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An insight interview with Paige Rumble
From a glance at Paige Rumble's CV you could be forgiven
for thinking that her future as an SFO financial investigator was
written in the stars. With a law degree from Trinity College Oxford
and chartered accountancy training with Grant Thornton, Paige
personifies the SFO's own combination of high level legal and
financial skills. But the primary function of every financial
investigator (FI), even one as senior as Rumble, is always the
investigation itself.
"At the beginning of every case there is a considered evidence gathering push. Until quite recently actual physical searches of premises could be conducted only by police officers, although the searches were still carried out under our powers. Now we have new powers which enable SFO staff to search alongside police officers and so SFO investigators have a more hands-on role right from the very start of the evidence gathering stage.
"After any initial searches the full case team - police officers, investigating lawyers and FIs - spends a lot of time reviewing what may be a very large amount of relevant informationobtained from numerous people and places, in both documentary and electronic format: houses and company premises may have been searched; banks and credit card companies asked for information; any other possible source of evidence contacted, for example insurers, solicitors, telephone companies, you name it - not to mention evidence gathering interviews with witnesses, etc.
"Typically, the more 'financial' the information - the banking material, for instance - the more likely it is that it will be passed straight to an FI who will then begin to analyse it, looking at, for example, the pattern of payments to particular individuals or companies."
All very straightforward in theory, but in practice there will be endless intellectual and practical obstacles waiting to complicate every stage of the investigation.
"Almost by definition the most successful frauds are those which will have been deliberately and carefully constructed by the fraudsters to make detection and investigation as difficult as possible. We have been working on a case in which the company's accounting system is entirely 'home-made'. The staff who worked with it every day when the business was still up and running were able to get at the reports they needed because each part of the system was intricately connected to another part. On the collapse of the company certain parts were disconnected and it has been impossible to recreate the system in its entirety. The liquidators have not dared to switch off those parts which are still running in case they won't re-start. Even the most straightforward of queries then becomes very difficult. A key question for us in this case is the value of sales to each customer. You would think this would be pretty easy to establish but in this case there is no simple way of getting that information. We have had to extract information from two different parts of the system and then match the transactions in the two extractions. Only then were we able to put names from one part to values from the other and so come up with figures for sales to individual companies.
"As another example we have a company that dealt frequently with some 300 or so customers around the world. It is our strong suspicion that all 300 were, in fact, controlled by the one and that the very large amounts of money going to and fro in this web were actually just smoke-screen transactions designed to hide or disguise the true nature of the payments. But there were many thousands of these transactions, with each single sum having been divided and possibly re-divided into many smaller payments before being recombined and returned to the company at the centre. It's a financial investigator's job to trace those payments and to prove that payment X ends up being split into payments A, B and C before being recombined, perhaps with payments D, E and F, and then returned.
"One of our FIs has done a fantastic job writing a computer program that loads all of the bank account data for all of the transactions, looks at the transactions by amount and date, makes adjustments to take account of, for example, possible bank charges and exchange rate differences - these are all international transactions - and then searches for matches between payments from one bank account and receipts into another. Finally, the program produces a report and a financial investigator exercises fine judgement over whether a particular pair or series of transactions are a match and are thus evidence of the movement of funds from one account to the other."
It is no accident that Rumble and her colleagues face such immense difficulties in performing tasks which, in most legitimate companies, would be routine. Such carefully contrived opacity in a company's basic business records and systems is typical of the obstacles financial investigators face even in the very earliest stages of an investigation.
"Bringing some order to a mountain of evidential material yielded up by searches and other enquiries is, of course, a tremendously important first step and it can throw up some extremely complex problems, as we've seen. But it is still really only preparatory to the main work of a financial investigator; pulling out the key elements and starting to make the connections that will, in the end, illuminate what all this information really means and establish what was really going on behind the façade."
Rumble is careful to emphasise the word 'information'; it is a common misconception that 'financial investigators' deal purely with accounting evidence.
"FIs don't sit for hours on end poring over columns and columns of figures, or doing great, complex analyses and creating graphs to explain them. Of course we are investigators of frauds which are, of their nature, financial. But evidence of fraud is found in many places, and in many forms, so we spend just as much time looking at memos, documents, minutes of board meetings, diaries, records of telephone calls, interviewing witnesses and suspects, etc., as we do looking at purely numerical information."
Which also means that technical accountancy skill is not the sole measure of someone's suitability for the FI role; a fact that has been known to raise an eyebrow or two in the wider world.
