Defending Your Work: Bulletproof Expert Testimony with ...
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© 2015 Association of Certified Fraud Examiners, Inc. Defending Your Work: Bulletproof Expert Testimony with Forensic Data Analytics Jared Crafton, CFE, CAMS, EnCE
Transcript of Defending Your Work: Bulletproof Expert Testimony with ...
© 2015 Association of Certified Fraud Examiners, Inc.
Defending Your Work: Bulletproof Expert
Testimony with Forensic Data Analytics
Jared Crafton, CFE, CAMS, EnCE
Defending Your Work: Bulletproof Expert Testimony with Forensic Data Analytics
2015 ACFE Annual Conference
Page 3
Today’s Topics
► What is forensic data analytics?
► Expert witness overview
► The role of analytics in testimony
► Case studies
Page 4
Learning Objectives
► Best practices for expert testimony
► How data analytics can strengthen your testimony
► Tips for presenting complex analyses to a jury
► How to get involved in expert work
► Please note: This presentation is not legal advice.
Page 5
Overview of Forensic Data Analytics
Page 6
What Is FDA?
Forensic Data Analytics (“FDA”): Refers to the identification
of legally defensible fact-based evidence through data exploration in
order to support and focus investigative efforts. FDA combines the
extensive use of statistical and quantitative analysis, and explanatory
and predictive models to guide and obtain meaningful insights for
investigative, legal, regulatory, anti-fraud, or risk mitigation matters.
Page 7
EY’s Five-Phase Approach to FDA
1. Business understanding and test
design
2. Data mapping, collection, and
validation
3. Scripting, algorithm design, and
analytics
4. Dashboard, reporting, risk ranking, and
predictive modeling
5. Analysis or results, fine tuning, and
rollout
CRISP-DM Model
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Forensic Data Analytics Maturity Model
False Positive Rate High Low
Struct
ured
Data
Detection Rate Low High
Unstr
ucture
d Da
ta
“Traditional” Rules-Based Queries and Analytics
Matching, Grouping, Ordering, Joining, Filtering
Statistical-Based Analysis
Anomaly Detection, Clustering, Risk Ranking
Traditional Keyword Searching
Keyword Search
Data Visualization & Text Mining
Data visualization, drill-down into data, text mining
Page 9
Expert Witness Overview
Page 10
Overview of Steps in a Trial
Initial pleadings Document
production
Filing
complaint/
petition
Answer/
motion
in practice
Discovery
►Deposition
►Interrogatories
Matter at issue:
trial date set
Motions
►To dismiss
►For summary
judgment
Trial
►Jury selection
►Trial commences
Deliberation/
verdict
by judge of jury
Possible appeal
Page 11
Overview of Steps in a Trial—Voir Dire
► Process by which the expert is questioned about their backgrounds and qualifications
► Review your CV. Relevant work history
Relevant engagement bullets
Any materials in the public domain (articles, presentations)
Potentially enter your deposition with copies of your CV. o Typically one of the first topics covered
Don’t brag (winning cases, national expert, etc.).
Page 12
Overview of Steps in a Trial— Daubert Challenges
► Daubert impacts the admissibility of the expert testimony.
► The reasoning and methodology employed by the expert must
be scientifically valid and can be applied to the facts of the
dispute (e.g., statistical sampling).
► Five principal factors determine Daubert acceptability:
1. Theory or technique can be or has been empirically tested.
2. Theory or technique has been subjected to peer review and
publication.
3. The known or potential error rates
4. The expert’s method or conclusions has been accepted within the
relevant community and can be replicated by other experts.
5. Whether the theory existed before litigation began
(1) Source: Crumbley, D. Larry and Russell, Keith A. “So You Want to Be an Expert Witness.”
Litigation Services/Consulting, pages 3-4.
(1)
Page 13
Overview of Steps in a Trial— Motion in limine
► Is a pre-trial motion filed by counsel
► Prevents the opposing party from introducing inadmissible
evidence
► Under Federal Rule of Evidence 104, this motion may
possibly shield the jury from the expert’s report, financial
model, and/or testimony.
Page 14
Expert Report
► Expert reports
► Rule 26 requirements:
► Statement of all opinions and basis and reasons for them
► Data or other information considered in forming opinions
► Any exhibits that will be used to summarize or support
opinions
► Qualifications, including a list of all publications authored in
the previous ten years
► List of cases where provided expert testimony during the
previous four years
► Statement of compensation to be paid for study and
testimony
Page 15
Expert Report Writing Tips
► Know Rule 26 if in a federal court—requirements
► What makes a good report?
► Organization is key.
► Clearly define your role.
► Disclose assumptions if you have been asked to make any.
► Know the rules of the jurisdiction
► Be concise
► Do not stretch—stick with the facts.
► Use the accepted methods.
► Are calculations reasonable?
► Corroborate conclusions, observations, and findings.
► Independent verification
Page 16
Expert Report Pitfalls
► Not disclosing assumptions or not testing veracity of
assumptions
► Stretching outside of zone experience
► Keeping drafts—there should be none!
► Don’t be an advocate.
