Identity Theft Prosecution: Three Ways a Forensic Accountant Can Help

Alex Helfand, ENCE, Computer Forensic Specialist

Identity theft and related identity fraud is a widespread problem due to today’s modern digital environment, which has armed thieves with new ways to silently steal large amounts of personal data from anywhere in the world.  Credit card fraud, identity theft and online embezzlement scams are increasingly in the news, and we frequently hear about personal information being stolen due to credit card skimming, and websites and other company data being hacked.

One particular scandal that comes to mind is the 2007 consumer data breach of T.J. Maxx and Marshalls, in which hackers stole data from at least 45.7 million credit and debit cards of consumers.  A more recent example is the 2011 Sony PlayStation incident, in which the company suffered a massive breach in its video game online network that led to the theft of millions of consumers’ names, addresses and credit card data, and was considered one of the largest thefts of identity information on record.

According to a 2013 Identify Fraud Report released by financial services research and advisory firm Javelin Strategy & Research,  in 2012 identity fraud incidents increased by more than one million victims, with fraudsters stealing more than $21 billion.  The study also revealed that 12.6 million people were victims of identity theft in the United States in the past year, which corresponds to one victim every three seconds.

Given these alarming statistics, if identity theft or fraud is remotely suspected, it is wise to consult with a forensic accountant who is a Certified Fraud Examiner (CFE) and can help determine whether a theft has occurred, who committed it, the amount of losses, and the data needed to assist in presentation to attorneys, insurance companies, prosecutors and a judge or jury.

Following are three ways that forensic accountants help legal counsel in an identity theft case:

  1. Investigate.  Forensic accountants apply both investigative skills and specialized legal knowledge when assisting in identity theft and fraud cases.  They focus on tracking financial transactions and building paths that can be used to trace where the fraud originated.
  2. Collect Evidence.  Forensic accountants analyze the identity theft information they’ve uncovered and formulate solid evidence to help prosecutors build their case.
  3. Litigation Support.  Forensic accountants have a deep understanding of how financial and business factors relate to specific legal issues.  They can assist attorneys in both civil and criminal disputes, trying to get the situation resolved before it reaches the courtroom.  If the matter does go to court, a forensic accountant may also testify as an expert witness, hear testimony of an opposing witness and assist with formulating questions for cross-examination.

With identity theft among the fastest growing crimes in the United States, it has become increasingly essential to work with an experienced forensic accountant and Certified Fraud Examiner even before a situation arises.  In addition to detecting and helping legal counsel pursue fraud, a forensic accountant can advise on specific proactive steps to take in order to prevent identity theft and minimize risks.

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