Jamming with Jason E162: When to Get Help in Fraud Investigations with Guido Van Drunen

A man who has been on both sides of the fence, as well sitting on the fence itself when it comes to fraud investigation, Guido Van Drunen has a great wealth of experience with plenty of information to share in today’s episode!


From running investigations in South Africa, Madagascar, Greece, United States, The EU and more we cover a vast list of mistakes to avoid and tips to use while running your own fraud investigations.

Listen in at: http://www.jasonmefford.com/jammingwithjason/

Transcript

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Jason Mefford: hey everybody, I have a very exciting discussion today i’m with Guido van Ronan.

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Jason Mefford: And we’re going to be talking a little bit about fraud forensic investigations and gado is one of those guys it’s been on both sides of the fence here.

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Jason Mefford: And so we’re going to get in and we’re going to talk about some of the kind of some of the mistakes that sometimes people make and how to avoid those so that these investigations go exactly the way they need to so with that we’re going to get into it right now.

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Jason Mefford: hey Jason how are you.

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Guido van Drunen: i’m good.

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Guido van Drunen: hey well, you said you said, both sides of the fence, I even sat on the middle of the fence so you’ve been on the middle.

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Guido van Drunen: Center as well, so just so you know.

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Jason Mefford: And while usually sitting on the fence is not a good thing i’m sure it’s.

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been.

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Jason Mefford: I love that we’re gonna have fun today too so yeah well you know, maybe just for people that don’t know you because you do you’ve had some great experience you’ve seen a lot of the different sides of this.

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Jason Mefford: which I think provides a great context for people to be able to understand how to do this because you know as you and I have talked sometimes very well meaning people just screw stuff up.

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Jason Mefford: And, and so you know we’ll we’ll try to go through talk about some of the good things the bad things and just kind of help people so that they don’t have investigations that goes sideways on them which which sometimes happens so.

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Guido van Drunen: yeah happy to help and just by way of background, I mean I retired about a month and a half ago i’m still finding my feet on that front.

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Guido van Drunen: Before that I was with KPMG as a partner with KPMG and their friends it’s practice and before that I worked in industry.

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Guido van Drunen: Where I helped a fortune 50 companies that have been global investigations group and work very closely with all aspects throughout the organization, you know investigating fraud and financial waste and abuse and before that I was in law enforcement.

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Guido van Drunen: You know I worked in the customs department in the Netherlands, and then I worked in the criminal investigation branch in New Zealand, for a number of years i’ve been fortunate enough to do investigations on every single continent, except Antarctica and I I did get close once.

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Jason Mefford: A debate if we go down there for something, yes, but, but you know operation deep freeze was not necessarily.

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Guido van Drunen: Something that took place so i’m happy to share anything that would.

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Guido van Drunen: You know, further help our internal audit brethren you know enhance their practice what they do and anything that can keep people out of trouble and prevent them from making some of the mistakes that i’ve made over the years, you know, this is all about sharing yeah.

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Jason Mefford: Well, and I love that you do have that background you’ve got the law enforcement background, which again.

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Jason Mefford: Some of the people in forensics and to some don’t brides but, but again having That gives you a different context, a different feel for it.

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Jason Mefford: You know you’ve been you know from the from the consulting or the the outside external party standpoint.

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Jason Mefford: But like you said you also helped a fortune 50 company set everything up and do stuff and so, so you understand to you know.

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Jason Mefford: Again, whether whether internal audit is responsible for investigations or not right and we’ll talk a little bit about that because there’s there’s kind of some differences there, but how can they work good with.

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Jason Mefford: These other groups of experts, whether their internal or external as well right so so maybe we can maybe we can kind of go there first and then, and then we can get into some of the things that.

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Jason Mefford: That are some of those things to just be careful of right yeah at the end, so I know I know, for example, you know when you when you set up.

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Jason Mefford: The forensic group there at the fortune 50 company right, I was trying to remember where you guys separate you guys were separate from internal audit I figured.

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Guido van Drunen: Well, I had a I had a direct reporting line to the to the VP of internal audit.

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Guido van Drunen: But we were a separate group separate p&l.

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Guido van Drunen: And I had my own separate team, for a variety of different reasons right one is you know internal audit skill sets and forensic skill sets while they overlap are still a little bit different.

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Guido van Drunen: You know and and some people don’t like to do this kind of forensic or investigative work and some people thrive on it so that’s one area The other thing is, is that you know a lot of the information that we dealt with was you know it related to.

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Guido van Drunen: Patents or or trade secrets or related to some very sensitive matters that.

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Guido van Drunen: You know, could cause the company some significant issues and you don’t want that to be just part of the internal audit server network.

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Guido van Drunen: that everybody has access to it, and then there was privileged concerns which we can talk a little bit about later on, as well, so, on the one hand.

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Guido van Drunen: I had the support and full support of the internal audit group the CFO etc, but on the other hand, we you know you have to wall that off in relation to some of the things that you’re working on, simply because of confidentiality.

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Jason Mefford: and publications well and I think that’s great that’s that’s a good point because you know again everybody that’s listening is going to be in a different situation right some people it’s going to be.

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Jason Mefford: included more integrated under internal audit some it’s going to be a completely separate function might report it through general counsel instead of internal audit.

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Jason Mefford: But but but I like what you did there too, because even though you’ve reported up through internal audit.

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Jason Mefford: You had a separate group so you keep those conferences right which is important, but I think the other thing too that I always tried to do you know when I was working is.

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Jason Mefford: I didn’t want people in the business wondering what was happening when somebody showed up right so so, for example, you know if you show up then it’s like hey we’re doing this station.

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Guido van Drunen: Right.

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Jason Mefford: If somebody from the audit team shows up hey we’re doing an internal lot.

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Jason Mefford: In so having kind of a difference in the group’s helps so that as well, the business kind of knows what to expect when you show up.

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Guido van Drunen: It helps internal audit as well right because, as you rightly point out it’s like Oh, this is internal audit it’s not an investigation and where you can start to sweat right.

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Guido van Drunen: And so, so that that’s that’s a helpful component, as well the other The other thing is, is that you know there’s not really a right way or wrong way as to where you put.

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Guido van Drunen: This particular designated skill set.

