By William Kresse, Assistant Professor and Director of Graduate Programs in Financial Fraud Examination and Management, Graham School of Management, Saint Xavier University, Chicago, Illinois; John Lucki, Detective Sergeant, Financial Crimes Investigation Section, Detective Division, Chicago, Illinois, Police Department; and Kathleen Watland, Assistant Professor and Director of Programs at the Chicago Police Academy, Graham School of Management, Saint Xavier University, Chicago, Illinois
o combat the overwhelming threat of identity crime, the law enforcement community is finding allies in unexpected areas such as business schools. In recent years, faculty members at business schools have begun to focus on the causes and effects of identity crimes, partnering with law enforcement agencies in some cases. In particular, faculty members at Saint Xavier University in Chicago have developed antifraud and identity crime programming and conducted research about these topics.
Antifraud Academic Courses and Programs
For almost a decade, the Association of Certified Fraud Examiners, through its Anti-Fraud Education Partnership, has spearheaded the effort to have every college and university offer a course in fraud examination. The results have been impressive. To date, practically every business school in the United States offers at least one course in fraud deterrence, detection, and prevention. But a growing number of business schools have taken the next step: developing and offering a dedicated, multicourse certificate or degree program in fraud examination and/or forensic accounting.1
A diverse array of business colleges now offers multicourse antifraud programs. Some programs are at the undergraduate level, some at the graduate level; some result in a graduate certificate, some offer a degree; and some are housed completely in the school of business, others involve other disciplines, such as criminal justice or law. But regardless of the level, end product, or location, they all represent one idea: a sincere effort by dedicated academics to use higher education to address the growing threat of fraud.
However, with the rapid proliferation of antifraud courses and programs, academicians and others realized that guidelines were needed. Accordingly, West Virginia University, with funding from the U.S. Department of Justice, Office of Justice Programs (OJP), National Institute of Justice, assembled a task force to explore the development of a model curriculum for the disciplines of fraud examination and forensic accounting. Working with a diverse group of experts from academia, the law enforcement profession, regulatory agencies, public accounting, and corporations, West Virginia University produced the unpublished report “Education and Training in Fraud and Forensic Accounting: A Guide for Educational Institutions, Stakeholder Organizations, Faculty, and Students.”2 Included in this report is the model fraud examination and forensic accounting curriculum, which, while voluntary and flexible, articulates a common body of knowledge inherent in the disciplines of fraud examination and forensic accounting.3 Since the issuance of the model curriculum, professors have looked to it for guidance in developing or enhancing academic antifraud courses and programs.
The vast majority of antifraud academic courses and programs address the specific crime of identity theft in a substantial way. For example, the graduate programs in fraud examination at Saint Xavier University, which can lead to either a graduate certificate or a master’s degree in business administration (MBA) in financial fraud examination and management, include a mandatory course in “Identity Theft and Computer-Related Fraud.” Team taught by both a professor of business information systems and an adjunct professor who is also a detective sergeant in the Chicago Police Department (CPD) Financial Crimes Unit, “Identity Theft and Computer Related-Fraud” has the stated purpose of providing students with a thorough knowledge of both identity crime and the types of business frauds that can be perpetrated using information technology. This course objective is achieved through projects and modules that address the various types of identity crimes; trends in identity crime; methods of deterring, detecting, and preventing identity crime; and related management, legal, ethical, and privacy issues.
Working with the Law Enforcement Community
With the growth of academic antifraud courses and programming, business schools and law enforcement agencies have come to recognize both their mutual interests and the numerous benefits that can come from building a solid working relationship.
