Author: Jonathan T. Marks, CPA, CFF, CFE

Board Advisor - Fraud, Ethics, Governance, Global Risk Management, Compliance, Internal Audit, & Anti-Corruption Strategist. Jonathan has 30 years of experience working closely with his clients, their board of directors, audit committees, senior management, internal audit, & law firm on fraud, misconduct, cyber (data breach) & global bribery/corruption (FCPA, UKBA) matters & when appropriate conducting an investigation (10A, cross-border, etc.), performing root cause analysis, developing remedial procedures, & designing or enhancing governance, global risk management, & compliance systems along with internal controls & policies & procedures to mitigate future potential issues. Marks has deep expertise in accounting (GAAP), auditing (GAAS/PCAOB) and SEC matters. He has worked with companies, their auditors, management, & regulators on highly-technical issues. He is also skilled at financial, operational, & regulatory compliance due diligence for mergers, acquisitions, joint ventures, transactions, & third party intermediaries or service providers. Mr. Marks has educated & advised some of the world’s largest companies in these & other areas, which include complex accounting, disclosure, internal control, fraud risk management, operational, & regulatory compliance, SEC reporting, registrations, & compliance with the Securities Act of 1933, the Exchange Act of 1934, the False Claims Act (FCA) the Racketeer Influenced & Corrupt Organizations Act (RICO), the Foreign Corrupt Practices Act (FCPA), the Sarbanes-Oxley Act (SOx), Dodd-Frank Wall Street Reform Act, and the United Kingdom’s Bribery Act (UKBA). Jonathan is a highly-regarded speaker, author, & thought leader in the GRC & fraud space. The views I express are mine and not that of any organization I am affiliated. I attempt to give attribution when appropriate. This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, tax, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference the contents of this Blog for any lawful purpose, provided attribution is made to the author.

Fraud, Compliance & Integrity Risk During a Crisis and a Downturn

As the pandemic unfolds and markets decline in the United States and globally, fraudsters will be adapting and new risks will emerge and some risks will increase.  Remember, white collar criminals adapt by profiling us, so they can exploit our weaknesses. That being said, companies need to develop a strategy that enables the deployment of appropriate tactics to manage this increasing risk.

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COVID-19 – Coronavirus: Crisis Management, Business Continuity, Fraud, and More!

Crisis Management: Some of the biggest mistakes made when handling a crisis are not dealing with the problem head-on, thoughtless or insincere comments, lack of communication with stakeholders, unprepared spokespeople, getting defensive after receiving backlash, or, sitting back and letting the problem grow. Domino’s, Sony, Samsung, BP, United Airlines, Equifax, KFC, are all good examples of companies who stumbled with crisis management. Companies should study these crises and learn from the mistakes!

In addition, fraud, compliance, and integrity risks may change. A crisis situation can and often does increase the pressure on senior management and of course salespeople to meet their sales targets! Deviant behavior is easily justified.

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IIA Philadelphia and Baker Tilly’s Fraud & Ethics Symposium is Postponed! Stay tuned for the new date.

This one-day fraud symposium, sponsored by Baker Tilly’s Global Forensic, Compliance and Integrity Services, and Solutions Practice Group and hosted by the Institute of Internal Auditors, Philadelphia Chapter, will include topics such as:

•Culture
•Current trends in white-collar crime
•Tone is the middle
•Policy management
•Case study on a local fraud

Discover who will be speaking and register for the event!

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Five Men Indicated for Worldwide Cryptocurrency Fraud Scheme

On December 10, 2019, three men were arrested in connection with an alleged $722 million cryptocurrency mining fraud scheme.  An additional defendant was arrested following the Department of Justice’s press release, and another remains at large.

From April 2014 through December 2019, Defendants solicited investments in its BitClub Network, a purported bitcoin mining pool that was operated by Defendants.  They are charged with exploiting unsophisticated investors with “false promises of large returns for investing in the mining of Bitcoin.”  The “complex world of cryptocurrency” allowed Defendants to take advantage of investors, which Defendant Matthew Brent Goettsche referred to as “dumb” investors, “sheep,” and “morons.”  Defendants manipulated the daily mining earnings amounts reported to investors in order to attract new investors and to encourage reinvestment of earnings, amassing at least $722 million in ill-gotten gains.

Read more to better understand how others exploit this perplexing concept, what the SEC has to say about the matter, and what the consequences are.

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Bribery Schemes and Their Compliance Responses

This writing will highlight some of the more unusual bribery schemes described in 2019 Foreign Corrupt Practices Act (FCPA) enforcement actions and also consider their impact on compliance programs, what they mean for the compliance professional and how the government could potentially use these cases to require more effective compliance programs going forward.
Fraudsters are always looking for loopholes and weak spots to exploit. The same is true for those engaged in bribery and corruption. The role of every compliance professional is to prevent, detect and remediate. By following some of the approaches I have outlined, you can move towards more robust detection.

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Fraud Tip Friday: Lessons From Recent FCPA Enforcement Actions

The United States government’s fiscal year ended on September 30, 2019. Just as in the business world, where many companies try and clear out any unexecuted deals or open contracts, the Securities and Exchange Commission (SEC) cleared out three outstanding Foreign Corrupt Practices Act (FCPA) enforcement actions. The three enforcement actions involved Quad/Graphics Inc., a Wisconsin-based digital and print marketing provider, and its Peruvian subsidiary, Quad/Graphics Peru S.A.; Barclays PLC; and a Canadian clean fuel company Westport Fuels Systems, Inc. and its former Chief Executive Officer (CEO), Nancy Gougarty of Leesville, South Carolina. The terms of each settlement agreement provide a different lesson for compliance practitioners.

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DOJ Updates FCPA Corporate Enforcement Policy

On November 20th, 2019, The Department of Justice (“DOJ”) announced updates to its Foreign Corrupt Practices Act (“FCPA”) Corporate Enforcement Policy. While the changes were relatively minor, the modifications underscored important principles surrounding the FCPA Corporate Enforcement Policy.  

This latest update follows extensive revisions made in March of this year and the announcement that the FCPA Policy will apply as non-binding guidance for all criminal cases; all reflect DOJ’s continued efforts to promote self-disclosures and provide clarity on DOJ’s approach for companies deciding whether to self-disclose. There is little doubt the DOJ has landed on a Corporate Enforcement Policy that took years to develop. The FCPA Corporate Enforcement Policy now applies to all corporate criminal prosecutions except Antirust Division criminal prosecutions that are guided by the Leniency Program. The DOJ is consistently applying the principles and appears to be very comfortable with the results.

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