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Guido van Drunen: You know i’ve seen it housed in the physical security group i’ve seen it housed in the ethics and compliance group i’ve seen it housed under internal audit.

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Guido van Drunen: The key thing here, though, is is that you have to be careful that you don’t ever get into the situation where you become the judge, jury and executioner and and that’s that’s something that you know I mean if you look at it from a.

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Guido van Drunen: Law enforcement perspective, I mean you know you generally see okay you’ve got the police department here and then you’ve got the prosecutor here.

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Guido van Drunen: you’ve got the you know the FBI here you got the DOJ here.

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Guido van Drunen: Right so so the one is the investigative arm and the other is the arm that decides whether or not this goes ahead and and you know they work closely together, clearly, but you know clearly, you have to be guided by the facts right and and quite often when we’re doing investigations.

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Guido van Drunen: You know, it can be hard to maintain a very neutral approach, but you know it’s at your own risk if you ignore exculpatory evidence right.

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Guido van Drunen: You know and and so you know it’s.

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Guido van Drunen: We are the people that gather the facts and we report on the facts and they could be good bad or indifferent, but, but you can’t just say well you know.

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Guido van Drunen: I think we got to get rid of Fred so let’s just find everything negative and ignore everything else that he did and sweep that under the rug and then just come up with a an answer, I mean you have to be.

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Guido van Drunen: impartial unbiased and and, frankly, you know your reporting needs to be able to stand the scrutiny of both people within the organization and external the organization, it needs to be unbiased it needs to be factual.

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Jason Mefford: yeah well, I think that that point that you made you don’t want to be the judge the jury and executioner right Those are all different roles.

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Jason Mefford: And so again like you said every organization is probably going to be a little different as to where these people report.

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Jason Mefford: But that’s why usually there’s some I usually call it like an adjudication matrix or some some way of.

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Jason Mefford: Others in the organization kind of validating confirming yep, this is the way that we need to go as well right so so a lot of times like at one at one of my companies that was HR legal and internal audit right and so.

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Jason Mefford: All three of us were working closely together Okay, this is something that HR needs to investigate nope This is something that internal audits going to investigate right.

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Jason Mefford: And so you assign that investigation out, but then you report and you come back to that group and say Okay, this is what we found.

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Jason Mefford: What do you think we need to do next Okay, now we need to bump up up up up above right because you don’t want one person kind of doing or making all of those decisions right.

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Guido van Drunen: You know it’s interesting, you say that I mean I can give you an example in South Africa, and this is, many years ago I don’t know if this if this methodology still applies or not, but if people were Unionized and some of the more.

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Guido van Drunen: Then you know as the investigator, you are required to go into what they call a tribunal.

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Guido van Drunen: And they would have you know the plant management sitting there, they would have the.

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Guido van Drunen: You know, for one of a better word, the person who has been.

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Guido van Drunen: alleged to have done something wrong sitting sitting there you would go in present what you found present your facts and give them your report and then you were out of there.

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Guido van Drunen: And then later on, you would hear what the Tribunal had decided from a human perspective as to whether or not.

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Guido van Drunen: The person stayed or went or what the disciplinary action was going to be and and so that’s maybe an extreme example, but that that shows you how they they actually you know, try to prevent the the investigator from pushing their Barrow for one of a better word.

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Jason Mefford: Well that’s a great way to think about it too right because, again, you know and that’s maybe something for us to keep in mind too is.

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Jason Mefford: we’re not the one who’s going to be the judge or the executioner right we’re just kind of we’re.

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Jason Mefford: investigating we’re providing the information right then it’s usually up to like you said a tribunal, maybe it’s up to senior management, maybe it’s up to the board depending on your organization right.

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Jason Mefford: Exactly is going to be different, and I know I know that kind of that was the case you know with me several times like I remember one of them that we did that you know we reported back to the CEO and the CEO said okay those two people are gone.

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Jason Mefford: that’s my decision we’re going to fire him right, and so I got to be the messenger to go back to these people’s you know bosses and say.

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Jason Mefford: You know, we just found this CEO says they got to be fired oh no, no, no, no, we can’t do that we can’t do that you’re you’re blowing this out of proportion i’m like.

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Jason Mefford: What the CEO said well i’m not gonna do that.

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Guido van Drunen: There are top sales people we can’t get rid of them that was exactly who it was right so so one of them, they had just been.

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Jason Mefford: promoted to a new position we just made all of these public announcements about it and.

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Jason Mefford: And so that was the thing no i’m not going to fire this person so.

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Jason Mefford: Again, not my call not my call, so I just went back to the CEO and said hey I just talked to this VP, and this is what he said.

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Jason Mefford: CEO said don’t worry i’m on the corporate jet with him this afternoon before we land, it will be taken care of right because, again, it wasn’t I was just reporting on what we found it was up to the CEO to decide what was going to happen.

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Right.

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Guido van Drunen: And and that’s where that whole tone at the top thing is is always so important right because it’s not just the tone at the top, because.

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Guido van Drunen: it’s also the Tongue from the top, that matters right, I mean, how do you know what’s at the top actually goes, all the way down to the bowels of the organization right and it’s that that’s always the hard part right and and you know the The thing is.

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Guido van Drunen: You know, and particularly from an investigator’s perspective.

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Guido van Drunen: If you do a good job investigating something you provide all the facts and everything like that everybody’s going to forget what you did in about two weeks, and you know attaboy onwards, but if you make a mistake.

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Jason Mefford: they’re going to remember that for.

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Guido van Drunen: That that does not go away and that’s something you’ve got to be very, very careful of because it can impact your career, it can impact somebody else’s career.

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Guido van Drunen: And look we’re all going to make mistakes, the question is, is how do we mitigate that risk and how do we, how do we minimize the impact of that.

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Guido van Drunen: And and, frankly, you know in today’s environment what what i’m seeing more and more of is that you know investigations are not just done by one.

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Guido van Drunen: set of skills, I mean you need to have multi disciplinary skills, I mean there’s a there’s a legal component there’s an HR component, there is a physical security component, there is a.

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Guido van Drunen: An it component and and that’s just you know just shaking those out and and at some point in time, you know if you’re doing IP.

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Guido van Drunen: theft work or something like that you’re going to need somebody who’s skilled in the IP space to support you right so nobody can know everything.

