Who qualifies as an expert witness? 100 - 150 Words

13 DOCUMENTING AND PRESENTING THE CASE INTRODUCTION This chapter will explain how to pull everything together into a coherent report, and then, using the report, how to prepare a concise flexible filing system that you can use and incorporate into the analytical aids previously discussed. CREATING A SYSTEM In the last few chapters, we introduced the reader to some powerful organization and analysis tools. Their utility, however, is limited by the investigator's ability to quickly and accurately retrieve the underlying facts and data on which they are based. Without the ability to put your hands on the evidence supporting the conclusion, or to identify the witness who will testify for a particular fact, the models are nothing more than elaborate flowcharts. To be effective, they must be related directly to the process of prosecution. The most efficient model in the world will be useless to us if we have to wade through several stacks of paper on our desk in order to find the specific document necessary to prove a particular proposition. We must have ease of retrieval. To achieve this ease of retrieval, we must integrate our organizational system with our analysis tools. The organizational system must fulfill some basic requirements. First, the system must have a direct correlation between the un- 254 Documenting and Presenting the Case 255 derlying data and the models. In other words, we must be able to directly reference each item in our models from our system and vice versa. Second, the system must be easy to implement. With ease of implementation, consistent use of an organization tool becomes more likely. Third, the system must be flexibleit must be able to expand or contract in complexity according to the nature of the case at hand. Rigidity limits the application of the system to only those particular types of cases for which it was originally designed. It is important that the system be just as applicable to drug investigations as it is to financial crime investigations. And fourth, the system must be scalable. Scalability, much like flexibility, allows our system some degree of portability. What flexibility is to various types of cases, scalability is to the size and complexity of cases. Implementation of our system must be as easy for a complicated racketeering scheme as it is for a small employee theft. Keeping these four primary requirements in mind, we have borrowed from the tool-kit of experienced trial lawyers and adapted the casebook system to the investigative arena. THE CASEBOOK SYSTEM Like investigation, trial preparation is fluid, often complicated, and always a time-consuming endeavor. For this reason, lawyers have searched for tools in order to minimize the time necessary to prepare for trial and prosecute a case. Behind this search has always been the principle that coherence must be assembled from chaos, and immediate access to coherent information must be maintained. The transition from trial preparation to prosecution must be seamless. The product of this search is the trial book, sometimes referred to as the casebook.1 The casebook is nothing more than an organizational tool. It is a central repository for everything that is known about your case. From preliminary reports through final disposition, the casebook catalogues and organizes everything in the life cycle of the investigation. It is both the index to, and the body of work resulting from, your ongoing investigative efforts. In practice, the trial book2 is often prepared during the final stage of pretrial preparation. It is often seen as a way to pull everything together into a coherent unit and organize the evidence in a logical way, given the anticipated needs of a trial. As such, it may be introduced relatively late in the life cycle 256 Forensic Accounting and Fraud Investigation for Non-Experts of the case (that is not to say that the experienced litigator ignores the trial book until the last minute, but simply that the book itself is often compiled late in the case). From an investigative standpoint, this approach is inefficient. Instead, initiating the casebook system at the time the initial case report is received will organize your investigation into a much more efficient and focused undertaking. Every investigation could benefit from a greater focus at the outset. If nothing else, beginning your casebook preparation at the outset forces you to examine the case closely and helps identify goals early on. Direct Correlation As we have stated, the first requirement of our organization system is relatedness. In other words, we must have a direct, easily identifiable link between our model and our information. At the heart of this correlative capacity is a robust cross-reference capability. We index and cross-reference everything in the case in a way that allows immediate and intuitive access to it. For example, if a witness appears on our inference chart, it is imperative that the casebook contain an entry that both summarizes the witness's involvement and directs the investigator to additional contributions or followup requirements. Therefore, we must develop a consistent system of indexing and cross-reference. Ease of Implementation From the beginning, the casebook is a filing system. Implementation of the filing system will occur immediately. Once you recognize that your case has the potential to benefit from greater organization, you should establish the casebook as the main source of investigative documentation. Because this method is essentially nothing more than a filing system, implementing it should be fairly straightforward. The most difficult facet of implementation will probably be to discipline oneself constantly to maintain the system. The casebook system does not contain any complicated strategies, nor does it require a lengthy \"learning curve\" in order to comprehend the method behind the madness. Instead, it is quite straightforward and requires no more effort than any other system for maintaining a group of files. Documenting and Presenting the Case 257 Flexibility Flexibility is built into the system. Because it is nothing more than a filing system that is diligently indexed, it may contain any number of different types of evidentiary matter. From a filing and indexing standpoint, there is no material difference between a murder weapon and a canceled check. Both must be indexed, and both qualify as evidentiary items. The only difference is what they tend to proveor disproveand what relevance they may have within our investigative framework. For this reason, the casebook system contains all the flexibility necessary for application to any type case. Whether you are investigating traditional organized crime network activity, or a phantom employee payroll scam, the casebook system will efficiently track and organize all the evidence necessary to plan and complete your investigation. Scalability The casebook system of investigative organization is not a commercial product. Nor is it the brainchild of any particular individual or group. It is really nothing more than the application of a concept to the process of problem solution. In this case, the problem is concise organization of a large mass of evidence and information. Because we are not advocating a particular product or device, scalability is inherent in the method. Our system scales from one defendant to 100 simply by expanding the size and method of file maintenance. There are no additional \"modules\" to buy, nor are there more user licenses to acquire. Simply expand the filing system to include a larger number of participantssuspects, victims, or witnesses. Because the system is merely the implementation of a concept, it is effective on many scales. The casebook system has been used effectively in situations as simple as an indexed notebook and as complex as several filing cabinets. The difference between the two is in volume, not in additional effort to adapt the system. An inherent beauty in the system is its innate ability to grow with the investigation.3 Having said all this, we would like to note