The ACFE is the professional organization for
fraud examiners. The mission of the ACFE is
to reduce the incidence of fraud and whitecollar crime, and to assist the membership
in its detection and deterrence.
2009-2010 Board Members
President:
James Fellin, CPA, CFE
jfellin@nottinghamgroup.com
412-288-9948
Vice President:
Richard Hilliard
Richard.Hilliard@parentebeard.com
412-697-6412
Secretary:
John Elliott, CPA, CFE
jelliott@bc.pitt.edu
412-624-6127
Treasurer:
Kelvin Pier, CFE, CPA
kpier@piersolutions.com
412-759-8698
Directors:
Craig Workman, CFE
workmanc@upmc.edu
412-454-5524
Joan Gibson
joan.gibson@highmark.com
412-544-2472
Dan Chacko, CFE, CMA, CIA, CPA
dan.chacko@carmeusena.com
412-995-5566
August 11, 2010
James Fellin, CPA, CFE
2010 Report to Nation
James Fellin, CPA, CFE, Managing Partner of
The Nottingham Group, a forensic accounting
boutique. Mr. Fellin is the current President and
Education Director of the Greater Pittsburgh
Chapter of the ACFE. Jim’s presentation will
review the latest data and information included in
the ACFE 2010 Report to the Nation.
The ACFE's 2010 Report to the Nations on
Occupational Fraud and Abuse is based on data
compiled from a study of 1,843 cases of
occupational fraud that occurred worldwide
between January 2008 and December 2009. All
information was provided by the Certified Fraud
Examiners (CFEs) who investigated those cases.
The fraud cases in our study came from 106 nations
— with more than 40% of cases occurring in
countries outside the United States – providing a
truly global view into the plague of occupational
fraud.
Alison Calderone Kline, CPA
acalderone@3kcpa.com
412-281-1901
Yulia Bolotskikh, CFE
yulia.bolotskikh@alcoa.com
412-553-3481
Upcoming Chapter Events
September 8, 2010
Dennis Kistler
Pennsylvania Attorney General’s Office
Insurance Fraud Prosecution
Congratulations to the elected
officers for 2010-2011.
Chapter Elections were held at the June
Meeting. After tabulation of the returns, the
Board unanimously approved the election
results. The following is a list of the 2010 –
2011 Officers.
James Fellin returns as Chapter President for
what he claims will be his last year as President.
Richard Hilliard was elected to Vice President.
John Elliott returns as Secretary. Kelvin Pier is
the Treasurer. Craig Workman was elected as one
of the Directors. Since there were so many
interested candidates, the number of Directors
was expanded from three to five. The June
election brings four new names to the Chapter
Board of Directors. New Directors on the Board
include Dan Chacko, Audit Director for
Carmeuse; Joan Gibson, of the Highmark
Integrity Office; Yulia Bolotskikh is a Financial
Fraud Investigator for Alcoa; and Alison
Calderone Kline, Staff Accountant of Kline,
Keppel and Kornyak.
Thank you to all of the Chapter Officers and
Directors for volunteering their time on behalf of
Chapter!
Thank You Georgene Fink!
A special thank you and well wishes to
Georgene Fink. Georgene retired as a
Special Investigation Representative
Since the inception of the Report to the Nation
more than a decade ago, the ACFE has released
five updated editions — in 2002, 2004, 2006, 2008
and the current version in 2010. Like the first
Report, each subsequent edition has been based on
detailed case information provided by Certified
Fraud Examiners (CFEs). With each new edition of
the Report, the ACFE adds and modifies the
questions we ask of survey participants in order to
enhance the quality of the data collected. The
evolution of the Report to the Nation has enabled
fraud investigators to continue to draw more
meaningful information from the experiences of
CFEs and the frauds they encounter. The 2010
Report, for the first time, widened the study to
include cases from countries outside the United
States. This expansion will allow for a more full
exploration of the truly global nature of
occupational fraud and provides an enhanced view
into the severity and impact of these crimes.
Please join us for this interesting and relevant
presentation.
June Speaker Shaun Sweeney, US
Attorney’s Office
The lunch meeting speaker for June was Shaun
Sweeney who was a late replacement for James
Fellin’s presentation on the 2010 Report to the
Nation.
