Managing Fraud Risk: A Practical Guide for Directors and Managers

Fraud Investigation Case Study

Project “Fuschia” – A Case Study

The Opening

1. Initial Preparations

The case begins for me with a phone call. It is John, the Head of Internal Audit (“IA”) at a very large FTSE 100 public limited company in the UK (“the Group”) and he has both a story and a proposition for me. Do I remember Mr X? “Yes, vaguely” I reply. John then proceeds to tell me that the Group Chairman has just received an anonymous letter in which the unnamed source has made a number of serious allegations against Mr X about corruption with suppliers. The Chairman is very concerned – he wants the allegations to be thoroughly investigated.

I recognised the name as soon as I heard it and now things start to come back to me about Mr X. I seem to recall hearing similar stories about him earlier. John confirms that these allegations are along the same lines as a number of other rumours about Mr X that IA is already aware of. They all point in the same direction – basically, that Mr X has been receiving backhanders from suppliers in return for awarding those suppliers contracts and repeat work. John shares his Chairman's concerns that there could be a big problem in the business and he is determined to get to the bottom of it. He is in the process of putting together an investigation team to do just this, but he has one practical problem. He himself is due to leave the Group in the near future to take on another position elsewhere. So, he is looking for a case manager, somebody ...