How I Learned to Listen for Clues in Fraud Interviews — An Interview with Jerry Buchleitner
An unexplained cash shortage can warrant a closer look, but it tells you little on its own. For Jerry Buchleitner, a private investigator with 35 years of experience across corporate loss prevention, federal background investigations, and private investigation, the work begins by separating what people suspect from what the evidence shows.
In this interview, Buchleitner discusses the early signs of internal fraud that businesses often miss, what leaders should do when concerns first arise, and where human judgment still matters as artificial intelligence becomes more common in fraud detection.
Jerry Buchleitner, Licensed Private Investigator, Consultant & Speaker
What first drew you to investigative work, and how has that interest evolved over your 35-year career?
What first drew me into investigative work was back when I studied Criminology in college; courses about human behavior intrigued me. How the human mind works and decides to commit crimes, whether violent, white-collar, financial, or any other type. I was a psychology major and realized I could double major in Criminology to make myself more marketable in the world. Once various coursework in Criminology interested me, I was “hooked”. Since using this knowledge to gain experience and apply it in the business world, it has evolved in my 35-year career.
When I began working in the world, it was many years prior to the internet, social media, etc. Investigative work was much more involved than it is now, as one had to research data by physically going to courthouses, police departments, businesses, and the like to obtain facts surrounding a particular crime. It also entailed interviewing individuals who were suspects and witnesses. I realized early on that no amount of bookwork can teach you like real-world experience. One must have the desire to uncover the facts and the truth about an incident and stay vigilant, calm and unbiased while performing investigative work.
While investigating, one is, at times, bombarded with opinions, rumors, and talk about what they feel has happened and who they think is guilty of a particular crime being investigated. The “legwork” involved has evolved greatly since the introduction of the internet, which includes all kinds of details that may aid an investigator in resolving a case. This, in my opinion, has made it much easier to obtain facts and it’s also a time-saver. This now includes AI (which I will address in more detail later in this interview).
Having worked in corporate loss prevention, federal background investigations, and private investigation, what has each field taught you about uncovering the truth?
In my career, I have worked in corporate retail loss prevention, Federal Government background investigations and now private investigations. What each field has taught me about uncovering the truth is how individuals are interviewed and what that investigator brings to the interview in the way of facts. “The more the merrier,” as the saying goes. Initially, an investigator must do what it takes to obtain facts primarily. What one does with those facts when confronting a person and how they are confronted are crucial.
In my experience, I haven’t dealt with hardcore criminals, but people who, when presented with a chance to commit a crime, no matter what it is, can’t resist and make the wrong decision. For the most part, the individuals I have met are basically good people. Therefore, through my experience, book knowledge and coursework, I have been successful in using a “human resource” type of approach. If an investigator has all the facts needed and doesn’t approach that suspect with a calm demeanor, the chances of that suspect getting defensive are much higher. This type of approach has worked well for me in all the above employment experiences.
One seminar I attended many years ago, which has aided me greatly in interviewing someone, is the Wicklander-Zulawski School of Interviewing. This opened my eyes early to how to read and understand someone’s verbal and non-verbal behavior to help an investigator decide who may be deceptive during an interview. So, to summarize all my employment experience mentioned above, it has taught me that facts and how an investigator approaches the suspect(s) and potential witnesses are basically the same in order to get to the truth and resolution of cases.
How has your background in criminology and psychology shaped the way you approach investigative interviews?
My background in criminology and psychology also shaped the way I approach an investigative interview. The investigator must spend most of their time listening to the individual interviewee. Too often, investigators want to do most of the talking during an interview, which leads to many verbal and/or non-verbal cues being missed by the investigator. By listening first, a guilty person will give themselves away by their non-verbal actions.