that what follows is nothing more than an illustration of the casebook concept. As such, it is no more or less correct than any other filing system that the reader may develop or currently use. In addition, we make no claim as to the originality of the concept, nor do we hope to inspire a revolution in investigative technique. What we do hope to accomplish is to illustrate how the concept can add greater value to the investigative models that are such valuable tools in the 258 Forensic Accounting and Fraud Investigation for Non-Experts investigative arsenal. We encourage the reader to digest the information, reformulate it, and apply it to whichever situation he or she desires. There is nothing particularly special surrounding our method; it is simply something that the test of time has validated. We hope that the reader will also benefit from the insight that clear organization can provide. The Components of the System Typically, a casebook will contain a number of documents and checklists ranging from initial reports to probable-cause affidavits and to-do lists. What you choose to include in your casebook will largely be dictated by the nature of your case, combined with personal preference. Generally speaking, however, every casebook should contain certain basic elements. First, regardless of the scale of your investigation, every casebook should have an actual book. This consists of a three-ring binder ranging in thickness from 1 inch to 3 or more inches, depending on the size of your investigation. In small investigations, the book might in fact comprise the entirety of the system. In larger, more complicated cases, the book will act as the index and cross-reference system between the reports, charts and models, and evidence, logically linking the three. The role of the book is to coordinate those three elements. The casebook, then, will have a many-to-many relationship (to borrow from relational database parlance) between the inference chart and the supporting evidentiary material. In other words, each piece of evidence will point to an entry in the book, which will in turn point to each individual item of proof in the allegation. Exhibit 13.1 illustrates the relational quality between the elements of the allegation, the book, and the supporting evidentiary documents. As you can see, a relationship also exists between the underlying documentation, the book, and the elements of proof in the allegation. In other words, given a specific item of evidentiary support, by using the book it should be possible to locate the proposition it supports in the allegation. The existence of this two-way relationship gives the casebook system its robustness. The book is composed of three sections: administrative, investigative, and evidentiary. The Administrative Section The administrative section contains important documentation about the case itself, such as the underlying legal premise on which the case is based. If the investigation is based on an allegation of racketeering, a restatement of the racketeering law and the elements underlying it Documenting and Presenting the Case 259 Inference Book Docu EXHIBIT 13.1 Relational Quality between Inference Model, Book, and Documentation must be made. By restating the crime alleged in terms of specific elements relative to the actual facts of your case, you can ground the investigation in the reality of the situation. For example, our initial report accuses JoAnn of firstdegree murder in the death of Frank. In most jurisdictions, the essential elements of criminal homicide are act, intent, concurrence, causation, and harm. Therefore, we must prove that JoAnn committed a voluntary act (actus reus), which was coupled with the criminal intent or purpose of killing Frank (mens rea and concurrence), and that her act was both the legal and factual cause of Frank's death (causation), and there was the resulting harm. Additionally, since the state is alleging first-degree murder, they must prove the existence the attendant circumstances or premeditation.4 Your casebook should reflect a restatement of these elements in relation to our particular case. Eventually, this statement, to the extent that your investigation supports it, will become the basis for the probable-cause affidavit and subsequent charges. The administrative section should also contain a synopsis of the facts being alleged in the original complaint. The synopsis should be written based solely on what is being alleged, not on what you believe you can prove. If it were done the other way around, there would be a danger that tunnel vision might occur. In other words, if you limit the synopsis of the facts to what seems easily provable at the time, you will begin to foreclose lines of inquiry and limit your creativity with regard to alternative explanations of factual events. If there is no allegation, perhaps this case is self-initiated based on suspicion of wrongdoing you observed; then create a synopsis of the facts based on 260 Forensic Accounting and Fraud Investigation for Non-Experts what you believe has occurred. You should be mindful that narrowing the field of inquiry too quickly might result in a similarly over-narrow view of the facts, precluding the ability to quickly recognize alternative explanations. In short, this section of the casebook should contain basic documentation of an administrative nature. The Investigative Section The investigative section should contain all paperwork that pertains directly to the investigation. Items such as the original initiating report, all supplemental reports, and all investigative narratives should be filed in this section. This section of the book should also contain a master chronology, which, as noted earlier, is invaluable in clarifying the chain of events under investigation. The chronology is an evolving document that expands as new facts are added and contracts as old facts are eliminated. It is always in flux, and it helps to anchor the event in a reference system that is familiar to us. A detailed list of witnesses will appear in this section. With this portion of the section we begin to realize the full power of the casebook system. Each witness is assigned a unique identifying number, such as W1, and gets his or her own individually tabbed section. Included behind each tab should be the full identification of the witness, including address, phone number, and the full contact information that might be necessary in order to locate the witness quickly. It might also be helpful to include a photograph of the witness, especially in the event the witness suddenly becomes \"difficult to locate,\" and canvassing needs to begin. Then each witness's anticipated testimony should be summarized and included with that witness's entry. This facilitates recall of what each witness can bring to the case. Similarly, an exact listing of each piece of evidence or proposition to which the witness will testify is kept. For example, our medical examiner in the JoAnn and Frank hypothetical, Dr. Jones, would be listed as witness W1, with an attendant summary of her involvement. Following that summary, we would compile a list of propositions that Dr. Jones will be responsible for substantiating. Each entry in this fact list will correspond to an entry on our key list (and subsequently on our inference model). If the witness provides physical evidence, such as a document or other tangible item, that item will be listed here in the witness section, and you will file the item in the evidence section of the casebook. (A detailed explanation of how the evidence section is organized follows this section.) Documenting and Presenting the Case 261 Finally, any unfavorable information about this witness must be included. Information that reflects on the witness's credibility such as prior arrests, previous misconduct, or perhaps inducements to testify is important. By listing this information here, the investigator can assess the potential weight that the witness's testimony can be expected to have on the jury in light of potential defense impeachment. Following the witness portion of the investigative