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Guido van Drunen: So you’re going to have to be able to have those trusted relationships that you can bring into certain situations to help you get to the endpoint.

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Guido van Drunen: And, and frankly.

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Guido van Drunen: You know not utilizing that skill set can can let you create all kinds of problems right so suppose suppose you go and full steam ahead and do the interview, and this that and the other in the physical security team doesn’t know and the guy goes postal and you’re.

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Guido van Drunen: Right you’re in trouble right, so you know you have to coordinate at the same time, you know it shouldn’t be a free for all that every man and his dog is involved with looking at what Fred Smith did right.

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Guido van Drunen: So there’s there’s this balance, this whole yin and Yang that you have to go through.

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Jason Mefford: Well, and that’s why it seems like you know again in my experience that’s why i’ll just see if it’s your experience, too, but you know, the fact is we can’t.

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Jason Mefford: We can’t necessarily anticipate everything right because you don’t know, especially when you start investigating so you don’t know where it’s going to end up going right there’s twists and turns.

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Jason Mefford: Throughout the whole thing but, but we do need to kind of have some ground rules set up in advance right, so that we know.

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Jason Mefford: Okay, you know we’ve got to have the relationships with these other groups, whether that be internal or external resources that we might need.

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Jason Mefford: And so, then, as we get into it, then we can start making those decisions and kind of follow that Protocol that’s been set up beforehand right, I mean to me that that’s that’s.

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Jason Mefford: One of the more important things, because it has that consistency to it right to make sure that is because what you don’t want.

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Jason Mefford: is to do investigations in an ad hoc manner and then have people afterwards come back and Sue you for discriminatory, you know termination or other stuff like that, because you didn’t.

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Guido van Drunen: follow.

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Jason Mefford: What you normally supposed to do right.

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Guido van Drunen: So I would I would.

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Guido van Drunen: First of all, I wholeheartedly agree what I what I see and what i’ve seen more and more of is two things one is.

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Guido van Drunen: Most organizations now have some kind of you know, the larger fortune fortune 500.

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Guido van Drunen: Have what they would call an investigative.

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Guido van Drunen: process right okay if if X happens break glass take out my little sheet and go through the little steps that I have to go through to determine what I need to do.

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Guido van Drunen: So that’s that’s the process side of it, and I think that’s that’s that’s very, very important.

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Guido van Drunen: Now we shouldn’t necessarily you know, become a slave to the process right, I mean i’ve i’ve trained, a lot of investigators and you know it’s like do you have any children know what are their ages right, I mean you’ve gotta.

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Jason Mefford: skip The next question right right right you shouldn’t just go down the list right so that’s one.

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Guido van Drunen: The other thing that I think is is becoming more prevalent, is what I call it, you know i’ve heard it called a variety of different things, but it’s called an investigator code of conduct.

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Guido van Drunen: And, and what they do with, that is, they kind of say okay.

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Guido van Drunen: From an investigative perspective and an organizational perspective, what are we allowing our investigators to do right, you know, for, for example.

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Guido van Drunen: You know 1520 years ago people will just go and do pre text calls right that that’s that’s just not on anymore right that’s that’s a no, no, it shouldn’t be done.

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Jason Mefford: Can you just explain that that concept to.

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Guido van Drunen: Two people.

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Jason Mefford: Of what that actually is.

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Guido van Drunen: yeah you pretend that you’re somebody that you’re not and you have a pretext for calling somebody to get information that you’re really not entitled to have.

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Guido van Drunen: Right, and so you know it, you call them on a pretext, which is you know pie in the sky reached up and and and then try to get information out of them, that you would normally not be able to get right so.

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Jason Mefford: So there’s no secondly you’re tricking the person into telling you stuff because you’re misrepresenting yourself right.

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Guido van Drunen: Right and that’s that’s not it, you know so there’s that you know the other thing is and and you know people will say well this doesn’t happen Well frankly it has happened, where you know you can’t say well we’re going to interview you and you’re not leaving here until you tell us everything.

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Jason Mefford: And, like all the TV shows right.

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Jason Mefford: shine the light on them, you know and and and and guys, you know you can’t that’s.

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Guido van Drunen: You know that’s imprisonment.

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Guido van Drunen: You can’t do that and and and it’s really interesting because you know people always say, well, law enforcement, has all this power and i’m like.

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Guido van Drunen: Actually, as a corporate investigator, you have as much, if not more, I you know look if if you don’t want to cooperate with me on this inquiry that’s fine I can’t make you cooperate.

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Guido van Drunen: You know you’re free to leave whenever you want, but I do have to report back that.

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Guido van Drunen: You know what the findings of my investigation or and if you refuse to cooperate, the Code of Conduct says.

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Guido van Drunen: That, if you don’t cooperate with a corporate investigation, there could be serious ramifications, up to and including termination.

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Guido van Drunen: Right and that’s that’s a much bigger stick and somebody saying i’m going to give you a search warrant you know I mean you’re playing with somebody’s livelihood here.

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Guido van Drunen: And, and so that’s that’s pretty significant and so you know the incentive and I would say 98% of the cases that i’ve worked on people have been extremely cooperative.

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Guido van Drunen: And and generally if they’re not cooperative senior manager was like well they’re not helping know when we don’t want them here yeah.

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Jason Mefford: yeah cuz there there there tends to be I mean again it’s it’s not innocent until proven guilty, but again in my experience, the people that don’t want to participate.

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Jason Mefford: Or that make it difficult it’s usually because they have something to hide right most most of the people want to want to participate there they’re fine to try to help out.

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Jason Mefford: And so yeah you know again management can say look if they’re not going to cooperate on this, then we’re just not going to have them.

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Guido van Drunen: Well, and you know take that a step further right, I mean if you’re talking about, for example, let’s say an fcp a violation or an eye tar violation and the person doesn’t want to.

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Guido van Drunen: participate and help get to the bottom of it and you have to make a voluntary disclosure to a regulator and say well this guy didn’t really want to help us, but we promoted him anyway, you know.

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Jason Mefford: it’s not going to be good.

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Guido van Drunen: The regulator’s gonna say wait a minute you’ve got a problem here with your compliance program right yeah.

