Mason is hired for analysis and documentation purposes when a firm already knows who to point the finger at. "Sometimes we're hired to help figure out how much might be missing and possibly document it," she says.

Mason has worked with a variety of fraud cases, and yet found that the most common internal fraud cases involve expense reimbursements. In some of these cases, employees are getting away with receiving a reimbursement check for a non-business-related expense, while others are legitimately getting reimbursed, but more than one time. She recalls a case where an employee was writing out legitimate business checks to pay off legitimate loans, but was not including information on the check explaining which loan it was for. This lack of information eventually became suspicious...