section is a serialized listing of all the evidence collected to this point, with a reference to its location within the inference model. For example, we will list the suicide note in the hypothetical with a corresponding reference to the inference chart. In addition, this item of evidence will have a reference to which witness will authenticate and testify regarding its importance. In this case, the responding officer who discovered the note would testify to its discovery; therefore, his corresponding witness number would appear in the evidence list next to the note. Other witnesses, however, may need to testify regarding this item. Crime lab technicians tested the blood, and handwriting experts analyzed the signature. Although each of those witnesses would have individual documents from which they would testify, they will also testify to the note itself. Therefore, each of these witnesses will also be listed adjacent to the evidentiary item. By using these three portions of the investigative section, the investigator can move seamlessly from model to witness to evidence and back without losing his mind. If we want to understand a proposition in our allegation better, we simply look it up in our allegation section and find out what it stands for, who provided us with the information, and what physical evidence supports it. From here, we can delve further into the system by looking up the witness using the witness number and finding out the entirety of the witness's testimony and all pertinent facts surrounding his involvement.5 Evidentiary Section The last section of the book, the evidentiary section, can take on a number of forms. For smaller cases, it is possible that nothing more than photocopies of papers will comprise the entirety of the section. Conversely, in larger cases, it is possible that this section of the book will itself be an index to folders within a file box or filing cabinet. As evidence is collected, it must be assigned a unique number within the case. Whether the item is a document or a gun, it is imperative that we be able to discretely reference each item by a unique number. 262 Forensic Accounting and Fraud Investigation for Non-Experts There are probably as many acceptable ways of identifying evidentiary items as there are investigators. Whatever system you choose, it may be helpful to include within the numbering system some way of immediately recognizing the tangible quality of the evidence. For example, it could be helpful, from an organizational standpoint, to be able to immediately recognize that the particular item in question is a piece of narcotics evidence as opposed to a document. With that in mind, an alpha character followed by a serial number may be helpful. For example, the alpha character D could be used to designate all documentary evidence such as bank records or other documents. A W might be used to preface the serial number for all weapons, and so forth. The specificity with which you assign prefixes to the serial number is entirely within your discretion, provided you maintain both consistency and uniqueness. Regardless of the method you employ to collect evidence, it is practically worthless unless you can quickly locate it when you need to. This is where the casebook system offers assistance. You identify each item of evidence by serial number. As such, it is filed either in the pages of our casebook or in our supplemental filing system (file boxes or filing cabinet) in either numerical or alphanumerical order, depending on the labeling system you chose. As you proceed through the investigative section of the casebook, locating discrete items of evidence instantly is a simple task. If you examine a node on the inference model or allegation list that points you to a proposition in the key list, the key list will point you to the serial number of the evidentiary item. Working in reverse order, from evidentiary item to casebook, the serial number of the item corresponds to an entry in the investigative section of the casebook. This entry in turn corresponds to both a witness numberame and key list proposition or allegation number. As you can see, working from either end of the system is a simple task because of its robust cross-reference capability. Incorporating Your Numbering System into the Casebook Careful planning and strong organization are important to a successful case conclusion. In the absence of either one, your result will be less than you had hoped. In keeping with this mantra, we have exposed the reader to some powerful concepts for creating an organizational strategy. As we said earlier, what we have introduced and explained are not a series of silver bullets guaranteed to create order from chaos. Instead, they are just what we have purported them to beconcepts. The key ingredient in all the ideas presented here is a reference system and flexibility. Without flexibility you are faced Documenting and Presenting the Case 263 with creating a new system each time the fact pattern you encounter changes slightly from the scenario for which the organizational scheme was designed. Creation is a slow process that is to be avoided unless absolutely necessary. Adaptation is a much better path. With that in mind, we urge you to think about the ideas that we have offered. You are welcome to borrow, discard, or massage any of them into what will be effective for your particular needs. You may use all, some, or none and we encourage you to think critically about what their strengths are and, more importantly, what their limitations are. By understanding the limitations of the systems, you can navigate around them or mitigate them in the planning stages of your investigation. At some point between the initiation of the case, and the conclusion of the prosecution, you will have to present your information. Whether the presentation is to a supervisor, a client, a prosecutor, or ultimately, the jury, it will usually take two formswritten and oral. Written reports will often precede you. Whether you are filing a case, sending an interim update to a supervisor, or briefing a client they will often have the chance to read your written report before you get the chance to explain it. For that reason, your reports must be up to the task. In the next section, we will offer some tips on how to ensure the reporting aspect of your job is successful. REPORT WRITING The task of report writing, especially in the area of investigations, is largely controlled by departmental or client policy. While personal preference does play a role, client and superiors' expectations are often more important. Our experience shows that there are two schools of thought regarding report writing. The first, which we shall refer to as the minimalist school, favors an austere approach advocating sparse detail and brevityall this, it is supposed, in the name of fewer attack points for the lawyers. The second approach, which we refer to as the kitchen-sink approach, comes at the problem from the opposite angle; here one should include every possible detail, leaving out nothing. The reasoning behind this approach is obviously that fading memories require significant bolstering. Which approach is most reasonable? The truth, as usual, probably lies somewhere in between. As a practical matter, an investigative report should include as much significant detail as necessary to accurately document the investigator's actions 264 Forensic Accounting and Fraud Investigation for Non-Experts without being overly burdensome. How much is too much? That is a difficult question to answerespecially in the abstract. It is imperative that your investigation report achieve its goal. It must enable third parties to discern what actions have been taken in a case, and it must help in jogging your memory at some future point in time. Often, this future point in time could be years later. After many years of conducting investigations, the facts of dozens of cases often blend in your mind to form a montage of disjointed images. Culling from that montage the facts during strenuous cross-examination could be a difficult task, leaving