Some words and phrases raise red flags for fraud investigators.
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Some words and phrases raise red flags for fraud investigators.

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Expressions such as "special fees" and "friendly payments" abound for those embroiled in bribery cases

Phrases such as "nobody will find out", "cover up" and "off the books" are also likely to litter in-boxes

(Financial Times) —  

Phrases such as “nobody will find out”, “cover up” and “off the books” are among those most likely to litter the in-boxes of corporate rogues according to fraud investigators deploying increasingly popular linguistic software.

Expressions such as “special fees” and “friendly payments” abound for those embroiled in bribery cases, while rogue employees feeling the heat are likeliest to write that they “want no part of this” as well as the somewhat misguided “don’t leave a trail”.

More than 3,000 such words and phrases used in email conversations among employees engaged in corporate wrongdoing have been identified through specialist anti-fraud technology, according to research by Ernst and Young based on evidence from corporate investigations in conjunction with the FBI.

“The language, which is a mix of accounting phrases, personal motivations and attempts to conceal, are very revealing,” said Rashmi Joshi, Ernst and Young’s director of fraud investigation and disputes services.

He said that the monitoring of email traffic played almost no role in the compliance efforts of companies looking for possible problems. “While most organisations only focus on the numbers when investigating discrepancies, what we are seeing are ways of analysing words – emails, SMS or instant messaging – to identify and isolate wrongdoing.”

Linguistic analysis software, which initially protects employee anonymity, can flag uncharacteristic changes in tone and language in electronic conversations and can also be tailored for particular types of employees, especially traders.

The findings may be of little comfort for institutions whose email traffic has come under scrutiny, particularly as regulators probed the origins and scale of the interbank lending rate-rigging scandal.

Regulatory probes into Barclays and UBS, which have paid out record fines to authorities in the UK and US to settle allegations of efforts to manipulate rates, took years to complete in part because of the sheer volume of electronic communication which was reviewed.

But the use of such technology could prove of growing significance in the way compliance departments police employees, ensuring they can keep on top of sprawling organisations and potentially avert costly mistakes.