Here is a DOJ report on various cases outlining the mechanics of investigating accounting fraud cases. This seems to be the most popular kind of criminal conduct...
usdoj.gov
Segmenting Investigations
Rather than spending years putting together the “perfect” case, where each possible defendant and all wrongdoing is compiled into a single indictment or enforcement action, member investigators and attorneys have been instructed to undertake their actions as swiftly as possible. This “real-time” enforcement is best accomplished
when distinct cases, which comprise a separate segment of conduct involved in a larger investigation, are brought when they are ready and as expeditiously as possible.
In the WorldCom case, for example, the SEC filed its civil enforcement action the day after WorldCom announced its restatement. Ultimately, WorldCom agreed to pay $750 mil-lion to victim-investors in settlement of those charges.
Simultaneous with the civil enforcement action in WorldCom, prosecutors from the United States Attorney’s Office for the Southern District of New York and FBI agents from the New York Field Office and elsewhere conducted a focused and thorough parallel investigation of the largest accounting fraud in U.S. history, resulting in swift criminal charges being brought against top officials of the company.
More specifically, within days of WorldCom’s restatement, prosecutors and agents identified and began to debrief virtually all of the key witnesses. During these interviews, it became clear that WorldCom’s accounting irregularities extended to other aspects of its financial reporting. Prosecutors and agents decided, however, to remain focused on and master fully those issues relating to the reduction of line cost expenses, saving investigation of other suspect areas for later.
As a result, prosecutors filed a criminal complaint against WorldCom’s former CFO and former Controller on August 1, 2002, five weeks after the initial revelation of the accounting fraud. |
