Investigative Interviewing Techniques The Anti-Money Laundering Association

1. Investigative Interviewing TechniquesThe Anti-Money Laundering Association October 4th 2013

2. Agenda • Need for interviews • Importance of quality • Preparation • Building rapport • Investigative questions • Behavioral questions • Best practices • Specific examples Duff & Phelps

3. Need for interviews Common issues • Financial disputes • Due Diligence • Internal investigations • White collar matters • Noncompliance with policies • Healthcare investigations • Computer forensics • Asset theft Types of interviews • Subject interviews • Witness interviews • Victim interviews • Interviewees include: • Senior executives • Functional managers • Operational employees • Technical specialists • Spouses Duff & Phelps

4. Why Quality Matters • It matters to our clients: They risk losing “cooperation credit” if substandard interviews are conducted. • Seaboard Factors (corporations) • SEC Cooperation Program (individuals) • Renewed focus: Former SEC Director Khuzami commented about questionable investigative tactics employed by defense counsel. • “Checking the box” is not sufficient: Recent litigation highlights the importance of conducting thorough and defensible investigations. Duff & Phelps

5. Interview vs. Interrogation Interviews • Non-accusatory, conversational • Typically early in the investigation • Note taking is appropriate Characteristics of a Successful Interviewer Attitude: non-judgmental, cordial, polite, even-tempered Posture: relaxed, frontally aligned, uncrossed arms Tone of voice: conversational, smooth speech, no skeptical tone Interrogations • Accusatory, monologue • Guilt is suspected • No note taking Duff & Phelps

6. Preparation Key considerations • Overall strategy • Goals • Disclosure • Identifying cooperators • Role of attendees • Attorneys • Union representation • Note taker • Quantity of evidence on-hand • Factual analysis Decisions in advance • Choose the interviewer(s) • Sequence of interviews • Location and setting • Surprise or scheduled Materials to prepare • List of questions • Evidence or data • Responses to common questions • Review prior statements Duff & Phelps

7. Interview Setting Door Potential room layout Considerations • Supportive environments • Privacy and proximity • Scheduling • Distractions • Safety Best Practices Minimize barriers and create an open environment Limit the number of observers and set clear expectations for participation S O I Desk O Interviewer Subject Observer Duff & Phelps

8. Types of Questions General / Rapport • Conversational • Background and undisputed facts • Developing rapport • ~15% of questions • Best Practices • Show genuine interest • Avoid prepared lists • Use as a baseline Investigative • Specific in nature • Intended to understand and confirm facts • Initially open-ended • ~75% of questions • Best Practices • Avoid memory qualifiers & compound questions • Avoid leading phrases Behavioral • Specific in nature • Intended to assess deceptive behavior • Difficult to prepare for • ~10% of questions • Best Practices • Mix with later investigative questions • Avoid leading phrases Duff & Phelps

9. Developing Rapport Barriers to rapport • No introduction / conversation • Insincere tone • Demographic differences • Poor interview setting Key considerations • Benefits of rapport • Reduce anxiety / stress • Increase open communication • Additional purposes • Collecting background • Establish tone of the interview • Establishing a baseline for behavioral assessment • Gain themes for future negotiations / interrogations • Get commitment from interviewee Duff & Phelps

10. Investigative Interviewing • Determine access of interviewee • Evaluate interviewee tendencies • Assess interviewee motivations Six fundamentals of investigative questions • Fact collection, understand process • Assess knowledge of the events • Account / alibi of interviewee Duff & Phelps

11. Investigative Interviewing Fact collection and understanding the process • Standard fact gathering questions. • Begin with open questions, then clarify. Pause for a complete response. Assess the interviewee’s knowledge of the issue or events • Establish the interviewee’s knowledge or involvement. • Assess the level of preparation or coordination prior to the interview. Sample questions [Proper] Would you explain each step required to issue a check? [Proper] Are there any exceptions to this process? • [Proper] What is your understanding of the reason for this interview? Duff & Phelps

12. Investigative Interviewing Determine the interviewee’s alibi or version of events • Begin with open questions, then clarify. Pause for a complete response. • Be aware of variations in level of detail, and probe for omitted details. Evaluate the interviewee’s access (knowledge or special means) • Identify what special requirements would be necessary of a guilty party. • Determine if the interviewee has access to each requirement. Sample questions [Proper] Please tell me everything you did from 6:00 to 10:00 last Friday. [Improper] Where were you at 7:15 on Friday? • [Proper] Do you have access to that system? Have you ever had access to that system? Duff & Phelps

13. Investigative Interviewing Evaluate the interviewee’s tendencies toward events in question • Does the interviewee have a history of conducting the acts in question? • Probe multiple angles and follow-up on all information disclosed. Assess the interviewee’s motivations • Avoid opinion questions, focus on rankings. • Offer a scale of 1 to 10, and follow-up if they do not give themselves a 10. Sample questions [Proper] Have you ever been charged with a crime? Questioned?, Accused?, etc. • [Proper] On a scale of 1 to 10, how would you rate your financial situation? • [Proper] How much money would you need to bring your rating to a 10? Duff & Phelps

14. Behavioral Interviewing Behavioral Symptom Analysis The systematic study of behavior symptoms to identify the probable truthfulness of a subject, victim, or witness. Channels of communication • Verbal • Word choice and arrangement • Paralinguistic • Speech other than spoken word • Nonverbal • Posture, movement, gestures Duff & Phelps

