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and the company holds the attorney-client privilege and it alone can choose to waive it. Failing to provide a proper Upjohn Warning can result in the waiver of the attorney-client privilege, put the person conducting the interview in a conflict situ- ation, or raise the ire of regulators. Multinational companies and their outside advisors must take care to ensure that the investigation is conducted in com- pliance with the law of the country from which documents and computer files will be taken and where interviews will be con- ducted. Some countries require employers to specifically notify their employee if he or she is the subject of an investigation. Other countries prohibit computers and documents from being taken out of the country as part of an investigation. This patchwork of cross-border rules and regu- lations requires detailed attention. Even countries operating exclusively within the United States need to navigate the rules of each state concerning employee rights and privilege issues. What Should Be Done at the Conclusion of a Fraud Investigation? At the conclusion of an investigation (or perhaps sooner), businesses need to decide whom to contact. Is regulatory notice nec- essary? Should the police be contacted? Did

the fraud impact lending warranties? Does the insurer need to be notified? Do custom- ers have a right to know? Do external audi- tors need to be notified? Answers to each of these questions, of course, depend on the nature of the business and fraud at issue. Another critical step is reviewing the internal controls to determine what led to the fraud, how it could be duplicated in other business units or by other employees, and how internal controls should be improved. Finally, there is always the threat of litigation following employee fraud. The company and management may face shareholder, regulatory, customer or other lawsuits, as discussed above. But they need not remain purely defensive. Businesses that have been defrauded have every right to explore and pursue claims against the fraudsters, their colluders, and third parties that enabled the fraud. Conclusion Employee fraud is a growing scourge that impacts businesses of all sizes. Simply assuming “it won’t be us” is a path fraught with peril both for companies and man- agement. The fraudster profiles and risk- mitigation mechanisms discussed above provide means for mitigating the likelihood of employee fraud and dealing with it should a problem arise.

Anthony F. Fata is a partner at the law firm of Cafferty Clobes Meriwether & Sprengel LLP and teaches Securities Regulation and Corporate Governance as an adjunct profes- sor for Seton Hall University School of Law’s Masters in Jurisprudence Program. Corey M. Martens, CPA, CFF is a partner in KPMG’s Forensic Investigation Services practice in Chicago. Update Your Contact Info If you recentlymoved, joined a newfirm, created a new email account, got a new phone number, etc. please take a moment to update your member profile.You can do this online at www. chicagobar.org, click on Update Profile which is located on the home page, left column or call 312/554-2135 or send an email to kbryan@ chicagobar.org.

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