September 14, 2020

Partner Neil M. Barofsky was featured on an episode of Fraud Eats Strategy, a podcast hosted by FTI Consulting’s Scott Moritz. Titled, “Fraud Has No Place to Hide (in a Down Economy),” this episode examines the increase in financial crime that occurs when the economy is in a downturn and offers tips for organizations on how best to use fraud risk assessments to identify fraud and arm their company against the negative consequences of misconduct. Mr. Barofsky discusses how the discovery of fraud by the government is different, and easier, during a recession. He also touches on what companies can do to find historical or ongoing fraud and what they should do if they find it. Mr. Barofsky advises companies to harness big data and repurpose it for compliance monitoring by looking for anomalies or areas of potential fraud, and he also urges them to resist the temptation to make cuts in the compliance department during economic downturn, and instead double down on existing controls and procedures. He notes that it is always important to be diligent about fraud monitoring, but particularly during a recession where there is added incentive for misconduct. If the government learns of misconduct that the company was unable to detect, the company is much better off if they are able to show the government that they were maintaining a level of vigilance, surveillance, and monitoring, even when times were tough, according to Mr. Barofsky.

To listen to the full podcast, please click here