Certified Fraud Examiners: Going Above and Beyond to Uncover the Truth

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construction; government contractor and technology; not-for-profit; real estate; emerging growth companies business advisory; forensic accounting

By: Bob Hersh

Abstract:

Is it just a coincidence that the original and loudest critic of Bernie Madoff’s world record Ponzi scheme is a Certified Fraud Examiner (CFE)? We think not. After all, CFE’s don’t even take “Yes” for an answer. They one-up Ronald Reagan’s slogan of “Trust, But Verify” and live by the credo “Don’t Trust, Verify the Heck Out of It.” What distinguishes Harry Markopolos’ DNA from a regular auditor’s DNA? Here are five key characteristics that shed light on Markopolos’ CFE-trained mindset.

Don’t Give Anybody a Free Pass - While Madoff’s impeccable reputation as a former Chairman of the Board of NASDAQ and his

family connection inside the SEC charmed potential investors, these facts elevated the suspicions of and intensified the challenge for Markopolos. He relished the chance to buck the status quo.

If you want to uncover an issue that has been swept under the carpet, then hire a Certified Fraud Examiner.

Develop Rock Solid Analysis - Markopolos mathematically proved that Madoff’s alleged investment strategy called “split-strike conversion” could at most earn Treasury Bill rates, not the 12% return that was advertised. He also proved that there were not enough index put option contracts in the whole world to cover what Madoff claimed he, alone, was using as a hedge. Irrefutable evidence developed by a CFE is a litigator’s dream. Want to know the other characteristics of a CFE? Download the full PDF of the article below.

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