you looking rather foolish on the stand. As for the minimalist school of report writing, we think it treads dangerously close to malpractice (if such a thing existed in the investigative context). As the adherents are quick to point out, when there are fewer details in a report a defense attorney will have fewer details to attack during crossexamination. Although the truth of this statement is indisputable, the logic behind it is fallible. First, having the benefit of years of trial testimony and legal education, we can assure the reader that a sufficiently skilled defense attorney can effectively cross-examine an investigator regardless of the detail contained in the report. Second, the lack of detail in the report hinders, not helps, the investigator at trial time. As we stated earlier, trials often occur months, or perhaps years, after the investigative action took place. Given the fact that most investigators have difficulty recalling with total accuracy what they had for breakfast two weeks ago, recalling the minutiae of a criminal investigation after years of intervening cases is an exercise in futility rife with inaccuracy. This inaccuracy will come across during testimony as either deception or ineptitude, qualities neither of which juries find particularly endearing in a witness. At best you will appear to be a buffoon, at worst a liar. We recommend, as you contemplate how detailed you wish to make your report, that you consider two things. First, and foremost, consider the purpose of your job in the big picture. Your task, whether you are a criminal investigator or a civil investigator, is to discover the truth. Sometimes, this duty becomes obscured by the rhetoric of the pursuit of the bad guys. Whether obscured or not, this is job one. Therefore, accuracy should be the goal of every investigative reportregardless of where the facts point you. Whether your investigation points you in the direction you anticipate (i.e., the suspect is guilty) or in a different direction altogether, the report should re- Documenting and Presenting the Case 265 flect exactly what your inquiry revealed. This ensures that, ultimately, the truth regarding the matter will be known. Second, an often-overlooked caveat for investigators is \"do your job.\" In other words, fulfill your duty in an objective, professional, and thorough manner and you will have nothing major to worry about. Our justice system does not expect absolute perfection. If it did, we would all be in trouble. It expects reasonable perfection. Reasonable perfection sounds like an oxymoron. It is not. It is simply another way of saying that we humans are what we are. We all suffer from the human condition and mistakes are inevitable. Errors and omissions will occur and memories will fail us. It is a fact of life, and defense attorneys will be quick to point out our failings. In fact, the whole premise behind the adversarial justice system is the notion that defense attorneys must seize upon mistakes and attempt to hammer holes in the small chinks that reveal themselves in the armor of our case. The result, at least in theory, is that investigators should strive to minimize the glaring errors and obvious mistakes that tend to insinuate themselves into any investigation. Defense attorneys keep us on our toesthey force us to do our jobs. In truth, it is not the investigator's admission of minor mistakes that loses cases; rather, cases are lost when the defense attorney is able to successfully attack the credibility and veracity of the witness. Nothing is more effective in losing a case than catching an investigator in a fabrication. Whether it's an intentional fabrication resulting from some malicious purpose, or an innocent fabrication that is the result of a faulty memory coupled with shoddy reporting, witness fabricationespecially by professional witnesses like investigatorsinstantly destroys the credibility of the entire prosecution. A habit of scanty reporting leads an investigator to rely too heavily on fragile recall. These powers will inevitably fail, and when they do, human nature urges us to \"fill in the blanks.\" Sometimes the answer is accurate, but more often it is not. Avoid placing yourself in this situation by recording your actions accurately and completely. So, in sum, the clash between Spartan and lavish reporting may be answered by following these two principles. (1) As an investigator, do your job to the best of your ability according to standard accepted procedure and with no shortcuts; and (2) report your investigative activities as accurately as possible, regardless of where the findings leadtruth is the objective, not conviction of the suspect. 266 Forensic Accounting and Fraud Investigation for Non-Experts Within that framework, you should construct the narrative of your investigative report in chronological order, detailing the events of your investigation as they unfold. An investigative report is different from a fact narrative, in that it tells a story. Not just a story of the event, instead it tells the story of your involvement as an investigator. In addition to your written report, someone will probably ask you to provide an oral summation, or perhaps even sworn testimony about your involvement. While testifying in open court can be intimidating, there are certain things that you can do to help reduce the inevitable stress. TESTIFYING AS A FINANCIAL EXPERT Although conducting the investigation is a substantial task in and of itself, it is only part of your responsibility as an investigator. In addition, you must testify to your findings. In many cases, your role as witness will require substantially less time commitment than your role as investigator. In fact, the more time and effort you have expended on creating a strong case, the smaller the probability is that you will end up in court at all. If you do your job as an investigator well, the opposing side will have a much greater incentive to avoid the uncertainty of litigation altogether and will be inclined to accept, or offer, a suitable settlement. Whether this settlement is in the form of a monetary award or a plea bargain, the result is the same pre-trial intervention. From a litigation perspective, the lawyer's job is ultimately to avoid trial. As paradoxical as this might sound in light of customary legal-fee structures, it is in reality the ultimate goal. The reason for this is simple. Regardless of the perceived strength of a case, all lawyers familiar with litigation recognize that, once the case enters the courtroom, the question of win-lose often becomes a game of chance. It was Louis Pasteur who said, \"Chance favors the prepared mind.\" As true as this may be in theory, in practice the element of chance often dictates taking a more predictable course of action.6 Largely uncontrollable variables such as individual juror predisposition, judicial bias, and even the skill and acumen of opposing counsel make all trips before the bar of justice a veritable crapshoot. Therefore, given the opportunity to avoid the uncertainty of trialregardless of personal conviction about the \"righteousness of their cause\"most attorneys will opt for pre-trial set- Documenting and Presenting the Case 267 tlement. The adage about the bird-in-the-hand versus the two-in-the-bush rings true in this context as well. As an investigator, your role in avoiding the cost and uncertainty of trial cannot be overestimated. After all, it is largely based on your efforts that the attorneys will make their decisions regarding fight or flight. Assuming that you have done a thorough job during the investigation, it is imperative that you follow through and finish strong. Finishing strong includes being a prepared and effective witness. In this section, we hope to offer some clarification regarding your role as a witness, both expert and otherwise, that will help you, as investigator, prepare for the \"big show.