Where you have lots of money, you surely will have people who give in to temptation. That may involve them in fraud. And when you have billions of euros at a bank, the risk of fraud is great. That’s why we devoted the latest episode of A Dictionary of Finance podcast to bank fraud investigations.
The European Investment Bank has an entire division devoted to bank fraud investigations. In case you’re wondering exactly what fraud is, here’s how Sabrina Mancini, an investigative officer at the EIB, defines it: “Fraud is any act of omission or misrepresentation that aims to gain a financial advantage.”
Sabrina is joined on the podcast by Marco Loretti, the EIB’s coordinator of investigations, who used to work on human-rights investigations in Africa. A lot of what bank’s do to protect against fraud, Marco notes, happens before a loan is even made. During contract negotiations, the bank should ensure that subcontractors can’t be given unfair preferential treatment by the company that takes the loan, for example.
Still, when fraud is suspected, Dominik Adamski comes in. He’s the senior forensic officer at the EIB. That doesn’t mean he examines dead bodies like a crime scene investigator. But he is the banking equivalent of a CSI, because he uses forensic accounting techniques. “Forensic accounting tracks anomalies,” he points out, such as big or frequent transactions entered late at night or at the weekend. Forensic accountants tend to look for “abnormal patterns,” he adds.
Let us know what you think of the episode on Twitter @EIBMatt or @AllarTankler.
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