(Blog Posting I)
The world isn’t run by weapons anymore, or energy, or money. It’s run by ones and zeros—little bits of data—it’s all electrons…There’s a war out there, a world war. It’s not about who has the most bullets. It’s about who controls the information—what we see and hear, how we work, what we think. It’s all about information.
–Sneakers, MCA/Universal Pictures, 1992
As surely as the future will bring new forms of technology, it will bring new forms of crime.
–Cynthia Manson & Charles Ardai (eds.) Future Crime: An Anthology of the Shape of Crime to Come
(New York: Donald I. Fine, 1992, p. ix)
(By Sri Ramamoorti and David Sems) Founded in 1993 at Carnegie-Mellon University, the Human-Computer Interaction Institute is a laboratory set up to investigate the relationship between computer technology, human activity and society. That was over 20 years ago, when computer forensics was in its infancy; e-mail messaging was fairly uncommon. As technology fueled global communications advances, and cyber-fraud became a reality, computer forensics took off. It was not until 2013, the year of publication of A.B.C.’s of Behavioral Forensics, a book so frequently mentioned in this blogsite, that the behavioral sciences, especially psychology and psychiatry, were seriously explored to understand why people commit fraud. In this and a subsequent blogpost, we will draw attention to the need for fusing the behavioral forensics and computer forensics approaches—how they feed into each other, how they can inform each other, and understand the synergistic power of an integrated perspective.
Dorrell & Gadawski (2012) define forensic accounting as “the art and science of investigating people and money.” “Computer forensics” is the use in fraud investigations of advanced technology capabilities such as key word searches, computer and data imaging, electronic evidence, link and network analysis, data mining and predictive analytics, etc. to identify incidents of fraud. Behavioral forensics parallels computer forensics by leveraging insights from the behavioral sciences to understand primarily the fraudster’s motivations, but also looks at the psychology of the victims, as well as the fraud investigators themselves. To the extent that fraud involves intent to deceive, the ecology of fraud necessarily is infused with behavioral implications throughout. However, to truly understand these behavioral elements, an important aspect of the contemporary investigative approach also involves electronic evidence gathering, for most complex white collar crimes involve technology.
In a prophetic speech by former British Prime Minister, Gordon Brown, then UK chancellor of the exchequer, on “meeting the terrorist challenge,” given to Chatham House, October 10, 2006, he asserted, “What the use of fingerprints was to the 19th century, and DNA analysis was to the 20th century, so financial information and forensic accounting has come to be one of today’s most powerful investigative and intelligence tools available in the fight against crime and terrorism.” Clearly, forensic investigations in the 21st century find computer forensics to be indispensable. Nevertheless, we must understand that computers and technology, by themselves are mere instruments. They are inert and insentient. They require human beings to use them as powerful weapons and tools to aid in the perpetration of fraud. Of course, the better the technology capabilities of a fraudster, the better use s/he can make use of it for not only committing fraud, but also concealing it. For instance, consider the recent heist of $81 million from the Central Bank of Bangladesh that involved a potential compromise of SWIFT credentials. Such sophisticated hacking of banks will likely continue in the future. After all, cybercriminals are human beings first, so the general principles of psychology must apply to them.
Fraud is very much a “human endeavor” (Ramamoorti & Olsen, 2007; Ramamoorti, 2008). Much of human behavior is influenced by emotions. Hence looking at “manipulation of emotions” is key to understanding fraudsters’ methods and tricks in deceiving victims. There is a rapidly developing literature around the science of persuasion: “that magical power to capture your audience, sway undecideds, convert opponents” (Cialdini, 2007). Even the IT field acknowledges the importance of understanding “social engineering” to get at the human element surrounding technology. And human beings have found technology to be a very helpful tool in white collar crime. More on just how that can happen in our next and final posting on this subject.
Dorrell, D.D. & Gadawski, G. A. (2012). Financial Forensics: Body of Knowledge. Hoboken, NJ: Wiley.
Gordon Brown’s speech on terrorism (2006). Full text can be found at http://www.theguardian.com/politics/2006/oct/10/immigrationpolicy.speeches
Ramamoorti, S, & Olsen, W (2007). Fraud: The Human Factor. Financial Executive, July/August, pp. 53-55, the professional journal of Financial Executives International (FEI).
Cialdini, Robert B. (2007). Harnessing the Science of Persuasion. In Bloomberg, December 4, 2007. http://www.bloomberg.com/news/articles/2007-12-04/harnessing-the-science-of-persuasionbusinessweek-business-news-stock-market-and-financial-advice
BEHAVIORAL FORENSICS GROUPTM LLC
The Behavioral Forensics GroupTM LLC is a team of professionals with vast experience in detecting fraud, understanding why it occurs, and in recommending steps to mitigate fraud incidence within the corporate workplace, particularly within higher-level (and therefore more costly to the enterprise) executives. The fields of investigation, organizational psychiatry, accounting and behavioral forensics, and law enforcement are represented within the Behavioral Forensics GroupTM LLC. Acting in synergy to help organizations prevent, find, and/or reduce fraud, B4GTM is a premier, pioneering practice in this field.
We are blogging at: http://www.bringingfreudtofraud.com