15. Behavioral Attitudes Typical truthful attitudes • Composed • Concerned / Realistic • Cooperative • Direct / Spontaneous • Open / Helpful • Sincere • Confident Typical deceptive attitudes • Overly anxious • Unconcerned / Unrealistic • Uncooperative / Defensive • Guarded / Evasive • Rationalizing / Unhelpful • Insincere • Defeated Attitudes common to both truthful and deceptive subjects include nervous, fearful, and angry. Duff & Phelps

16. Assessing Body Posture Truthful • Upright • Open and relaxed • Leaning forward on occasion • Body facing interviewer • Casual movements Deceptive • Retreating from interviewer • Barriers • Frozen • Slouching • Erratic posture changes Duff & Phelps

17. Verbal Behavior Symptoms Evasion • Is there a definitive answer? • Lying by referral (very cunning) • Deceptive subjects may deny broadly, or use specific denials • Vague language is less truthful Definitive statements • Deceptive subjects may use generalizations or qualifiers • Common preludes to a lie • Truthful subjects offer definitive responses, “no I didn’t” Lying by referral: “As I stated earlier…” • Specific denials: “I did not do it last week” (actually did it the previous week) • Generalizations: “typically”, “generally”, etc. • Qualifiers: “as best as I recall” • Omission qualifiers: “no particular time” Duff & Phelps

18. Verbal Behavior Symptoms Bolstering statements • Deceptive subjects feel the need to convince you • Truthful subjects are confident Spontaneous responses • Truthful subjects offer natural and spontaneous answers • Deceptive subjects may seem rehearsed • Listing or making points is common Bolstering statements: “I swear”, “to tell you the truth”, “honestly” • Listing: “First of all, I don’t need the money. Second, I was home with my wife. • And finally, I know better!” Duff & Phelps

19. Common Behavioral Questions How do you think the results of the investigation will turn out? • Truthful subjects tend to be confident. • Deceptive subjects use phases like: “I hope”, “it should”, “I think” Why wouldn’t you do something like this? • Truthful subjects use first person responses. • Deceptive subjects defer: “it’s against the law” or “it’s against policy” What do you think should happen to a person who would do this? • Truthful subjects offer appropriately strong punishment. • Deceptive subjects offer what they would prefer: “counseling” Duff & Phelps

20. Baiting Technique Basis for the bait • Reserved for deceptive subjects • Typically the final question • Solidify commitment beforehand • Establish credible incriminating evidence and ask sincerely Evaluate the response • Deceptive subjects may: • Respond with a delay • Repeat the question • Answer with a question • Freeze • Do not challenge changing stories Definition: A non-accusatory question which implies the possible existence of incriminating evidence. Attempts to entice the subject to change a previous statement. Example: “any reason why someone would say they saw you in the area when this happened? Not that you did anything, but maybe you were just out for a walk nearby.” Duff & Phelps

21. Best Practices • Preparation is the key to a successful interview • Do not conduct group interviews • Maintain custody of key evidence; provide copies if needed • Maintain hand-written notes and memorialize consistently • Do not make promises • Take advantage of rapport; “what else should we be discussing?” • The interview doesn’t stop at the door; always pay attention Duff & Phelps

22. Specific Examples • Interviewing with opposing counsel present • Technical experts (IT, accounting, etc.) • Refusing to acknowledge the data or evidence • Overly combative or defensive subjects • Catching someone in a lie • Good cop / Bad cop • Unannounced interviews Duff & Phelps

23. References • SEC Seaboard factors; release 44969 • http://www.sec.gov/litigation/investreport/34-44969.htm • SEC Director Khuzami’s remarks to criminal law group • http://www.sec.gov/news/speech/2011/spch060111rk.htm • John E. Reid & Associates, Inc., The Reid Technique of Interviewing and Interrogation, 2011 • John E. Reid & Associates, Inc., The Advanced Course on the Reid Technique, 2011 Duff & Phelps

24. Questions Christopher Haney, CPA, CFE, CRT, CAMS Duff & Phelps LLC 311 South Wacker Dr. 312.697.4520 christopher.haney@duffandphelps.com Duff & Phelps

25. Christopher Haney Chris Haney is a Director in the Chicago office of Duff & Phelps and is part of the Dispute Consulting Practice. Chris specializes in financial investigations and forensic accounting. He is also a member of the firm’s Integrated Healthcare Group. Previously, Chris was a member of the FBI’s Forensic Accounting Unit specializing in complex White Collar and Healthcare violations. Chris has led extensive financial investigations with experience spanning criminal, civil and internal corporate matters. Prior to joining the FBI, Chris spent five years at General Electric. While at GE, Chris was part of the Corporate Audit Staff focused on internal investigations and acquisition due diligence across a breadth of industries including healthcare technology, medical equipment manufacturingand financial services. Chris previously worked at a Fortune 500 healthcare consulting company focusing on emergency department operations, and continues to serve in the U.S. Army Reserve as a Medical Services Officer and a Medical Unit Commander. Chris earned his M.B.A. from the University of Virginia and his B.S. from the Virginia Military Institute. He is a certified public accountant (CPA) a certified fraud examiner (CFE) and a Certified Anti-Money Laundering Specialist (CAMS). He is also certified in the Reid Technique of interviewing and interrogation. Duff & Phelps, LLC Director, Dispute Consulting Chicago +1 312 697 4520 Christopher.Haney@duffandphelps.com Duff & Phelps