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Guido van Drunen: So you know it’s.

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Guido van Drunen: Most people will will cooperate everybody generally wants to do the right thing.

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Jason Mefford: was good so that’s so that’s a little bit, can you know kind of from from that side, maybe let’s switch gears a little bit, because I know that you know again what I found often is.

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Jason Mefford: Especially in smaller and mid sized companies where you don’t have the benefit of having that internal investigation group, maybe you don’t have a strong.

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Jason Mefford: Internal counsel group right either necessarily a lot of times these responsibilities kind of fall back to internal audit or some group, like that right.

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Jason Mefford: And, and again, you know you look at something like the eyes standards we don’t have to be a fraud expert blah blah blah blah blah We just have to know enough right.

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Jason Mefford: But, but I know you know, sometimes it seems like and i’ve seen this over my career where well meaning people go in, they try to do something, because they’re the only one in town effectively, but they end up doing some things that really kind of jeopardize the whole integrity.

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Jason Mefford: Of the investigation process right.

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Jason Mefford: So, so what are what are some of the things that’s that’s why I wanted to kind of get in with you about.

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Jason Mefford: hey what’s what’s probably Okay, for you to do, but some of the things to just be aware of and know when you need help and when and who to kind of reach out for that help.

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Jason Mefford: Because again like I said i’ve seen so many people kind of get sideways on stuff that you know what can we help them what are they kind of some red flags, if you will, so they don’t go down a path that ends up negatively affecting their career too right.

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Jason Mefford: Right like you said you screw something up you screwed up bad enough.

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Jason Mefford: It comes back to you on your career as well.

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Guido van Drunen: So a couple things one is you know I would.

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Guido van Drunen: If you’re dealing with something that’s going to have regulatory and look if you’re the victim of somebody let’s say somebody stole.

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Guido van Drunen: All the money out of out of the donation jar in the lunch room right, and you know you’re asked to look at the camera see what happened this at any other.

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Guido van Drunen: You know that that’s not going to barring that it’s the CEO you know that’s not going to necessarily make or break the company right.

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Guido van Drunen: But, but if if you’re dealing with something like you know, an fcp a violation and I tar violation or.

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Guido van Drunen: Something that you know, is going to have serious regulatory implications for the organization, you know.

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Guido van Drunen: it’s crucial to have legal involved with that and to have that particular type of investigation.

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Guido van Drunen: What I would say cloaked in privilege right and and for a variety of different reasons, because.

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Guido van Drunen: You want to be able to happen you’re probably going to waive that privilege, when you go make a disclosure to the regulator, but you want to be able to be the organization that controls that decision or not so.

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Guido van Drunen: You know let’s say you start something out as a simple travel travel expense reporting fraud and then you notice that wait a minute he’s taking out cash and he’s giving it to you know the the.

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Guido van Drunen: The map the Madagascar customs official to get his product into the country, you really want to make sure something like that gets cloaked in privilege as quickly as possible.

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Guido van Drunen: So that’s that’s one area, you want to be very careful of because those regulatory implications can be huge.

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Guido van Drunen: Now, whether that’s internal privilege or external privilege that’s something the organization will have to decide, you know.

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Guido van Drunen: In in the EU internal privilege doesn’t exist right if you don’t have external counsel you’re not going to have the benefit of that privilege so again it’s going to depend on where you are what’s going on who’s involved, etc, etc.

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Guido van Drunen: So that’s that’s one aspect.

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Guido van Drunen: You know the other thing is.

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Guido van Drunen: it’s really hard to know what you don’t know and if you’re looking at something.

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Guido van Drunen: You know I mentioned Madagascar, now I think what’s primarily spoken there is French if you’re looking at all the documentation there, and you don’t speak French.

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Guido van Drunen: You know you’re going to go off the rails here, and you need to have somebody who understands what’s going on right so it’s it’s it’s not getting into places.

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Guido van Drunen: You don’t necessarily have to be comfortable with where you are, but you need to be comfortable with the people that are supporting you getting through where you are so language skills, if you don’t have those you better make sure you get them on your team and it can’t be Google translate.

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Guido van Drunen: But you’d be surprised how many people are relying on that.

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Guido van Drunen: Right so that’s that’s another aspect you know the other, the other area, you can get into trouble on, and you know i’m going to use the word forensic.

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Guido van Drunen: And there was a forensic forensic and basically forensic just means to be used in a court of law so you’ve got to look at.

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Guido van Drunen: What you’re doing here and saying at some point, I could be sitting in the witness box here, having to testify about this.

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Guido van Drunen: And can I answer all the questions that people are going to throw at me so you know if you rely on your internal it people to collect your data that you’re going to be using to support what your what your assertions may or may not be.

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Guido van Drunen: You better understand that they know how to forensically collect that data so that they’re not going to be subject to criticism.

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Guido van Drunen: Because if you don’t have a complete set of data, because they didn’t collect it correctly it’s going to be on your head right so so that’s another area where you want to make sure that you’re that you’re covered.

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Guido van Drunen: The other The other area is you know HR is another area of huge risk, I mean, for example in in places like and and again i’m speaking from a long time ago, but.

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Guido van Drunen: You know I can remember, I did some work in relation to a matter in Greece, and we could not terminate anybody in Greece, until we got a criminal conviction, now the criminal conviction process would take two to three years.

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Guido van Drunen: So, you know how do you deal with something like that, from an HR perspective, you know we got to fire this guy was well we can’t.

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Guido van Drunen: You know so you’ve got to understand that in all these jurisdictions are different employment roles and if, for example, whistleblower anonymity does not necessarily exist in.

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Guido van Drunen: Every single jurisdiction right.

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Guido van Drunen: And those are all things that can really impact your investigation.

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Guido van Drunen: And the other thing is, you know we talked a little bit about process, you know if you deviate from the process, you know document document document, I know I know attorneys don’t like.

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Jason Mefford: To document some of this stuff but.

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Guido van Drunen: You know the reason I deviated from this process was because of X and I discussed it with y Z and and G, and they agreed and Council agreed as well and that’s why Council doesn’t like to see that written down.

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Jason Mefford: And they don’t want anything that could be potentially discoverable to.

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Guido van Drunen: Correct right.