For example, beginning in the spring of 2004 the office of the Delaware County, Pennsylvania, District Attorney (DA), working with faculty from the Villanova University School of Business, developed and implemented a cooperative education program in forensic accounting and economic crimes. The students work in the DA’s office on actual financial crime cases, garnering real-world experience as part of their educational program. The result has been impressive: a reduction in the backlog of financial crime cases, along with headlines when the Villanova students helped to uncover a multimillion-dollar fraud.4
The working relationship between the Saint Xavier University Graham School of Management and the CPD has an even longer history. Since 1998, their Partnership in Education program has combined the talents of both institutions in several endeavors. These endeavors include the Graham School offering both graduate and undergraduate courses (including the entire MBA program) to members of the law enforcement community at the Chicago Police Education and Training Center. To date, almost 1,000 law enforcement professionals have been enrolled in the Saint Xavier University program.
From this working relationship, Saint Xavier University faculty, working closely with members of the CPD Financial Crimes Investigations Section, developed an MBA degree program in financial fraud examination and management. Beginning in 2003, Saint Xavier University began teaching this program at the Chicago Police Education and Training Center. More than 150 law enforcement professionals have matriculated through this program. Graduates include CPD officers and detectives, FBI agents, officials of the U.S. Justice Department, and special agents of the U.S. Air Force Office of Special Investigations, which adopted the Saint Xavier University program for educating its fraud investigators.5
Whereas many of the benefits of enrolling law enforcement personnel in academic antifraud courses and programs are obvious—increased knowledge of the various fraud and identity crime schemes and methods for preventing, deterring, and detecting them—there are also less noticeable, but still important, inherent benefits to law enforcement involvement in such programs. When law enforcement personnel enroll in academic programs, “communities of practice” develop. These synergistic learning communities result in an enhanced educational experience, where community members share knowledge beyond the classroom.6
Identity Crime Research
Research is the lifeblood of academia. Business professors are constantly looking for new areas in which to conduct research and new data pools to explore.
With the growing academic interest by business schools in fraud, a torrent of research will undoubtedly follow. Law enforcement agencies are discovering the benefits of working with business school researchers. In working cooperatively with business academics, the law enforcement community can profit from the findings and recommendations reported in these studies. Two recent studies are good examples of this mutually beneficial arrangement.
In 2006 Utica College’s Center for Identity Management and Information Protection received a research grant of almost $174,000 from the OJP to analyze a sample of closed federal identity theft cases. The resulting report, Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Proactive Enforcement, was the product of Utica College’s review of the 734 U.S. Secret Service identity theft cases that were opened and closed between 2000 and 2006, collecting data from 517 of these cases. Among the Utica College findings was that the median actual dollar loss for this data population was $31,356; that 71 percent of the offenders had no prior arrest history; and that 20.3 percent of the offenders committed identity crimes at their place of employment.7
In early 2006 the Institute for Fraud Prevention awarded a $40,000 research grant to the Saint Xavier University Graham School of Management to study identity crime in the city of Chicago. Saint Xavier University researchers examined data from CPD identity theft crime reports to gather information on the means by which identities were stolen, the manner in which the stolen identities were used by the perpetrators, and the demographics of identity crime victims.
The Saint Xavier University researchers first analyzed certain general data from the 28,891 identity crimes reported to the CPD between 2000 and 2006. Additionally, 1,322 of these identity theft cases were randomly selected for more intensive study. Specifically, data were gathered from these files regarding the means by which identities were stolen, the manner in which the stolen identities were used, and the demographics of the victims.
The end result of the study was the report Identity Theft: Findings and Public Policy Recommendations from the Saint Xavier University Study of Identity Theft Incidents Reported to the Chicago Police Department, 2000–2006. The findings from the Saint Xavier University study included the following:
The CPD is using insight gained from this study to shape its strategy for addressing identity crime.
- In most identity theft cases where the means of the theft was known, the offender was a relative, friend, or acquaintance of the victim.
- One in six identity crime cases was the result of a purse snatching, pickpocketing, burglary, or robbery.
- Identity theft occurred fairly evenly across income levels.