"The skills required are essentially those of a forensic accountant although these may have been acquired in a variety of financial and investigative roles. What is important is that both skill sets are present. This is not a job for either an investigator with no understanding of financial information or an accountant with no understanding of investigation - no matter how good they may otherwise be. "We now use a simulation test to assess the investigative and financial know-how of both internal and external candidates for FI posts. Time and again 'non-forensic' accountants do really badly because, while they tend to notice technical errors (things which are irrelevant to us), they overlook the important things which point to deception. Similarly investigators who are not financially aware may spot the 'human' element of the fraud but fail to pick up on what else the figures are telling them.
"Of course for staff coming in at more junior levels we would hope that, with training, the skills can be developed. A greater technical ability may be required the more senior your role in the office since you will then be expected to plan and lead the financial investigation, which, as we have seen, can be very complex. But as important is your eye for fraud and an ability to see the wood for the trees. The kind of person who can see the wood for the trees - and such people are very often not your typical accountant, lawyer or police officer - are precisely the types we are looking for."
The simulation test has proved a powerful tool in helping to identify the sleuth within or, of course, the absence of one.
"Good investigators are typically very nosey, and very precise, but I believe they also need to be the kind of person who gets a genuine thrill out of finding something that looks wrong and then chasing off to find out why. And you can see that quality in people who are naturally 'investigative'. This instinct can be revealed, developed and honed by training and experience, but I doubt that it can be instilled from scratch. Some people will never make goodinvestigators and it is tremendously important for us that we identify them at the right point in the recruitment process. The simulation is designed to help us do this by identifying those who already have the skills, or can develop them, and those who don't. In essence it is a case study rooted in a set of business documents including financial statements"
Some widespread misunderstandings about what financial investigators do has ensured that from the beginning the case study has received a mixed reception.
"Some people look at the accounts and immediately say: 'It's not fair - I can't do this - I'm not an accountant'. This reaction is surprisingly common but it completely misses the point. When you delve into all of the information, not just the accounts, you find that the exercise is not about 'doing accounts'. Why would it be? A financial investigator's job is not about that either; it's about having an eye for things that are a bit odd - even when they are buried in a large body of often complex information - and then being able to follow them up effectively. It's all about one's approach to the information and how one develops a line of thought."
So is there a need to be especially numerate or technically expert?
"Only to the extent that number-based information shouldn't send you screaming from the room; and that's not the same as being a technical expert. It's important to remember that it's never an SFO financial investigator's job to be an expert witness. In other words, it's not an FI's job to provide the jury with a technical opinion or interpretation. It is our job to lay the pure facts before a jury with as much clarity as possible so that they can reach the right verdict. We are witnesses of fact. If we need to make and present some very technically complicated calculations about, for example, profitability trends or adequacy of reserves, then in all probability we would call in an expert in that field to speak to that. We are experts in financial investigation, not the niceties of all businesses."
But FIs do still find themselves in the witness box.
"Whilst it is very rare for an SFO lawyer to go into the witness box, financial investigators often do because we are the ones who give the financial evidence. This means that attention to detail and precision both matter immensely in this job because if you are vulnerable on even the smallest thing, even something that makes not a jot of difference to the guilt of the defendant, the defence will seize upon it and use it to try and make the jury doubt everything else you've said. At the point you climb into the witness box you are the public face of the office and a lot rides on your credibility. It's a big responsibility and every FI needs (and wants) to be absolutely on top of the detail of their case."
So is that what draws most people to work at the SFO; the intellectual challenges rather than a desire simply to right wrongs?
"For my part, the great luxury of this job is that there are times when you really have to bend your mind to a problem. You are constantly asking yourself: 'Does this prove what I think it proves?'; 'Does that show clearly that XYZ is true?'.
"People choose to work for the SFO for all kinds of reasons. We have lots of people who have been very successful in the private sector but who now choose to work here instead, be that a lifestyle choice or a genuine desire to be working for the 'right' side. I think that we can probably safely say that most people aren't here for the money! I think that, in the main, people are here because they are ambitious to do the most interesting work that exists in this field, to do the work well and with like-minded people, and to do the right thing. When we believe we have evidence that someone is guilty, of course we want a conviction, but, for me at least, it's not personal. I simply want a result that reflects well on the SFO and that rewards all the hard and inspired work that went into our investigation."
Each of the five investigation and prosecution divisions has a principal divisional investigator. They are Paige Rumble, Dave Watson, Julian Parker, Anne Dilks and Simon Daniel. A sixth principal investigator, Nick Stroud, is currently reviewing the SFO's data management system. Working closely with investigation lawyers and other specialists there are 116 financial investigators of varying seniority grades.
This interview was conducted and written by an external writer.