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Guido van Drunen: So, so those Those are some of the pitfalls, and then you know some of the things that i’ve seen is you know don’t.

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Guido van Drunen: Look, it can be very, very hard, when you know that the VP of you know, the supply chain doesn’t like this guy.

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Guido van Drunen: Right and and he wants to get rid of him and he’s using this as a lever to get rid of him.

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Guido van Drunen: Now, if the person had maybe he doesn’t like him because he does stuff wrong he just hasn’t been caught, but if he just doesn’t like him don’t be used as management tool to affect something that they should affect through the normal.

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Guido van Drunen: evaluation process and and and feedback process right don’t don’t say well you know what.

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Guido van Drunen: He was laid on his expense report we’re going to dig in and we’re going to fire him that’s that that’s a that’s a management.

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Guido van Drunen: Not following up on there, you know people management responsibilities and don’t.

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Guido van Drunen: You know if if some somebody is doing something wrong either in violation of the Code of Conduct were in violation of some statutory requirement that’s a violation look at it, but if you’re getting if you’re getting into.

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Guido van Drunen: Well, he put his time sheet in light management should be dealing with that.

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Jason Mefford: yeah yes and i’ll let the investigation supplant what management should be doing from a corrective discipline standpoint.

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Guido van Drunen: Correct yeah.

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Jason Mefford: Well, no, and it’s good, so I mean you’ve already kind of thrown out, you know some some good kind of rules of thumb right is if.

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Jason Mefford: hey if you’re coming in, you think there’s going to be some regulatory or governmental impact right like you have to disclose or you may be subject to a finer penalty.

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Jason Mefford: Because of some action that should be triggering the bells in your head to say just a minute, maybe I probably need some extra help with this right.

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Jason Mefford: If you feel like it’s going to end up in court.

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Jason Mefford: Some way right so to where you know, we need to not only just investigate this, but it really needs to be done as a forensic investigation because a lot of what we’re doing.

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Jason Mefford: is going to be used as evidence in court, which again that’s a totally different animal than what we would normally document right for our for a normal audit.

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Jason Mefford: Absolutely, and the things that you’re doing you know those are all kind of different you know the other one that I that I usually kind of think about too is if it’s maybe it doesn’t have a regulatory impact, but if it has a significant reputational impact right like.

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Jason Mefford: Like like i’ll give you an example right, so we had.

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Jason Mefford: Ethics and compliance rolled up under me so the hotline was one of the things that I would I would get copied on right well if.

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Jason Mefford: Not that this ever happened right, but if a complaint comes in, about the CEO.

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Jason Mefford: Even though I am qualified to probably do the investigation there’s no way in hell that i’m going to do that investigation right because it doesn’t matter you know whether the person is completely exonerated or not.

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Jason Mefford: i’m going to be the one that’s going to be on the get have all the fingers pointed out as well right so again I look at it kind of two and i’ll see if this has been your experience but.

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Jason Mefford: If there’s kind of some internal or external political things associated with it, that might be a good time to bring in somebody else as well.

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Guido van Drunen: Right, I think that that cuts both ways as well right I think that’s I think that’s spot on because the other thing is if i’m the CEO.

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Guido van Drunen: And there’s an allegation against me I don’t want somebody that reports, maybe not directly but ultimately reports up to me to say, well, he didn’t do it.

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Guido van Drunen: Because they’re gonna say yeah right it’s your guy right so so you know, frankly, if i’m the CEO and and and somebody calls in the hotline and says, well, I did X, Y and Z.

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Guido van Drunen: And I was drinking and driving on this night this that and the other was like you know what I want somebody independent come and just debunk this because I want to be able to actually.

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Guido van Drunen: Make sure that it’s not something that I end up having to deal with from that perspective if that makes sense.

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Jason Mefford: Well, no it’s good yeah cuz like you said it’s it’s both ways right, I mean the executive should want something external to be done as well right, because if there’s nothing wrong then again the evidence from that should show and again not be influenced.

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Jason Mefford: it’s right more unbiased if it’s coming from somebody outside the organization.

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Guido van Drunen: At absolutely correct and it’s it’s it’s crucial to have that, and you know we get into this independence issue at times to some extent right, I mean you know auditor independence has been what how long has that debate been going on.

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Guido van Drunen: Those Roman times yeah exactly Roman times right and and so you know, in the independent investigations.

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Guido van Drunen: You know, are you hired by the board, are you hired by the company and and so sometimes I step away from the independence issue would you say, is it objective.

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Guido van Drunen: yeah right because you know, is this objective is is what’s been done here, objective and, and you know you can pretty quickly determine whether or not an investigation was thorough and objective or not.

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Guido van Drunen: And you know, one of the things that I think is really hard is for people to recuse themselves from saying you know what I don’t feel like I can do this because i’ve got too much skin in the game here.

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Guido van Drunen: And that’s you know people always try to shoehorn it in there, and you know this comes back to to two key issues that i’ve always identified as one is.

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Guido van Drunen: benchmark drives behavior and do you have alignment of interests, you know as as an investigator working for a big for firm or for a legal firm.

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Guido van Drunen: You know, are your interests necessarily always aligned and and you know I like to think that I did a good job, but I get judged on very different criteria.

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Guido van Drunen: Then, for example, somebody who’s internal right, I mean the people looking over my shoulder saying is he generating enough revenue.

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Guido van Drunen: and doing a quality job in that process, whereas internally that’s a very different metric.

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Guido van Drunen: So you’ve got to keep all that in mind and that’s why I think alignment of interest and benchmark driving behavior always have to be in your mind as to when you’re doing this work or this type of work.

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Jason Mefford: Well, and the interests are aligned that kind of goes back to our judge, jury executioner kind of thing too right so again when you when you think about it, in theory, rather like with law enforcement, the police.

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Jason Mefford: You know, whoever the investigator is in theory right they have nothing to do with the person they don’t you know, unless you’re a small town, you know.

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Jason Mefford: Country sheriff you, you probably don’t know the people that you’re investigating you’re that you’re doing stuff about right which is, which is better because, again, then you’re not.

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Jason Mefford: influenced right as to as to what the facts actually are Oh, you know.