\" In addition, we hope to offer you some tips that you can incorporate into your investigative routine that will make your role as a witness easier. There are essentially two species of witnesses: the expert and the lay witness. Legally, the distinction between expert and lay witness makes a crucial difference in the role that each may play. Depending on the complexity of your case and the nature of the financial crime, you may find yourself serving as both expert and lay witness. The most significant difference between the two is the nature of the testimony each may render. Generally, a witness's testimony is limited to matters on which he possesses personal knowledge.7 Generally, people may only testify to what they have deduced based on use of their five senseswhat they have witnessed or personally observed. For example, a lay witness would be quite well qualifiedassuming she is competentto testify to the description of a vehicle or the color of the defendant's shirt. The court would not allow her to testify to the defendant's mental state or to give her opinion about his motivation.8 By contrast, expert witnesses may testify to matters outside their personal observation. They may testify to their opinion regarding certain matters that will help the jury determine the ultimate fact in issue. The subject matter to which they may testify is limited to the area in which they have some superior skill, education, or ability. For example, a certified public accountant (CPA) would likely be qualified, based on her education and experience, to testify regarding auditing methods that comprise the Generally Accepted Auditing Standards (GAAS). But it is not likely that she would be qualified to testify regarding the mental state of the defendant at the time he made entries into the accounting records. The role of the lay witness is generally beyond the scope of this book (although a lay witness might learn a lot from reading it). 268 Forensic Accounting and Fraud Investigation for Non-Experts The Role of the Professional Witness Generally Neutrality Primarily, the professional witness must testify from a position of neutrality. It is not your job to influence the jury through emotion: Rather, it is your job to influence the jury through facts. Victims and other eyewitnesses may be used strategically to play upon the heartstrings of the jury. You, however, must appear as a disinterested reporter of facts and results.9 Just as you are responsible for objectivity and truthfulness during the investigation phase, you also have a duty to report, accurately and faithfully, your findings without any personal biases you may have concerning the case at hand. This task may in fact be more difficult than it sounds. As the person who has become intimately familiar with every detail of the case, it is difficult to remain objective and report your conclusions regarding the guilt or innocence of the defendant in a detached and professional manner. Nonetheless, as hard as it may be, the integrity of the justice system requires ityour own personal integrity requires it as well. How can you accomplish this difficult task? At the risk of oversimplifying, we would like you to internalize one thing above all else: Do not make the outcome of the case personal. As veterans of both the investigative and testimonial trenches, we recognize that some cases will make this task nearly impossible. After all, there are just some cases where justice must be done, and the path to justice is clear. Admittedly, in financial crime cases these occasions may be rare. The painfully disfigured victims, the conspicuously absent loved ones, and the heinously evil villains are often only present in the more \"glamorous\") crimes or personal injury torts. However, there will be occasions when you become personally involved during your investigation. Notwithstanding your burning desire to see the defendant behind bars (or lighten his wallet as the case may be), visibly personal concern over the outcome will in the long run damage both your reputation and your ability to offer effective testimony. Leave the zealous advocacy to the attorneys. Education Disinterested neutrality does not necessarily mean disinterested monotony. Financial crime evidence often tends to be highly technical and somewhat complicated. Add to this the fact that debits and credits are not nearly as \"sexy\" as eyewitness testimony about a murder, and you have a recipe for boredom. Be that as it may, it is your job, as a professional witness in financial cases, to capture the attention of the jury. If you do not, your message, and probably your case as well, will be lost. Documenting and Presenting the Case 269 Therefore, it is important to approach your role as a professional witness in financially focused cases as that of a teacher. As such, you must educate the jury about not only the facts of the case, but often the underlying principles behind the investigative analysis. Juries are invariably an admixture of laypersons with varying experiences and skill levels in terms of financial matters. It is not only possible, but also likely, that the level of financial knowledge among the jurors will range from bookkeepers and accountants to those among us who can barely balance a checkbook. For this reason, as you approach your job of testifying, you should be constantly aware of the diversity of your audience. As you prepare and deliver your presentation to the jurors, keep in mind the characteristics of most successful teachers. Keeping those characteristics in mind, you will find not only that your message is well received, but also that you will establish a rapport with your audience. Aside from the practical aspect of preventing boredom and keeping their attention, rapport building offers you the chance to subliminally develop credibility. And, as we all know, credibility is the key to persuasive testimony. Communication As we have said, learning is the product of a teacher's knowledge of the subject matter combined with his ability to communicate his message. Knowledge can be broken down further into two additional components: subject matter knowledge and practical application. You will gain subject matter knowledge by studying the principles and concepts in this text as well as further exploration on your own. Practical application, however, is entirely dependent on your efforts as an investigator. We can offer you a solid foundation in both the principles of accounting as they apply to financial crime investigation and some techniques for effectively pursuing such investigations. We cannot give you facility in your individual case. Practical application is entirely about knowing your individual case. Doctorate-level knowledge of accounting will not help you testify if you do not have a working knowledge of the facts of your case. For that reason, preparation is the key to effectively educating the jury. You must know your case inside and out. Failure to know the intimate details will end up costing you credibility in front of the jury and will ultimately detract from your message. Assuming that you have developed both subject matter knowledge and practical knowledge about the case, we will move on to how you communicate that knowledge to the jury. An effective professional witness is in reality very similar to a professional educatorboth must convey an often complicated and dull subject to 270 Forensic Accounting and Fraud Investigation for Non-Experts a somewhat captive audience. In order to achieve this goal, both must have knowledge of their subject as well as the capacity to translate this subject matter knowledge into learning. As a professional witness, you may find it helpful to recall an educator with whom you are familiar that possesses both traits. If you can visualize how this model of education would convey the subject about which you are speaking, perhaps the process of jury education will become more natural. The Specific Role of the Financial Expert Generally financial experts play two roles in the litigation process. You may find yourself fulfilling one or both of these roles depending on the individual case with which you are involved. These roles are the testimonial and nontestimonial expert. The expert witness plays an important role in many stages of the litigation