Mr. Sweeney is a member of the US Attorney’s
Office, White Collar Crime unit. He specializes in
financially motivated arson, which he stated, is
different that arson for profit. Usually, financially
motivated arson is arson that is motivated by a
desire to get out from behind debt. The fraud aspect
usually has to do with the business owner
committing fraud against an insurance company.
The Federal Arson Statute targets malicious
damage or the attempt to damage property by
from HM Insurance Group in June. Georgene
worked a number of years in the insurance
industry, and was a Chapter leader as Secretary
and Director for a 10 years. Georgene plans to
spend a lot of her time in her pool enjoying a
healthy retirement. Best wishes Georgene for a
long healthy and happy retirement, and thank
you for your efforts on behalf of the Chapter.
ACFE News
New! 2010 CFE Exam Prep Course,
U.S. Edition
Attention ACFE Associate member: Get
certified in 2010 with the new 2010 CFE
Exam Prep Course. Featuring the updated
Fraud Prevention and Deterrence section
(formerly Criminology and Ethics), the 2010
CFE Exam Prep Course is the most
comprehensive study tool available to
prepare you for the CFE Exam. Purchase the
CFE Exam Prep Course at the ACFE
Bookstore and start working toward your
CFE credential today.
Auditing for Internal Fraud
Philadelphia, PA | August 26-27, 2010
Detecting Fraud Starts on the Inside
ACFE’s 2010 Report to the Nations on
Occupational Fraud and Abuse discovered that
internal audits uncovered 14% of frauds
compared to 5% by external sources. This twoday course, will teach the fundamentals of
auditing for fraud, with an emphasis on
understanding the common schemes, legal
elements, detection techniques and methods of
preventing occupational fraud.
fire or explosives. The unique element of the
Federal Arson statute is that the property must be a
commercial property used for interstate commerce.
This includes rental properties. A conviction under
the statute carries a mandatory minimum 5 year
prison sentence, unless someone is injured as a
result of the arson, in which case the mandatory
minimum sentence is 7 years. As a result of the
mandatory sentences, there are virtually no plea
bargains.
Arson cases are investigated at the Federal level by
the BATFE, formerly known as the ATF. The
BATFE is organized into two main groups;
Firearms group and Arson/Explosives group. The
Arson/Explosives group is made up of 7 agents, 2
forensic auditors and 1 fire investigator. The
BATFE becomes involved in an arson investigation
as a result of a referral by an insurance company or
upon notification by a local fire marshal. After a
fire is put out, a fire marshal will review the scene
to determine the cause and origin of the fire. The
marshal will look at the burn pattern to identify the
area of the greatest damage, which should identify
where the fire originated.
There are 4 key elements to a successful arson
prosecution.
1
Solid arson call – contradicting expert
reports can make case difficult. The
best evidence of arson is multiple
unconnected sites of origin.
2
Evidence that defendant solicits
someone to commit the arson.
3
Defendant lies to the insurance
company. Most policies require an
examination under oath where the
policy holder can be questioned about
their financial condition while under
oath.
4
A strong motive exists. If you don’t
have strong evidence of motive, the jury
may question why the accused would
commit the arson.
Course Leader: Allen F. Brown, CFE, CPA
During the course of his career, Mr. Brown has
conducted or supervised in over 200 investigative
audits and brings this knowledge to you.
What You Will Learn
Avoiding malpractice: the auditor’s fraud
responsibilities
The fundamentals of occupational fraud and
abuse
Techniques for balance sheet and income
statement analysis
Deterrence of management and occupational
fraud
Event Location
Doubletree Hotel Philadelphia
Fees
ACFE Members: $695
Non-Members: $845
Prerequisites
None
CPE Credit
16
Usually the motive is to defraud the insurance
company. By submitting a claim with false
information to the insurance company, the mail
fraud statute can come into play. To show motive,
documentation of the suspect’s financial condition
are obtained. Grand Jury Subpoenas can be issued
to obtain bank records. Tax returns can be obtained
through an Affidavit Under Seal. The tax returns
can then be compared to returns filed with the
insurance company.
Sweeney advised a Grand Jury needs probable
cause in order to issue an indictment. Witness
testimony is locked in under oath. The Grand Jury
meets in secrecy and can subpoena documents from
anywhere in the United States.
Sweeney concluded his presentation by taking
questions from the group.