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Jason Mefford: You know, like you said you know, maybe it’s a dui or whatever you know gatos a nice guy john i’m sure he’s i’m sure he’s below point oh wait, we just won’t even give him give him the breathalyzer right, because we know he wouldn’t drive drunk he’s a good guy.

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Jason Mefford: Well, that would not be objective, it would not be necessarily following the investigation protocols and so again that’s when you end up getting in trouble right.

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Guido van Drunen: that’s that’s that’s a really, really, really good point, and you know, one of the things you know we’re all human beings right and and.

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Guido van Drunen: You know what when when when we’re hiring these external law firms on these on these large matters that relate to regulatory issues.

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Guido van Drunen: Everybody seems to be running to hire people well he worked on the Siemens case or he worked on this case where they were fined 500 million, and so you know you have to wonder.

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Guido van Drunen: You know, are these individuals actually looking to have the highest possible find to increase it, you know.

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Jason Mefford: it’s it’s it’s a question you have to ask.

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Jason Mefford: Right yeah.

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Guido van Drunen: Now i’m not suggesting that that’s the case, but that perception could exist right, and you know i’ve seen i’ve seen officers sitting around afterwards saying well what your guy get my guy got seven years, my guy got 10 years.

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Jason Mefford: Right yeah right right, so you know there’s there you know we’re all human beings.

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Guido van Drunen: And we have to be very, very careful, you know it’s it’s it’s like that might not be i’ll tell you right now there is no written benchmark for the DOJ for any law enforcement organization well if you get people to get more than 10 years you get a.

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goal.

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Guido van Drunen: yeah that’s that’s not happening.

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Guido van Drunen: But, but people keep score in their own mind.

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Jason Mefford: Right yeah they do.

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Guido van Drunen: And, and so there’s there’s just this inherent danger that you need to be aware of that, you know it’s like oh i’ve completed 17 cases and I got 17 confessions well okay well congratulations, but how did you get those confessions you know you know it’s, we have to be.

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Guido van Drunen: there’s a reason i’m saying that there should be an investigator code of conduct and a process.

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Guido van Drunen: right there Hello everybody needs guardrails.

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Jason Mefford: Well yeah we do need to guard rails and it’s it’s interesting because, as you as you bring that up right it’s like you know what again at first, maybe you know, the first 15.

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Jason Mefford: confessions you know it’s not a big deal and then all of a sudden somebody goes holy shit I just got 15 confessions.

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Jason Mefford: Next time it comes right it’s like well I gotta get the 16th one ooh I gotta get the 17th one right does our behavior actually change.

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Jason Mefford: As a result, that even though we don’t necessarily think that we’re doing it, but I think this you know this investigative code of conduct is.

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Jason Mefford: Because we’ve seen some of this recently with law enforcement in general right there’s been there’s been some.

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Jason Mefford: atrocious things done in certain jurisdictions other stuff like that now, people are coming back with the effectively an investigative code of conduct trying to change the rules of policing.

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Jason Mefford: As well just to make sure that everything stays fair is transparent, is above board, so that we don’t end up having.

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Jason Mefford: things go sideways it shouldn’t go sideways right.

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Guido van Drunen: Why and and you know look we’re dealing with with human beings, and you know, regardless and i’ve dealt with some.

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Guido van Drunen: Some interesting individuals, shall we say, and you know, regardless they’re they’re still human beings, and you know I I don’t want to go.

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Guido van Drunen: To the level that they’ve gone to to get to where I want to go right, I mean you know what I mean it’s great if you can solve the case.

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Guido van Drunen: But if you’ve got a if you’ve got to jeopardize everything that you’ve ever done to do that, you know you gotta wonder is it is it really worth it, you know what I mean.

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Jason Mefford: Oh, did you as you’re saying that i’m thinking of the show billions I don’t know, did you ever see the show.

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Jason Mefford: Oh man yeah it’s prosecutor, and anyway it’s.

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Jason Mefford: Some of those lines, probably get crossed right during during that show, and probably do sometimes in real life as well right.

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Guido van Drunen: yeah and and it’s look, you know it’s it’s the heat of the moment and and and that’s why you know the good thing is, you know when you’re doing white collar work.

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Guido van Drunen: You know it’s it’s it’s kind of Nice right people call up and they’ll say hey.

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Guido van Drunen: You know somebody called me up once and said Well, this is an emergency and i’m like.

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Guido van Drunen: If it’s an emergency, you should be dialing 911 I mean if it’s urgent I can help you right, but you know emergency i’m not too sure about the you know.

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Guido van Drunen: You know white collar work is important, I mean you know, we need to make sure that our organizations are clean and and and stress free and everything like that, but there’s.

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Guido van Drunen: there’s some pretty bad things going on out there, at the same time, and you know I I would rather that you know the white collar work gets pushed back, maybe a month or two so that somebody can solve a homicide.

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Guido van Drunen: You know.

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Guido van Drunen: As opposed to the other way around, but having said that you know the other thing is, is that if you look at you know if you look at law enforcement at a local level, they do not have the capability to handle fraud, waste and abuse.

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Guido van Drunen: You know even even probably the most despicable of a lot is elder abuse and there’s there’s just not enough resources to deal with that.

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Guido van Drunen: yeah literally isn’t.

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Jason Mefford: Well, and that’s probably a good point to bring up too, because I don’t know what the numbers are currently because I i’ve been kind of out of out of that space for eight to 10 years now.

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Jason Mefford: But I know that was that was another thing that we always had to consider right as you’re as you’re thinking at the beginning Is this something that we turn over to law enforcement, something that we would choose to prosecute right.

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Jason Mefford: Because again here in the US, you have the option to go after people civilly.

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Jason Mefford: As well as criminally depending on the behavior right and so sometimes the organizations have to decide well do we just want to go after the person civilly or do we want to get the criminal conviction and then go after them separately, because usually get more money that way but.

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Jason Mefford: But all of those things to try to consider, but again, like you said.

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Jason Mefford: there’s there’s kind of thresholds and they don’t want to say what they are out loud but.

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Jason Mefford: But like you said is because they’re trying to bout law enforcement trying to balance homicides and other violent crimes with white collar stuff.

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Jason Mefford: But there are usually limits right and so again, if you think you want to turn something over to the FBI.