process. It is helpful when thinking about the role of the expert to view the lawyers and everyone who assists them as members of a litigation team. As the captain of the team, the lawyer generally plans and carries out the offensive (or defensive) strategy in order to reach the goal. But, as with any team, his job is made easier by recruiting other individuals that possess skills in areas of team weakness. No lawyer can be expected to be an expert in all areas. In fact, the only area in which a lawyer may be expected to possess superior knowledge or skill is in the area of litigation. For all other areas, the lawyer must call on outside experts for assistance. The assistance can come in many forms, the most visible being that of a trial witness. However, the expert can play a number of other, nontestimonial roles during the course of a complex case. The Role of the Nontestimonial Expert CASE EVALUATION AND STRATEGY Prior to filing the actual complaint, it may be beneficial for the attorney to consult with an expert in the field to assess both the potential for success and the nature of the complaint.10 Even though the lawyer is the expert in case strategy, his knowledge of the field in which the case falls may limit his ability to plan the course of litigation. An expert's valuable experience in a specialized field such as accounting and fraud can help the lawyer overcome these limitations. Experts assist the lawyer in predicting outcomes, shaping complaints, and testing hypotheses about Documenting and Presenting the Case 271 causation. In addition, the expert's specialized skills can aid in selecting additional helpful witnesses.11 Even though an expert is qualified in a particular area, she may not be qualified within a subspecialty of that area. For example, a financial expert in the area of business loss valuation may not necessarily be competent in the area of stock manipulations or Securities and Exchange Commission (SEC) regulations. As a member of a \"fraternity of experts,\" you will be able to guide the lawyer in the process of selecting additional witnesses for the litigation team and preparing other expert witnesses for trial. EDUCATION Lawyers need to know a little bit about everything, but the depth of their knowledge in specific technical areas is usually limited. Often, they can discover a great deal about a case, or the potential for a case, by consulting with an expert in a tutorial capacity. In this capacity, the expert witness is still an educator. But instead of educating the jury, she is educating the attorney. The expert witness can provide the attorney with a strong working knowledge about the subject matter of the case. In the financial case, lawyers often consult with experts regarding items such as the standard of care for accountants, whether the tenets of generally accepted accounting practice (GAAP) have been followed, and other specific technical issues in the area of finance. EXHIBITS When dealing with complicated issues or large amounts of evidence, it may be helpful to create demonstrative exhibits. These exhibits are merely visual aids that the lawyer can use to help witnesses educate the jury about their version of the case. Graphic summaries of transactions, or visual representations of the flow of money, help the jury grasp the often-convoluted processes or schemes used by the defendant to conceal a theft. The expert can be of great assistance in preparing these exhibits. Regardless of who will be using them to testify, the expert can facilitate their creation by lending her specialized knowledge of the subject matter. Generally, as a nontestimonial expert, a lawyer will call on you to do some of the following: Prepare interrogatories. Identify witnesses and help in preparation of witness lists. Help identify Brady and Jencks material.12 Help prepare witnesses. 272 Forensic Accounting and Fraud Investigation for Non-Experts Help formulate and revise questions/prepare strategy for attack of opposing witness. Create/prepare demonstrative exhibits. The Role of the Testimonial Expert As we intimated earlier, the role of testimonial expert is often the most visible and so is probably the one most people are familiar with. When lawyers speak of a case being \"a battle of the experts,\" they are referring to the fact that both parties will present expert testimony of opposing opinion regarding a pivotal aspect of the case. Some battles focus on causation issues, while others might center solely on damage issues. Either way, a battle of the experts boils down to which party's expert offers the more compelling explanation of the facts. Although we do not wish to downplay the importance of expert assistance in the preparatory area, we will be focusing for the remainder of this chapter on your role as a testimonial experta role that may be broken down into the subcategories of pre-trial testimony and trial testimony. PRE-TRIAL In every trial, the pre-trial process proceeds through what is referred to as a discovery phasethe part of the case where both sides endeavor to learn as much about the opponent's case as possible. To the layperson, the process of discovery is both confusing and a bit intimidating. It is confusing in the sense that providing your opponent with your game plan ahead of time seems to run counter to the notion of adversarial combat. It is intimidating in the sense that many times the opposition uses the discovery process to probe for weaknesses and gauge the most likely spot for an attack. This probing maneuver is usually aggressive and often seems overbearing to the uninitiated witness. As an expert witness, it is important that you understand the need for, and the reasons behind, the process. If you understand it, you may be less intimidated, and as a result you will be a more confident and effective witness. Hopefully, we can dispel any concerns you may have regarding your role and participation in the discovery process. Even though the trial process is basically an adversarial one, the underlying goal is to determine the truth. Therefore, our system of dispute resolution tries to make the battle as even as possible. Our rules are in place to try and ensure that the winner is the winner because he made the best case for his version of the truthnot because he was better at keeping his battle plan a secret. If it were Documenting and Presenting the Case 273 any other way, the attorney more practiced in the art of surprise and ambush would usually win whether or not his case was stronger. For the most part, this is what our modern rules of pre-trial discovery seek to reach. Full disclosure by each side is believed to promote fairness of adjudication on the merits.13 As for the intimidating nature of the discovery process, this is an adversarial system. By definition, one side must win by weakening the opponent. Discoveryespecially deposition practiceis usually the first shot at locating weaknesses and gauging an opponent's overall strategy. Once a weakness has been found, resources can be marshaled to exploit it. Because the lawyer is probing for weakness, the deposition often becomes a very stressful event. This is essentially a chance for opposing counsel to test your mettle and find out if you will be a viable target while on the stand.14 Ultimately, the deposition process is a discovery process. Consequently, the scope of the questions and the manner in which the lawyer may ask them are wildly different from what is seen in the courtroom. There are very few questions that an opposing lawyer cannot ask in the deposition. Even if certain evidence is irrelevant to trial, witnesses in deposition must answer them.15 This greatly expands the scope of the deposition. This is not to say that a deposition is a chaotic situation; it is not. In fact, all state courts and the federal courts have very specific rules governing allowable conduct in the discovery process. These rules cover such issues as when opposing counsel must produce information about their case, what must be produced, when and by whom depositions may be takenand retaken in some casesand penalties for slow or uncooperative behavior. Although each state's rules of procedure differ slightly, most are patterned after the Federal Rules of Civil Procedure. There are also rules governing pre-trial discovery in the criminal system. Although they are similar and seek to achieve the same goal, the different nature of the criminal process makes discovery rules in that area slightly different from those in the civil arena. Once the pre-trial discovery process concludes and the lawyers have made the decision to go to trial, your role as the testimonial expert shifts to center stage. However, before you can even get to the witness stand, you must pass a few tests. You must overcome two hurdles when trying to qualify as a testimonial expert; the first centers on the actual field in which the expert wishes to qualify, and the second involves the individual qualifications of the witness. 