One of the few growth industries in the current economic climate? Fraud investigators.
Allegations of fraud are increasing, as the financial crisis drags on. As a result, reports the New York Times, people who are skilled at following the money have rarely been more in demand.
The FBI is recruiting new hires to work on a glut of cases — it had more than 1600 open mortgage-fraud investigations at the end of fiscal 2008, almost twice as many as two years earlier.
And private fraud investigation firms are enjoying boom times. The number of certified examiners is said to be up 10 percent compared with last year.
The Bernard Madoff case provided an example of one way in which the financial crisis can help expose scammers. Madoff used new investors’ money to pay back old ones. But because of the market downturn, many of Madoff’s investors wanted to withdraw their money all at once, leaving Madoff without enough money to cover everyone’s requests, and ultimately forcing him to confess that he’d been running a Ponzi scheme. Several of the “mini-Madoffs” appear to have followed a similar pattern.
The Madoff case also provided the archetypal example of the fraud investigator as hero — Harry Markopolos, who, while working for a rival investment fund, sent detailed memos to the SEC alleging that Madoff running a Ponzo scheme, which the agency largely ignored. Markopolos had his moment in the sun at congressional hearings last month, where he was treated with reverence by sycophantic lawmakers.
There’s evidence that the recent publicity may have created a surge in young people wanting to go into the heretofore unglamorous field. One graduate student in accounting, who hopes to become a fraud investigator, told the Times: “I’m going to help straighten out the business world one way or another.”