SHUTTER SCAMMER DEFRAUDS FLORIDIANS OF MORE THAN $450,000 Detective John M. Gaspar Www.AFIPI.com

November/December 2013

John M. Gaspar, CFE

Case in point: Case history dissection

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It was another Monday morning at Flagler County (Florida) Sheriff’s Office (FCSO) Criminal Investigation Division (CID). On the first day of the workweek, we’d review all the crimes committed over the weekend and return to a plethora of police reports and messages from citizen and deputies.

I’ve always taken an interest in patterns of behavior. In my more than three decades as an investigator, I noticed that fraud and theft schemes were on the rise not only nationally but also in Flagler County. I believe this increase was in part because of a difficult economy, availability of prime victims and a greater chance of getting away with fraud over crimes of violence. Also, some prosecutors and detectives don’t always see a fraudster’s modus operandi as criminal in nature. Other factors include limited resources, unreasonable detective caseloads and prosecutors’ and police personnel’s lack of understanding of fraud crimes. This leaves many fraud victims without closure.

I think I looked at fraud differently than many other law enforcement investigators. Of course, I would be upset if someone forcibly pushed me to the ground and took my Casio watch (valued at $125) and $20 of U.S. currency from my wallet. However, if someone defrauded me out of US$10,000 in a hurricane shutters fraud scheme (later we would nickname it “shutter bug fraud”) I would be severely financially injured, possibly for the rest of my life.

My interest in fraud cases at the police department spurred me to be more attentive to the many potential schemes that were classified as civil and not criminal. These crimes left a trail of devastated victims in their wakes. In Florida, like most other states, larceny occurs when someone temporarily or permanently deprives someone of something of value (currency, property, etc.).

According to the ACFE’s Fraud Tree, larceny of cash is one of the main components of asset misappropriation; identifying it is a good place to start when investigating fraud. The next step is gathering information to see if there’s a pattern and hence a fraud scheme or an isolated theft.

FIRST 'SHUTTER BUG' FRAUD VICTIM

So, in 2006, I was at my desk in the police station at about 8:30 a.m. with my second cup of coffee when I greeted Mary, 76, a citizen with a problem. She had purchased shutters from a franchisee of Roll-Away Shutters in Florida. She explained that she’d filed a police report months earlier; she’d made numerous inquiries about it, but no one had gotten back to her. I pulled the report up and saw that it was marked as a civil case information report and not a crime; that was why I wasn’t aware of the incident.

One of the things I learned as a NYPD detective working out of major case squad in Manhattan is to be an active listener. You learn a lot in life by just shutting up and paying attention. So I listened to Mary as she explained that she purchased shutters from a man named Daniel Quinn through a salesman named John more than 18 months previously. They took a 50 percent deposit. The State of Florida only allows 10 percent down on a purchase unless the work is completed within a designated time.

I asked Mary questions that would help me identify if this was a civil or criminal matter. Best practices, time and training via the ACFE had helped develop a skill set that would allow me to see beyond the veneer of the initial police report and look for information that may indicate the incident may not have been civil in nature. As a CFE since 1989, I’ve been exposed to a highly qualified and dedicated community of anti-fraud experts, and I’ve shared information with them about fraud schemes.

MY INITIAL INTERVIEW WITH MARY

Q: What efforts have you made to contact Mr. Daniel Quinn?

A: I called and wrote to him on numerous occasions, and he has not contacted me.

Q: Do you have phone records?

A: I do and I’ll bring them to you.

Her phone records showed she had called Quinn more than 30 times in the previous year; each call lasted about one to three minutes each. That coincided with her account that when she had left numerous messages on Quinn’s company voice mail. It’s important to have a witness’ testimonial evidence supported by forensic evidence for a good prosecutable case.

Q: Did you ever write Mr. Quinn about this business transaction, and if so, do you have a copy of that or those letters?

A: I did, and I can bring you those letters.

Mary provided me with several letters she had sent certified return mail in which she wrote that she wanted either the job completed or an immediate refund. Quinn’s business accepted some of these letters, and others came back stamped undeliverable.

At this initial stage of the investigation, I established that this was not a civil matter and it may be criminal because any reasonable person would believe that for 18 months Mary had $2,500 less in her bank account and no hurricane shutters.

In our police department, we would distinguish a civil complaint from a prosecutable criminal complaint by identifying if:

  1. The complainant made and documented reasonable efforts to resolve the compliant.

  2. The contractor made reasonable efforts to resolve the issue and return the deposit, funds or property.


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Related Links

2013 CFE Exam Prep Course, US Edition 2013 CFE Exam Prep Toolkit, US Edition 2013 Fraud Examiners Manual, US Edition ACFE Fraud Casebook Bundle Bribery and Corruption Casebook Financial Statement Fraud Casebook: Baking the Ledgers and Cooking the Books Fraud Casebook: Lessons from the Bad Side of Business

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