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Jason Mefford: You got to be talking 10s of millions of dollars before they’re even going to have the bandwidth to look at you even local you know local PD.

295
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Jason Mefford: You know, again it’s probably got to be 50 grand or more before they’re even going to be able to put in any effort, which is unfortunate because there’s a lot of people that know what those thresholds are.

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Jason Mefford: And they they you know victimize people just below the thresholds, knowing that nobody’s written in really come after me.

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Guido van Drunen: So there’s there’s two components that come into that that that I think are really important to your Jason one is.

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Guido van Drunen: Some organizations actually have prosecution guidelines and what they mean by that is that okay if if these things occur.

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Guido van Drunen: Then we are going to give serious consideration to turn this over to law enforcement and the reason they do, that is, they don’t want to just say Okay, well, we prosecuted, the secretary, but we gave the VP of.

300
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Guido van Drunen: finance a pass right, because then you get this whole arbitrary and capricious thing so everybody gets gauged against the same metrics so that’s one The other thing is, if your organization chooses to you know turn matters over to law enforcement.

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Guido van Drunen: Particularly you know, in my experience.

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Guido van Drunen: And this is this is, you know there’s always some friction between the investigators and the attorneys this that and the other the attorneys always want to go straight to the.

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Guido van Drunen: To the prosecutor, because lawyers want to talk to lawyers right.

304
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Guido van Drunen: The way I the way I look at it is, is what you need to do is you need to put together a prosecution file with a bow around it with basically.

305
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Guido van Drunen: You know, on day one, this happened day two and everything cross referenced you bring it over to the police department and they look at that and they say hey, this is a conviction and a clearance rate for me.

306
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Guido van Drunen: i’m going to call this guy up if he wants to come and talk to me that’s great If not, I can carry it over to the prosecutor and he’ll shepherd it through, because it’s going to be one of one of his stats right back to benchmark drives behavior.

307
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Guido van Drunen: And it’s about him having to do all of the work.

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Jason Mefford: Right, which is why you gotta show up with it with a bow around it, because it’s like hey if i’ve got to put in, you know hundreds of hours on this I just don’t have.

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Guido van Drunen: The time it’s not going to happen it’s not going to happen, so if you give them a package with a with a bow around it they’re going to love you.

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Guido van Drunen: And they’re going to and then they’re going to carry it over to the prosecutor’s office and they’re going to push the prosecutor to go after it right, but if you go around the police, and then you later on, you ask them for help, or like kimmy come to me I don’t care if you know.

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Guido van Drunen: So you have you have to those are dynamics, you have to be well aware of right, I mean.

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Guido van Drunen: Sure there’s times, where you want to go to the prosecutor and go directly and you know exceptions prove the rule, but if you get law enforcement on your side, then, then you go through that whole process, like everybody else does it it works nicely yeah.

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Jason Mefford: Well, this is, this has been great stuff I mean I just kind of wanted to.

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Jason Mefford: To summarize, a little bit you know again to make sure, because i’m sure people been listening along and they’re like wow this is really good stuff so let’s.

315
00:44:55.050 –> 00:45:00.000
Jason Mefford: summarize a little bit and then kind of give people some some parting takeaway kind of stuff too right but.

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Jason Mefford: You know, talking about you know, again with investigations fraud forensic type type work, we need to have some sort of process put in place right.

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Jason Mefford: We need to know who the players are we need to have things like this prosecution guidelines.

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Jason Mefford: You know, deciding who who and what you know how how we’re going to do the investigation, whether to do it internally.

319
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Jason Mefford: Externally kind of have some rules of thumb and some some ways of making decisions, because the facts and circumstances of everything, are a little bit different right.

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Jason Mefford: And that’s why you want to get the heads together and go yep okay it it it checks these five boxes, so this is the pathway, we should go down right.

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Jason Mefford: that’s probably you know, probably one of the biggest things to help people, because if you don’t know that if you’re just trying to go Willy nilly on this you’re going to get yourself into trouble.

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Guido van Drunen: I think that’s absolutely correct and i’ll give you one additional tip one thing I would suggest is that you would identify a law firm that’s independent.

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Guido van Drunen: And a forensic accounting firm it’s independent and get them with on what they call an on call arrangement.

324
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Guido van Drunen: Not a retainer doesn’t cost you anything you just say okay look if we have investigative matters we’d like to have you on call to be able to deal with those and locking your rates.

325
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Guido van Drunen: At because you know look if you if you do, that people will say sure we would love to be you know.

326
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Guido van Drunen: On the hook for that, and will you know you get a partner for $400 an hour from an accounting perspective, otherwise they’re going to charge you $700 an hour when the you know the bodies on the gurney and bleeding.

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Jason Mefford: yeah there’s a.

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Jason Mefford: Time negotiate is over at that.

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Guido van Drunen: Right it’s like I need somebody I got to do it, so if you can lock those those those agreements in and just renew them on an annual basis, that if you do have an event.

330
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Guido van Drunen: And you need to call on these people that you’ve already designated the people that are going to be helping you and you’ve designated the rates because look if you spend 1000 hours at $400 an hour or $1,000 hours at $700 an hour.

331
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Guido van Drunen: that’s a.

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Guido van Drunen: that’s a wee bit of a difference yeah and so you know I know i’m splitting my my consultants notes here.

333
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Guido van Drunen: But, but the fact of the matter is is, if you can lock that in ahead of time.

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Guido van Drunen: You know that’s again alignment of interests right align your interest before you start not after.

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Jason Mefford: Well, and that’s such a great point too, because you know you don’t want to lose time.

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Jason Mefford: Either right because, again, most of the time, time is of the essence and investigation, so you don’t want to have to spend a month trying to interview or find.

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Jason Mefford: A law firm or a forensic group to help you you just want to be able to pick up the phone and go hey gado I got a problem, can you be an office tomorrow i’ll briefly on it, you know in that in and let’s get going.

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Guido van Drunen: right that that’s exactly right you want to have your lawyers on call that way you won’t have your forensic accountants forensic it people on call that way as well, and so.

339
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Guido van Drunen: You know, look at that doesn’t mean that you’re not going to have any problems, because every investigation has a problem right, I mean.

340
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Guido van Drunen: You know your job is in coordinating this are running point on this is to make order out of chaos right, and so there will be some problems but.