274 Forensic Accounting and Fraud Investigation for Non-Experts TRIAL: QUALIFYING AS AN EXPERT WITNESS Field Qualification In overcoming the first hurdle, an expert witness may face an attack on the field in which she practices. These challenges to the legitimacy of the field of study, called Daubert challenges after the Supreme Court decision of Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993),16 scrutinize the underlying basis for the scientific principles on which the expert's opinion is based. Daubert challenges are often more difficult than individual qualification. They are an attack on the credibility of the field in which the expert intends to testify. Some have called it a battle between real science and junk science, but the focus is usually on the methods and procedures used in the particular field of endeavor.17 Although rules 702 and 703 of the Federal Rules of Evidence do not explicitly require that the field of endeavor fall within a traditional scientific or technical venue, it is easier to qualify as an expert in those fields (provided the individual qualifications are attained).18 For example, courts universally accept medicine, psychology, and engineering as fields of endeavor from which you can testify as an expert testimony. Conversely, other areas, or highly specialized areas within each recognized area, are open for challenges that are more vigorous. Opposing counsel will often strongly attack areas such as \"new age\" medicine and other holistic forms of treatment through the mechanisms of Daubert because of their less conventional origin and methodologies.19 In general, since the rendition of the Supreme Court's decision in Daubert, the test for admissibility under Rule 702 focuses on the concept of \"scientific knowledge.\" Although the Court refused to elucidate a definitive checklist or test, it did discuss several factors it considered relevant to determining when an area of endeavor was reliable enough to warrant introduction into evidence. The Court intimated that the following factors were pertinent to the inquiry: Whether the theories and techniques employed have been tested Whether the theories have been subjected to peer review and publication Whether the techniques employed have a known error rate Whether they are subject to standards governing their application Whether the theories and techniques enjoy widespread acceptance Further, the Court made it clear that, far from a checklist, the procedure must be a flexible one that focuses \"solely\" on principles and methodology, not on the conclusions that are generated.20 Documenting and Presenting the Case 275 This definition clearly narrows the field from which expert testimony may derive. However, this should not prove cumbersome for the expert in the area of financial crimes unless the techniques you employ are so far outside the scope of GAAP or GAAS that they are not within the taxonomy of the science. For a substantial period following Daubert, there was some confusion regarding its application.21 Some practitioners believed that the application of the Supreme Court's Daubert opinion was limited to decidedly scientific pursuits such as medicine or engineering or accounting, while others argued that all expert testimony was subject to the Daubert challenge. The Court finally answered this question in 1999. In Kumho Tire Co v. Carmichael 526 U.S. 137 (1999), the Supreme Court examined the question of whether a tire expert who based his opinion solely on technical skill and experience, not scientific methodology, was subject to the Daubert challenge.22 The Eleventh Circuit ruled that the Supreme Court's holding applied only to scientific principles and not to other specialized knowledge. However, the Supreme Court granted certiorari and held that Daubert is a doctrine of flexibility that applies to assist the trial court in its gatekeeping function of admitting only relevant evidence in cases of both scientific and technical knowledge as well as areas of other specialized knowledge. Finally, the Supreme Court's position was clearall areas of specialized knowledge are subject to attack under the Daubert principles.23 As we stated, for the expert witness seeking to testify in conventional areas in the financial crime arena, Daubert should be little inconvenience. However, it is important that you remain aware of the burdens that the attorney for whom you work will face when attempting to get you onto the stand. These considerations should help guide your choice of methods and procedures as you go about the task of evaluating or investigating the case at hand. If they do not, your efforts may never see the inside of a courtroom. After surmounting the challenge of field qualification, you must then turn your attention to the process of establishing your individual expert qualification within that field. Individual Qualification A witness may qualify as an expert in a particular field when her knowledge, skill, experience, training, or education, or a combination thereof gives her special knowledge above and beyond that possessed by ordinary members of the public.24 There are no fixed rules regulating how much or what type of experience and education qualifies a 276 Forensic Accounting and Fraud Investigation for Non-Experts witness as an expert. Judges will evaluate each individual case on its own merits, and make the determination of whether the witness qualifies as an expert.25 Usually, expert qualification is based on one or more of the following criteria: Advanced education: bachelor's, master's, or doctorate degree Advanced independent study, including documentation of books read, research conducted, and journals read Extensive personal experience such as derived from years in a specialized field like: Law enforcement Fire science Authorship in refereed or respected books and journals Recognition within a particular industry Professional certification or designation: CPA CFE26 As an expert, or potential expert witness, it is incumbent upon you to maintain an accurate and thorough resume. Your resume should reflect both professional accomplishments and independent learning pursuits in the area for which you wish to be qualified. In addition, you must maintain both a listing and a copy of all articles, books, and papers that you have written, both published and unpublished. In particular, you should also remain aware of any papers or articles that you have written that might advocate a position adverse to that which you anticipate rendering in court.27 It is imperative that you maintain currency in all areas related to your area of expertise. You can accomplish this by frequently reading the most relevant journals and scholarly publications in your field. For the financial witness, this includes such publications as The Journal of Forensic Accounting, The CPA Journal, Practical Accountant, The Journal of Accounting, The Journal of Accountancy, and many others. Maintaining currency will help to ensure that your opinion (once you are qualified to render it) is not easily discredited by more current research in the field. Not only is testifying to outdated information a serious blow to credibility, but it is a personally embarrassing situation. Documenting and