- The most popular use of a victim’s stolen identity was to acquire a credit card or to perpetrate some other credit card fraud.8
Professional and Academic Conferences
In addition to academic courses, many colleges and universities also offer continuing education classes and/or host conferences on particular academic topics. With higher education’s increasing interest in fraud and identity crime, the number of fraud-related continuing education and conference offerings sponsored by colleges is growing. Continuing education courses are usually aimed at practicing professionals and are used to refresh, advance, or update their professional education. Conferences can be designed for practitioners, for academics, or for both. Conferences can be completely sponsored by a college, or a college may simply host a conference, supplying only resources and facilities to a sponsoring organization. The following three examples illustrate the different types of conferences sponsored by colleges that can serve as resources for law enforcement professionals interested in identity crime and fraud.
Since 1990, the Economic Crime Institute of Utica College has sponsored an annual conference on a topic of economic crime, such as identity theft. These conferences are aimed at members of academia, the law enforcement community, corporations, and government. Since 1996, these conferences have been held in the Washington, D.C., area.
On a smaller scale, the Saint Xavier University Graham School of Management has hosted on its campus one-day conferences of the Chicago Metropolitan Identity Theft Task Force. These conferences, designed for law enforcement professionals, corporations, and government, address recent developments in the field of identity crime detection and prevention.
Finally, a consortium of academic and corporate entities has recently begun sponsoring an annual international conference on economic crime and education. Though focusing primarily on academic matters, the three-day Fraud and Forensic Accounting Education Conference includes many seminars that are of potential interest to the law enforcement community. The next conference is scheduled for May 8–10, 2008, at the Bally’s Las Vegas Hotel and Casino.9
As the interest of business college faculties in fraud and identity crime continues to grow, assistance from the law enforcement community can be invaluable in creating relevant research and programming. Likewise, by providing research, conferences, and educational programming to law enforcement professionals, U.S. business schools can serve as valuable allies in the ongoing fight against identity crime and other fraud. ■
1William Kresse, “A New Threshold in Fraud Examination Education,” Fraud 20, no. 4 (July–August 2006): 7.
2The complete report is available from the National Criminal Justice Reference Service at http://www.ncjrs.gov/pdffiles1/nij/grants/217589.pdf.
3Max M. Houck et al., “Forensic Accounting As an Investigative Tool: Developing a Model Curriculum for Fraud and Forensic Accounting,” CPA Journal 76, no. 8 (August 2006), http://www.nysscpa.org/cpajournal/2006/806/essentials/p68.htm (accessed January 3, 2008).
4James Bierstaker and James Borden, “Villanova U. & DA’s Office Sponsor Unique Co-op for Students’ Benefit,” ed. William J. Kresse, Fraud 21, no. 3 (May–June 2007): 8.
5“Getting the Edge on Fraud Prevention: Financial Fraud Courses Steer Agents in the Direction of Investigation Success,” Global Reliance (U.S. Air Force Office of Special Investigations) 32, no. 4 (September–October 2006), http://www.osi.andrews.af.mil/shared/media/document/AFD-070125-042.pdf (accessed January 3, 2008), 6.
6Kathleen Watland and William Kresse, “The Police, the MBA Program, Communities of Practice, and Fraud: A Case Study in the Utilization of Communities of Practice in Developing an MBA Concentration in Fraud Examination,” Journal of Academic Administration in Higher Education (forthcoming).
7Center for Identity Management and Information Protection, Utica College, Identity Fraud Trends and Patterns: Building a Data-Based Foundation for Proactive Enforcement, by Gary R. Gordon et al., October 2007, http://www.utica.edu/academic/institutes/cimip/publications/index.cfm (accessed January 3, 2008).
8Institute for Fraud Prevention, Identity Theft: Findings and Public Policy Recommendations from the Saint Xavier University Study of Identity Theft Incidents Reported to the Chicago Police Department, 2000–2006, by William Kresse, Kathleen Watland, and John Lucki, http://www.theifp.org/research%20grants/ID%20Theft%20in%20Chgo%20-%20%20Final%20Report_press.pdf (accessed January 3, 2008).
9The Accounting Department of West Virginia University is coordinating the logistics for this conference. For further information, registration, and sponsorship opportunities, contact Karen Smith at West Virginia University at email@example.com.