Counterfeit Notes

There was another very interesting case of a very good Samaritan , a person who was very good, friendly and a person always willing to be helpful but sometimes these are the too good to be true symptoms. There was one bank where a person who a very pleasant personality, a very smiling cheerful , who had a very good relation with all the staff of the bank even the manager and this thing happened maybe 20 years ago, so you may have to relate it to the kind of banking system that they had that time. Then this person, a very good and nice human being, people gave him some support in terms of quicker withdrawals, better deposits, he did not have to wait very long after putting in his token ad so on. In this bank, a new internal auditor was brought in, and he got a new audit software. He wanted to try that audit software. Now the important lesson here is to think differently and look at data in a kaleidoscopic manner. What it means is that see the data from different angles, view it from different viewpoints, different sides, top to bottom, bottom to top, right to left, left to right and so on. Once you keep churning the data in different forms, your insights, your ability to get an x-ray vision into the data would increase. So, this auditor got the data from the bank. The data contained list of account holders, list of depositors, amounts of fixed deposits, interest calculations etc. When this auditor started looking at things differently, he started visualizing different kinds of queries. He started asking different kind of questions, e.g. how many depositors are less than 30 years of age, how many depositors are staying in the city of Mumbai or how many depositors are having 5000 or 10000 as an average balance. He started asking different kinds of queries that came to his mind and this is very important. This is the sign of a good forensic auditor. Try letting your mind loose and that would open a new world in front of you.

So in this case, when the auditor was looking at data differently, one query gave some unusual results. He asked the query to the data that are there any people who are foolish with their money. He queried the software to give him the list of depositors who deposited and withdrew the same amount of money on the same day.

Now, this is not a usual thing for someone to do. It might happen in a very rare situation and that would be a one in a thousand kind of cases. It’s going to be a very miniscule, small percentage of the total depositors. But to his surprise there were some 30 odd deposit account holders who would deposit and withdraw same amount of money every second or third a day of the week for the entire one year period he had the data for. This was quite unusual. He wondered why these people were so crazy that they would come and deposit the money and on the same day would withdraw it as well or vice versa. His mind was perplexed. He could not find any reasoning or logic behind it. He analysed the data further. He found that all of these were very senior citizens of that bank. They were mostly 60 or 70 years of age. None of the cashiers or anybody else had seen them as they were mostly crippled, they were not able to come to the bank. The pleasant young man mentioned earlier in the case study, was an LIC agent, who would run errands for these elderly people. He was the one who would come to the bank and do the deposits and withdrawals for these people. He had the trust of the bank and had pre-signed cheques and counterfoils from the elderly people. People never had any suspicion on him as their balances was always the same as they had known. The auditor put 2 and 2 together and questioned this person. Then the fraud was exposed. This man was a part of the gang who used to spread counterfeit currency. Since his counterfeit currency had to be brought into circulation, this gang had a person like this in many banks. What this person used to do was that when he used to withdraw money, he used to take good cash and when he would deposit money, he would deposit some money that was the counterfeit notes along with the good money. Since he had the trust of the bank, the cashier and other bank employees would not examine his notes for possibility of counterfeit notes. They would gladly accept his money and his deposits were mixed up with the rest of the deposits. The intention of these withdrawals and deposits was only to push the counterfeit notes. This fraud could be found out only because the auditor had done something out of the blue, something differently. When one starts looking at things differently, one can find out a pattern which may give you fantastic insights.

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