For example, I interviewed a person whom I suspected was responsible for a cash shortage that the business had suffered. As she began wringing her hands during certain questions, I decided to be direct at that point by saying, “Is this the first time you did this?” The person hung her head, took a deep breath, exhaled, and replied, “Yes.” My next question was, “Where is the money?” “Is it still at home?” She replied, “Yes, it’s in my dresser drawer at home. I can bring it back to you.” I would never have obtained the verbal and written confession had I been doing all the talking, as I would have missed the non-verbal activity the person displayed. By the way, this person did go home and brought all of the stolen funds back I have had no experience in law enforcement, so I never had to use an approach like a police detective probably would have as if he/she was interviewing a violent offender.
What changes have you seen in the way businesses experience and detect fraud over the years?
Changes have occurred over the years in the way businesses experience and can detect fraud. I can recall an investigator having to dig through paperwork, various documents, travel to the local courthouses and police departments, and so on, to obtain hard copies of evidence to use in resolving cases. Since the internet was introduced primarily during the mid-1990’s through the present, all kinds of information can be obtained on a laptop, cell phone, iPad, etc., from various websites, social media, and other online sources to obtain factual information.
Even criminals have become more savvy, as identity theft, fraud, scams, money laundering, and a whole host of other crimes are done over a computer/the internet. It used to be back in the 1970’s and 1980’s that financial crimes were conducted through business paperwork documentation manipulation. Large-dollar thefts were rampant through bank robberies. The shift now is that criminals find it more possible to commit crimes online to obtain fraudulent identities and illicit funds from the comfort of wherever they’re at, using computers, cell phones, computer software, etc. From paperwork research in person, hands-on observation such as the use of binoculars back in the day, to being able to obtain information online now to investigate these perpetrators through the use of business-developed applications, software, and hardware, along with the advanced technology that is available today in the form of video cameras and recording devices.
As AI becomes more involved in fraud detection, where do you believe human investigative judgment remains essential?
Now, about AI, it’s becoming more involved in fraud detection. Regarding PI work, this, in many ways, is a terrific aid in researching information for a client. However, due diligence is necessary currently when obtaining this AI information. What is meant by that is that human investigative judgment is necessary. When this type of intelligence is used in investigative cases, a human must verify the information is correct. AI is certainly not perfect, so the investigator has a duty and an obligation at this point to verify that what AI provides is correct and factual. As information is determined to not be factual, the investigator must conduct further research to obtain factual information. If what AI provides is shown by further investigative efforts by the investigator to not be substantiated, then that information must not be reported in any format to a client.
AI is beneficial, in my experience to this point, to create investigative documents in professional formats with all the facts provided. The investigative reports I’ve found are very professionally written, and after briefly reviewing the report to ensure accuracy, they save an investigator a tremendous amount of time.
What early warning signs of fraud do business owners most often overlook?
Let’s now discuss warning signs of fraud that business owners most often overlook. Businesses often overlook early warning signs of internal fraud because the indicators initially appear to be ordinary employee behavior, minor accounting discrepancies, or routine operational problems. One of the biggest mistakes businesses make is assuming fraud will be discovered through an accounting audit. Employee behavior, unusual transactions and weaknesses in internal controls often provide warning signs long before substantial financial losses are discovered. To summarize, opportunity is the key word here.
Here are some commonly overlooked warning signs of workplace fraud that business owners, managers and private investigators should recognize:
Employees who refuse to take vacations: An employee consistently refuses vacation time or insists that nobody else perform their duties. They volunteer to work overtime and appear super-loyal to the upper management. Here, review whether the employee keeps exclusive control over financial transactions, inventory or vendor relationships. There must be a check and balance system in place in the business.
Employees who live beyond their means: An employee suddenly buys an expensive vehicle, takes an extravagant vacation or displays a lifestyle seeming inconsistent with their known income. Here, look for corroborating financial or transaction irregularities rather than treating lifestyle changes as proof of wrongdoing.
Unexplained inventory shortages: Inventory counts repeatedly fail to match recorded quantities. Here, compare shortages against employee schedules, shift changes, receiving records and inventory adjustments.
