This is the last installment in a four-part Hillard Heintze series on the top trends in 2017 we expect to see driving best practices and priorities across the U.S. and the world in four areas: security risk management; threat and violence risk management; investigations; and law enforcement. This post focuses on investigations.
The year 2016 will be remembered for many things, including a contentious presidential election in which investigations of hacked emails, private servers and so-called fake news figured prominently. Whatever one’s political sentiments, it’s clear we are now living in an age when the intersection of technology and truth has become trickier than ever.
As investigators, we strive to stay on top of such trends, which is why technology – and politics – play leading roles in our forecast of trends we expect to impact investigative best practices and corporate priorities in 2017. As investigators, we’re more accustomed to dealing with facts than predictions, but it’s a safe bet that we’ll be following trends such as the following closely in the coming months.
Investigative Trend 2017 #1: Political Change and Uncertainty Could Create Opportunities for Fraud
Anytime a change in administrations occurs in Washington D.C., it creates uncertainty – and rarely more so than this year. But based on the current political climate, it appears that we could see changes in healthcare in 2017 as well as the introduction of a major infrastructure spending bill. Either would open up large windows of vulnerability to fraud and, by extension, new waves of investigations.
- First, consider healthcare. Congressional Republicans and the new administration have long expressed a desire to repeal Obamacare and replace it with something else. Yet political realities mean the repeal may begin before a replacement is ready. Such a gap, and any resulting chaos in the consumer market would create opportunities for unscrupulous operators to commit healthcare fraud. Lack of clarity is a fraudster’s best friend.
- Second, consider infrastructure improvement – with a price tag as high as $1 trillion, according to many economists and policy planners. The risk of fraud rises exponentially with respect to factors such as total construction budget and expenditure, contract complexity, duration of implementation timetable, and authority and funding invested in governance and oversight mechanisms. The theft of materials and equipment, fraudulent billing and lax oversight are among the risks inherent in such an endeavor, and there is sure to be an enormous need for investigators to help uncover the truth when such instances inevitably occur.
Investigative Trend 2017 #2: Asset Searches Could Rise as More Borrowers Default on Their Loans
According to American Bankruptcy Institute figures, commercial bankruptcies increased in 2016. Other reports peg total commercial bankruptcies at 26 percent in 2016 compared to 2015. With interest rates poised to rise in 2017, leading to a possible increase in defaults by borrowers unable to meet higher interest payments, this increase in bankruptcies may well accelerate.
If so, this will significantly increase demand for asset searches. In general, an asset search is exactly what it sounds like – an investigation, usually carried out in conjunction with the lender’s attorneys, prior to filing a lawsuit. These investigations focus on assets a business or person may hold. Clients use this information not only to determine if a debtor party has sufficient assets to make suing them worthwhile but also to satisfy any concerns they may have about the truth of a debtor’s declaration about his or her assets.
Investigative Trend 2017 #3: Organizations and Individuals in Possession of Data Acquired through Cyber Crime Will Be More Likely to Encounter Prosecution, Lawsuits and Financial Penalties
From an investigative standpoint, 2016 also may be remembered as the “Year of the Hack.” The hacking of the Democratic National Committee, attributed to Russia by the U.S. intelligence community, was among the highest profile, along with subsequent leaks and publication of this information through multiple channels. Other targets in 2016 included Citibank, Verizon, Myspace, LinkedIn and Yahoo.
As we step into 2017, we caution that phishing scams, a common source of hacks, are now more prevalent than ever. Sophisticated criminals target busy employees who already are on email overload and even the most vigilant fall victim to the scam by erroneously transferring money causing a company to suffer a substantial fraud.
At the same time, we expect to see higher levels of prosecution and enforcement action in 2017 targeting organizations and individuals in possession of private information acquired illegally through hacking, cyberattacks and other malicious activity.
Investigative Trend 2017 #4: Social Media’s Role as an Investigative Tool Continues to Grow
Social media use will continue to disrupt and transform traditional investigative methods and techniques. In a few short years, social media monitoring and mining have evolved from a “nice-to-have” capability to an important best practice in litigation cases. It has also become essential in threat and due diligence investigations and assets searches. With the advent of new tools and technologies to search, aggregate and filter online data, we see social media monitoring, investigation and analysis becoming an even more important and effective investigative tool in the year ahead as more people rely on it as a primary means of communication and expression.
Other benefits of using social media in investigations include the ability to:
- “See” into the lives of those who live in places where public records are not easily accessible or who have little or no public records footprint;
- Quickly identify areas of focus in an investigation;
- Discover assets not otherwise identified through more traditional research; and
- Use geo-tagging, content commentary and special interest pages to identify parties associated with an individual or incident under investigation and who therefore may be useful to that investigation.
The list of benefits of social media monitoring goes on and on.
Investigative Trend 2017 #5: Is Social Media’s Role in Threat Cases: Is It Tripping People’s Triggers?
In addition to its use as an investigative tool, social media as a mode of communication and expression now has greater prominence than ever before – particularly given Donald Trump’s use of Twitter throughout his campaign and into the first weeks of his presidency. As I noted in my blog “The Top 5 2017 Trends in Workplace Violence Prevention and Threat Assessment,” we see a continued demand to identify, investigate, assess and manage threats from within and outside the workplace. Although social media isn’t always the cause of a conflict – and therefore isn’t the only factor in increased threat work in our space – we are concerned that we will see a rise this year in the use of social media to make threats – whether anonymously or under the user’s true identity and whether explicit or implicit.