Accept that it happened
- The most common and largest mistake is, to ignore a large fraud case. The perpetrators will continue, and the case will increase in size since they met no resistance. Since many employees and external stakeholders frown on fraud, it will come out eventually.
React - preferably overreact
- The difference between a crisis and a scandal - is how the situation is handled. Yes, this actually happened to you. All pilots dream of a crash free career - some don’t get to live the dream. The two option that remain for you, is to make a great crashlanding or a fatal crash. These are the options that are still left for you, and you have to pick now before it's too late. The problem won’t disappear. If you ignore what happened, you and your organisation will have a scandal on its hands rather than a crisis. Ever heard of a Major Fraud or Money Laundering case that was turned in to the authorities and dealt with in time? Remember, all the fraud and Money Laundering scandals you know off, are the once that weren’t dealt with in time.
Dont be ashamed
- You are not the first, nor the last. This happens all the time. The known cases which comes to the media, are just the top of the iceberg. Twenty years, of heavy investment in emerging markets which had virtually no legal body, and criminal organisations focus on adopting to the use of the internet has resulted in an international epidemic of fraud and money laundering cases. - It’s every where. Most companies and organisations are dealing with this in a quiet and subtle manner. If you weren’t hit till now - you were simply lucky.
Go public
- Once you know what happened. Tell the world about the case, dont keep it a secret. It is only news the first time it comes out. If you are the source of the news, you can control the story. If dealt with professionally, you may even manage to avoid the frontpage. This means that next time someone mentions it, the media will regard it as old news.
Understand the villains motive
-While you may be a victim, you need to understand, what the perpetrators want. If they are using you for financing a terrorist attack, you don’t want to get in their way. While if they are making a secret retirement fund, you can easily expose them. The nature of the beast, decides the weapon to be wielded.
Start your crisis management now!
- From of now, you are in a crisis! Yes, you are! Denying it will only let it grow. You will prefer to manage a small crisis, rather than a large one. Nobody, wants to be the first to say it out loud, and it is offend taboo. But on the long term that’s how you win, and get to keep your job! (That includes CEO’s and Chairmen). Assemble the crisis management team, and start managing the crisis. Stop the fraud, find out how it happened, and prevent it from happening again.
Prepare your self
- This happens all the time, and there are no excuses for not being ready for it. Even though you have a good reason for not being ready, investors, authorities and the media will not accept it. You need to have an internal team for conducting an investigation or you should wet an external partner. Have the capability ready.
Be humble
- Expect that the fraudsters and money launderers are better than you. You are up agains some very advanced players. This may include intelligence agencies, mafias, and terrorist organisations. They are professionals who know how to do this, and how you will react!
Get external support
- Its scientifically proven that the less you know, the more confident you are. To be over confident in this situation is unfortunately normal. While you may be good, you should expect that you are overestimating your self in this. Furthermore, Nobody wants to tell legal that they were sloppy, that communications aren’t proactive and that HR needs to do background checks proporly. There is plenty of bad news that has to be said, and it's better that its said from a person who will leave again. Get external support, to give the bad news and to say what nobody wants to say. The elefant in the room has to be addressed. Remember, eventually you need to clean up internally, it's easier to accept if this comes from external professional advice.
Expect that its a lot bigger!
- Very few cases are only involving one or two people on the inside. Todays schemes are done via networks of people who are organised across multiple organisations and countries. You must expect that they are mostly connected to the outside, and to your organisation.
Trust no one
- At least, not in the beginning. Everybody could be involved, and some times they are! Some CEO’s have made their careers on ignoring major Money Laundering cases, because it ensured high turnovers. Some have also elevated them self into being public figures! Non mentioned, and non forgotten!
This is not a compliance issue
Fraud and money laundering doesn’t crow when there is lack of compliance. It's the other way round. The issue isn’t lack of compliance, the perpetrators ensured that there wasn’t compliance from the inside, so that they could continue with the fraud. Or even worse, they ensured that the paper work was in perfect order, so that no one would be suspicious.
Compliance won’t help you
Compliance is abut doing what has to be done to satisfy externals, so that their risks are mitigated, it isn’t to help you! Hence, compliance isn’t made to protect you against this case. If you had compliance, it didn’t help did it?
Don’t hire hundreds of external accountants or lawyers
They will tel you that they can uncover what happened, and that you will know if there is more. A picture of Disney’s Cinderella, where the mice and birds are sewing a dress for Cinderella - an easy fix. Well, nothing is that easy!
There is only one way, the hard way!
“We have many months of hard work and toil in front of us”. - Sir Winston Churchill. Start from an end, and work your way through it. Manage the crisis and the investigation that have to be done, accept that in time this will come to an end! Eventually it will be fine, if you accept the very nature of the situation!
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