Employees who are overly protective of their responsibilities: An employee becomes defensive when questioned about procedures, refuses assistance or discourages management oversight. Here, decide whether the employee controls multiple stages of a transaction(s) without independent review.
Unusual vendor relationships: An employee consistently recommends the same vendor, approves questionable invoices or resists competitive bidding. Here, review vendor ownership information, payment histories, invoice patterns and possible undisclosed relationships.
Frequent cash register and/or deposit discrepancies: Cash shortages, delayed bank deposits, excessive voids or unexplained refunds occurring repeatedly. Here, compare point-of-sale records, deposit documentation, surveillance footage (if present) and employee shift assignments.
This list is certainly not all-inclusive but appears to be the most common signs I’ve come across in my private investigation experiences.
When a company suspects internal fraud, what should its leadership do before launching an investigation?
When a company suspects internal fraud, business leadership must take certain steps before immediately launching a formal investigation:
Leadership must remain discreet by avoiding discussing suspicions openly or confronting suspected employees prematurely. Confidentiality helps prevent evidence destruction and unnecessary workplace disruption.
Secure relevant financial records, emails, surveillance footage, transaction histories and electronic data before it can be altered or deleted.
Assess the credibility of available information to help identify suspicious activities, potential financial losses and the individual involved.
Determine potential legal implications, employee rights, confidentiality requirements and proper investigative procedures by consulting with the company’s legal counsel initially.
Limit access to sensitive information to individuals with a legitimate need to know. Consider temporary adjustments to financial controls and system permissions.
Engage an independent qualified investigator or forensic accountant to conduct an objective, confidential investigation.
Establish an investigation plan by defining the investigation’s objective, scope, reporting procedures and evidence-handling requirements.
To summarize, leadership must avoid accusations based solely on suspicion. Remember, suspect carefully, investigate professionally and let the evidence show the facts.
How do you remain objective when an investigation begins with strong suspicions but limited evidence?
There were times when I was brought into an investigation that had strong suspicions but limited evidence. The key is to remain objective. When this occurs, the investigator must remain impartial, disciplined and focused on only showing facts rather than confirming assumptions. If an investigator gets caught up in confirming assumptions, it will lead them down what we call, in PI work, “rabbit holes”.
Therefore, the investigator must separate facts from suspicions. They must avoid confirmation bias and actively seek evidence that both supports and contradicts the initial allegations. Another is to follow the evidence. Allow investigative findings to decide the direction of the investigation rather than getting “caught up” in a predetermined conclusion. The investigator must also realize that suspicious behavior may have legitimate explanations unrelated to misconduct.
The main idea is to document everything, including observations, interviews, evidence and investigative decisions based on facts. The investigator also must remain professionally detached by not allowing individual opinions, emotions or client expectations to influence investigative findings. All findings should be reported impartially by distinguishing established facts from inferences and presenting factual conclusions. An investigator’s responsibility is not to prove that someone committed wrongdoing, but to determine what actually occurred. Professional integrity requires pursuing the truth, not validating accusations.
After decades of investigating fraud and misconduct, what is the most important lesson you would share with business leaders about protecting their organizations?
After decades of investigating fraud and misconduct, I feel the most important lesson to share with all the business leaders out there about protecting organizations is that protection requires proactive prevention, not simply reacting when something goes wrong. Fraud, employee theft, misconduct and security breaches often begin with small warning signs that are overlooked or ignored.
Business leaders should set up strong internal controls, encourage employee accountability, conduct periodic audits and create a workplace culture where suspicious activities can be reported without fear of retaliation. Be aware that trust is not a substitute for verification. Long-term, highly trusted employees should be subject to reasonable oversight and established business procedures. When concerns arise, management should respond promptly, discreetly and objectively to ensure decisions are based on facts rather than assumptions.
Always remember: The best investigation is often the one that never becomes necessary because effective preventative measures were already in place. Trust your people, verify your processes and never ignore the warning signs.
Read more from Jerry Buchleitner