Presenting the Case 277 The Art of Testifying Experts often present highly technical information to nontechnical individuals. It is your job, besides testifying truthfully, to help the attorney explain things to the jurors and the judge. General Points There is an overabundance of literature dedicated to the topic of \"how to testify,\" so we will not add to the glut of information by adding our own list of the \"top ten\" keys to testifying. In addition, we will not overburden the reader any more than necessary with discussions of how to behave or how not to react. More eloquent texts are currently available that do far more justice to that area of discussion than we could hope to in a single chapter. Instead, we would like to offer a set of principles as guidance. These principles fall generally into three categoriesdemeanor, appearance, and performanceand are really what amounts to common sense. Moreover, as most of us have discovered through years of real-life experiences, common sense is anything but. That is why we will concentrate on effective witness testimony. DEMEANOR Demeanor refers to how you relate to the jury. Along with aspects such as presenting a professional approach and conveying a sense of an appropriate seriousness regarding the situation, demeanor includes treating the jury with respect. Although your education and experience in the subject matter is likely superior to that of the jury, it is imperative that you avoid conveying a sense of superiority. This advice may sound very basic, but it is startling how easily professional witnesses forget to treat the jury as equals. If you talk down to the jury, or treat them as though the concepts that you are discussing are well beyond their comprehension, you risk alienating them. No one likes to feel alienated, and doing so will prevent you from being as effective a witness as you have the potential to be. Even though the subject you are discussing, whether it is net worth analysis or link matrix analysis, may be somewhat complex, the concepts are obviously of great importance to the success of your case. Therefore, it is imperative that you temper your explanations with respect. You must strike a balance between talking down to the jury and talking over their heads. Such a balance is neither easy to find nor always in the same place. As you move through your career, again, try and keep in mind the definition of the 278 Forensic Accounting and Fraud Investigation for Non-Experts educator who was most influential in your life and strive to filter your explanations through that prism. APPEARANCE Appearance is an area where once again common sense is the key. Dressing appropriately is such a simple goal, yet many professional witnesses misapprehend the bigger purpose behind this rule. Continuing the comparison of your role as a professional witness with that of an educator, we see that the underlying importance of appearance once again makes sense. Persuasive authority derives not only from explicit badges of authority but from conduct that implies authority. This is evidenced in the admonition that police officer witnesses should always wear their uniform during court appearances. For nonuniformed officers and those professional witnesses in the private sector, the choice of attire is often more complex. Generally speaking, conservative business attire is appropriate. A conservative suit with a single-colored shirt, set off with a simple-print tie, should be standard issue in any professional witness's clothing arsenal. Choices in gray, blue, and black all work well for professional witnesses in the financial arena. Either single-breasted or double-breasted, given the individual's build, is a fine choice, as are choices between two- or three-button jackets. At the bare minimum, a professional witness should wear a conservative blazer. You should avoid loud shirts with wild or busy prints. Regardless of your own personal fashion sense, these shirts tend to be distracting and mar the overall impression made by the witness. Your choice of tie is often a much more personal one. Here, unlike the suit, there is probably a little more room for leeway, but do not overdo it. Ties commonly referred to as \"power ties\"usually red, burgundy, or diagonally striped red and blueare good choices, as are ties with a simple design or conservative polka dots. Lest you mistake our point here, let me emphasize that these recommendations have nothing to do with \"fashion.\" What we want to do is point out that your appearance will create an impression on the jury. This impression can be a powerful subliminal motivator and, to the extent that you are aware of it, you can control its impact. The courtroom, and more importantly the witness box, is not a place to make a fashion statement. A good rule-of-thumb is this: If you feel you look too conservative, you are probably dressed just right. Conservativeness is an inextricably intertwined element of credibilityespecially in the area of financial matters. If you doubt the truth of this statement, we suggest you Documenting and Presenting the Case 279 look no further than Wall Street or your local large CPA firm. Most people's mental image of a financial professional conforms to the stereotype of the gray or blue suit, perhaps pinstripe, with a starched white shirt and wingtip shoes. Anything else connotes an irresponsibility that most people would rather not associate with someone to whom they entrust their fortunes. It is inarguably both an antiquated and an inaccurate stereotype. However, as a professional witness your responsibility is not to change people's stereotypical perceptions. Rather, it is to recognize where they exist, negotiate around them, and persuade people that you are a credible expert. In this case, conservative is as conservative does. In other fields of expertise, such emphasis on attire might not be nearly as important. For example, if we were discussing a dress code for an accident reconstructionist, there would probably be very little emphasis on attire beyond an exhortation to dress in a professional manner. Their role in the courtroom drama is different, however, from that of the financial expert. Your role in the eyes of the jury is that of an expert in the area of financial matters, whether you are an actual CPA or merely a highly trained and experienced investigator. The jury must see you as a consummate professional whose opinion is to be given the highest regard. As a practical matter, you can rest assured that the financial professional that the opposition will hire will conform to the jury's stereotypical expectations of a financial professional even if you don't. Hand-in-hand with attire goes grooming; our personal grooming habits are a large component of how others perceive us. To that end, a professional witness would do well to visit the barber regularly and maintain a neat and business-like appearance. As with clothing choice, hairstyles are a very personal matter. While we do not propose to tell the reader how to select a hairstyle, we will offer you a few words of advice for choosing from among your options. Outlandish hairstyles suggest unorthodoxy. This in turn detracts from witness credibility in a conservative area such as financial matters. Similarly, unwashed (or infrequently washed) hair suggests a lack of discipline and poor attention to detailneither of which you want the jury to infer from your appearance. Undoubtedly, some jurors will perceive a witness groomed in such a manner as being eccentric and perhaps even avant-garde after all, it worked for Einstein. Whether this is true is immaterial. The truth of the matter is that a courtroom battle between experts is won and lost based solely on the jury's perception of their credibility. 280 Forensic Accounting and Fraud Investigation for Non-Experts Because credibility and stereotypes play an unavoidable role in the outcome of the case, you must acknowledge them and work within them if you want to win, even if you do not agree with the stereotypes. It is as true inside the walls of the courtroom as it is in life that \"you don't ge