From the FBI files: Forensic accountants crack major fraud cases
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From the FBI files: Forensic accountants crack major fraud cases

5 months ago · 2 min read

The suspect wasn’t talking.

Then the FBI brought in the CPA, and the tone of the interview shifted immediately.

Forensic accountants in law enforcement play an important but largely anonymous role in protecting the public from fraud and gaining convictions of financial criminals. While agents in the field perform the on-site investigative work, forensic accountants who are hidden from view “follow the money” in ways that lead to breakthroughs.

They scour bank statements and business records for evidence of illicit payments that only a highly trained accountant would be able to discover.

“When you're working on a case with a case agent, that one transaction for $150 out of the 3,000 transactions might be that key transaction to turn the case for the agent,” said LaFell Peoples, CPA, who leads the forensic accounting unit in Detroit for the FBI. “That might be a kickback. That might be the thing that the agent was looking for.”

A turn in the interrogation

Three or four times a year, Peoples is asked to sit in on interviews of suspects so he can use his intimate knowledge to support the agents in their interrogation. In one case, agents investigating a financial crime who had been unable to get the suspect to cooperate asked Peoples to join them in the interrogation room.

Peoples didn’t even have to speak. The suspect knew what kind of expertise he was dealing with.

“He didn’t think he could snow me, so he got nervous,” Peoples said. “…And it took a distinct turn toward the positive once I got in there.”

Peoples came to the FBI in 2010, when the agency was beefing up its forensic accounting staff to enable better scrutiny of financial crimes. After spending 15 years in public accounting, he found the job to be enormously rewarding as he has pursued high-profile fraud cases.

Within a few months on the job, Peoples began working on a case of incredible significance. He helped unravel a pharmaceutical fraud scheme that billed Medicare and Medicaid for more than $60 million and fraudulently distributed more than 4 million doses of hydrocodone and 250,000 doses of oxycodone, according to the FBI.

The scheme involved 26 pharmacies and resulted in convictions of more than three dozen suspects, including nine doctors and 15 pharmacists, according to the FBI.

A goal of helping people

Peoples now oversees a department of 13 forensic accountants for the FBI office in Detroit. He estimated that a total of about 500 forensic accountants are working at about 40 sites throughout the country, and more are needed.

It takes about five years of professional accounting experience to understand the mechanics of the financial system well enough to succeed in one of these roles with the FBI, Peoples said. The AICPA offers opportunities for CPAs who wish to become skilled in this field through its Certified in Financial Forensics (CFF) credential program. Those who choose these roles have an opportunity to uncover fraud cases that may include tens of millions of dollars in illicit gains.

In perhaps his most well-known case, Peoples was part of a team recognized for distinguished public service in 2016 by U.S. Attorney General Loretta Lynch. According to the Justice Department, physician Farid Fata was sentenced to 45 years in a medical malpractice scheme that led to $34 million in fraudulent claims.

Fata was accused of deceitfully diagnosing cancer and prescribing and administering unnecessary treatments. The FBI team recovered about $11.9 million in fraudulent payments. The extremely high amounts that Fata was billing to Medicare and insurance companies led the FBI to suspect fraud.

Peoples analyzed dozens of bank accounts to track the ill-gotten gains and traced records of numerous properties that were then seized by the FBI to recover the funds.

“That was one of my proudest moments,” Peoples said.

Peoples anticipates other proud moments to come. As a forensic accountant he derives great satisfaction from using his skills to serve the public by uncovering fraud that’s costly to society as well as its victims.

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