payments made to the shell company. The fraud loss is the total amount of payments made to the shell company. In his response Steve implies that he has not perpetrated a fictitious-vendor scheme but instead is involved in a pass-through scheme--the less serious of the two offenses.
Joe: “I didn’t say there was. Did you approve payment of $9,400 to Construction Supply Company for this invoice.” (Hands Steve an invoice but Steve puts it on the table, face down) Steve: “Yes, but that’s the only one. I closed that company down two years ago.” Analysis: Steve is more likely to admit to the fraudulent invoices one at a time rather than being confronted with them all at once. Also, when admitting to fraudulent activity, it is very common for perpetrators to minimize--and lie about--the magnitude of what they have done. Nonverbal cues: Steve does not want to look at the incriminating invoice so he puts it face down on the table. An honest person would want to look at the invoice in question for pertinent information which might exonerate him or her.
Joe: “What service or product did you provide for the $9,400 you received?” Steve: (Looks down at the floor.) “Nothing.” Analysis: Joe wants to know whether the scheme is the fictitious or pass-through variety. Steve just admitted to the fictitious vendor scheme. Had Steve not admitted to the fictitious vendor variety, Joe could have reviewed the canceled checks written from the Construction Supply Company checking account. If a pass-through scheme was being perpetrated, checks made out to vendors who supplied the actual materials and labor invoiced to the employer would be included in the canceled checks. The absence of such checks would indicate that nothing was provided for the payments received.
Joe: “How many invoices did you submit from Specialist Supply?” Steve: “Three or four.” Joe: “Tell me about this invoice to Central Sugar for $40,500.” (Hands Steve an invoice but Steve puts it on the table, face down) Steve: “Specialist Supply provided materials and labor for a project involving Central Sugar.” Joe: “How much was the actual cost of materials and labor?” Steve: “About $500 for materials and $500 for labor.” Interviewing as a ‘Forensic-Type’ Procedure