341
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Guido van Drunen: Look, the last thing you, you know after it’s all over and the dust settles that, why do we pay him that much.

342
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Guido van Drunen: Well, because we had no choice right well couldn’t We have done this before right, and so you know I would suggest you, you know you lock that in with whoever your trusted.

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Guido van Drunen: advisors might be now be very careful, because if you’re also audited, you know by a you know, a big four or or or a second tier firm.

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Guido van Drunen: You know if you’re if you’re doing an investigation and you’re using you know counsel that you always use they’re gonna say well how’s that independent.

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Guido van Drunen: Right, I mean you’re representing you know you know what I mean, so you want to make sure you have independent counsel and it, you know, obviously, your auditors can’t do the investigation right they’re gonna want to know what happened.

346
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Guido van Drunen: But you know they’re going to you know so manage that very, very discreetly and very carefully.

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Jason Mefford: Well yeah because actually to it depends on.

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Jason Mefford: yeah which, again we don’t have time to get down into the rabbit hole but, but the other issue is is around, there is a whole independence check.

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Jason Mefford: You know kind of thing at the beginning, because I worked with when I was at Anderson our forensic group did some work with them.

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Jason Mefford: And, and so again, it was like you know before we could accept a client.

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Jason Mefford: Right, we had to see Okay, what was the what was the who’s who’s the lawsuit against right who’s the client right who’s who’s the opposite side.

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Jason Mefford: Have we represented anybody that could have a conflict with either one of those right, so we had to kind of clear ourselves before we could ever even accept the engagement so like you said, having having a separate group.

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Jason Mefford: That doesn’t do anything for you, except this is going to help reduce that you know.

354
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Jason Mefford: save it as well.

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Guido van Drunen: it’s going to make life a lot easier for you so sorry for interrupting there Jason I know you were kind of summarizing but I thought i’d throw that out there because that’s the.

356
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Guido van Drunen: way you can save a lot of money.

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Jason Mefford: Well, it is that’s that’s that’s a great idea and I didn’t know I knew about the retainer.

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Jason Mefford: I didn’t realize about the on call side of it so that’s a great tip for people, you know you’re not spending every you’re not paying a retainer but you’ve just agreed to an on call kind of thing so everything set up all you got to do is.

359
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Guido van Drunen: Give them a copy of the funding to.

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Jason Mefford: Go yeah that’s great that’s great so we kind of talked about that side and then also you know again kind of from from the internal side, what you know the kinds of things again that, when do you need help.

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Jason Mefford: And, and you know, again I think some of the things we talked about hey if it’s if it’s going to have some potential regulatory or governmental impact, ie you could get fined for this because, maybe you’re.

362
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Jason Mefford: you’re doing something that’s illegal could have a serious reputational risk either in the market or within your industry because maybe it relates to executives right as an example.

363
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Jason Mefford: Or you know again if you feel like whatever the result of the investigation may end up in court, you probably if you got any of those three.

364
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Jason Mefford: You probably don’t want to do it by yourself, you probably want to help bring in at that point, probably external people.

365
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Jason Mefford: To be able to help out because, again, the risk level of That just goes up and you’ve got to make sure that all those i’s are dotted and t’s are crossed when you get into that kind of space.

366
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Guido van Drunen: And that doesn’t mean that you can’t work in tandem with those people right, I mean you know there’s there’s there’s different shades of grey right, I mean you could you could say Okay, we want you to do the whole thing.

367
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Guido van Drunen: We want you to do this part of it and, and you know it’s going to depend on the particular facts and circumstances of the cases to.

368
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Guido van Drunen: Whether or not your information can be relied on it The other thing you’ve got to remember is that being internal to the company, you know how the gears are intertwined and who knows who and what’s where when I come into an organization that i’ve never been in before it’s like.

369
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Guido van Drunen: So where do they keep that information.

370
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Guido van Drunen: And so I gotta go hunt and peck.

371
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Guido van Drunen: But if i’ve got somebody on my team who’s in that organization.

372
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Guido van Drunen: They don’t have to hunt and peck they say Oh, you want that let’s go over here you want that let’s go over here right so.

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Guido van Drunen: So there’s you know you’ve got to find that balance, where you don’t necessarily impact independence objectivity.

374
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Guido van Drunen: To the point of well we’re going to spend an extra million dollars, because we don’t we don’t want anybody else involved right and so that’s that’s kind of a another something you’d have to take under consideration.

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Jason Mefford: yeah it was kind of goes back to again that idea of well who do we need on the team what’s the expertise that we need to we need language skills, do we need maybe some particular regulatory expertise, like a ml do we need.

376
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Jason Mefford: And, and again you’re not going to know until you start getting into it, but if you thought about some of those things beforehand, at least, you have an idea of where you need to go or who you need to assemble to be able to get the right team.

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Guido van Drunen: Apps absolutely correct spot on.

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Jason Mefford: yeah well, this has been great I always love geek out about this stuff and a man, it reminds me of days gone past.

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Jason Mefford: Well, look.

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Guido van Drunen: You know, look i’m happy to deal with you know if you have any questions or anything like that look i’m retired i’m just having.

381
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Jason Mefford: A good time on your hands right i’m just i’m happy to help people out and and and just.

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Guido van Drunen: You know, look it’s worth what my wisdom is worth what you pay for it.

383
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Guido van Drunen: But, but at the end of the day, it’s if.

384
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Guido van Drunen: If I can save people from making mistakes that i’ve made then everybody wins yeah.

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Jason Mefford: Exactly well that’s why I appreciate you coming on and talking about this because, like I said, you and I have seen people make mistakes we’ve made mistakes don’t want them to keep making the same kind of mistakes.

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Guido van Drunen: Right right, I mean looks show me somebody who hasn’t made any mistakes and i’ll show you somebody who’s never done anything.

387
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Guido van Drunen: The problem is, if I keep making the same mistake over and over again.

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Jason Mefford: Then you got a problem.

389
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Guido van Drunen: that’s a different issue.

390
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Guido van Drunen: So that’s a different issue.

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Guido van Drunen: All right.

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Guido van Drunen: Well, I appreciate the opportunity Jason had a lot of fun, thank you.

393
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Jason Mefford: Thank you.

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