► Not following professional standards/guidance
► Mistakes in calculations or misunderstanding facts
► Not supporting statements with documents or testimony
► Spelling errors
► Letting counsel influence content
Page 17
Testifying: Depositions (“Depo”)
► General procedural process
Introductory commentary
Swearing in
Background of expert (name, work history)
Voir fire (qualifications challenged)
Discussion of opinion(s)
o Expert report/financial model
o Supporting documentation
o Assumptions/methodologies
Page 18
Testifying: Depositions, Cont’d.
► Goals of the deposition, according to:
Expert’s role
Opposing attorney’s role
Your attorney/client’s role
► To survive the deposition, you should:
Be as prepared for the deposition as you will be for the trial.
Remain a calm and active listener.
Do not yield to attempts by the examiner to recast your opinion.
Don’t let opposing counsel get a clear recording or sound bite to
use at trial.
Be yourself.
Page 19
Testifying: Deposition vs. Trial
► Depo is a prelude to trial.
► Depo—answer questions; trial—teach/instruct
► Review road map laid out by opposing counsel during deposition prior
to trial.
► Use of objections
► Review your own and all other related parties’ deposition transcripts
prior to trial.
► Use of demonstratives/exhibits during trial
► Opposing counsel will hope to catch you make an inconsistent
statement b/t depo and trial.
► Overall Although no judge is present, the depo is a tedious
procedure, and there is little difference between the testimony
obtained at a depo and testimony elicited in a court trial.
Page 20
Testifying: Direct Examination
► Conducted by attorney who retained you as the expert
witness
► Carefully crafted questions to elicit information favorable
to his client
► Key themes:
Be a great teacher, not a preacher.
Be likable and honest.
Do not advocate.
Keep it simple.
Summarize what you are going to tell them.
Rehearse the questions.
o Avoid long narratives (jurors have a 30-second attention span).
Page 21
Testifying: Cross-Examination
► Opposing attorney asks questions.
► Goals:
To lessen the impact of testimony you have on direct exam by
discrediting/impeach you
Will directly attack your opinion and methodology
► Key themes:
Listen carefully.
Clarify if you do not understand.
Stay in your area of expertise.
Think fast on your feet.
Never be defensive, argumentative, or arrogant
Page 22
Testifying: Cross-Examination, Cont’d.
► An effective cross-examination will:
Attack credentials of the expert.
Show unprofessional bias of the expert.
Get the expert lost in the records.
Discredit the expert with prior inconsistent
statements (depo trial).
Page 23
Jurors: What They Think of Most Experts
1. Yeah, right qualifications. I call it “bragging.”
2. All these folks in suits are exactly the same.
3. What is the difference between a lawyer and an expert again? Hmm …
4. Who cares that they went to some Ivy League School?
5. Jeez … it can’t only be 10:30 a.m.
6. Thank god that person is off the stand.
Page 24
The Role of Analytics in Your Testimony
Page 25
Understanding Your Data
► Is the data available?
► Does the data cover the relevant attributes?
► Is the data messy?
► Is there enough data?
► Is domain expertise on the data available?
Page 26
The Big Picture
Interviews
Document analysis
(unstructured data)
Financial and operational
analysis (structured
data)
► Email and user documents ► Social media ► Corporate document repositories ► New feeds and research
► Sales records ► Payment or expense details ► Selected general ledger accounts ► Financial reports and analysis
Interviews pull from document analysis and financial and operational analysis.
Page 27
Side Note: Rationalization Often Lives in the Text … ► T&E descriptions
► Payment descriptions
► Email and instant message
► Social media
► Contracts
► Presentations
► User documents
Page 28
Text Mining: Text Link Analysis and Word Clouds
Page 29
Analytics for Trial Exhibits
► Develop demonstratives/exhibits.
Visuals aids are key (avg. retention rate—85% visual vs. 10% oral).
Work with a trial graphics consultant.
Develop visual tools that communicate complex ideas in a simple and
concise manner.
Avoid clutter and distracting elements to keep the jury attentive to the
point at hand, enhancing the stimuli and retentive power for later recall
and deliberation.
Highlight your case strategy with graphics.
Make it interesting to promote retention.
Prepare exhibits large enough to be seen on camera, by jury pool, etc.
Implement psychological impact needed for a later recall.
Remember, the jury can request access to this during deliberations.
Page 30
Sample Waterfall Calculation
1) Identified transactions in date range Step 1
Step 1 Step 2
Step 1 Step 2 Step 3
Final Population Prejudgment
Interest
Total maximum damages, but only if
liability is found
2) Identified all “high-risk” transactions
4) Calculated prejudgment interest
3) Identified all transactions paid to fraudulent vendors
# of Transactions Potential Damages
864 $2,153,723.64
Page 31
Sample Transactional Flow Diagram
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Sample Geospatial Graph
Hotspots of activity are easily identified.
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Sample Social Networking Graph
View supporting documents as
dynamic objects.
Graphical representation of relationships between seemingly
discrete entities.
Epicenters of activity become immediately discernable.
Page 34
Case Studies
Page 35
Energy Regulation: Storm Cost Review and Analysis
Identify and display data anomalies that inform holistic, cost category, vendor, or employee-by-employee analysis.
Ohio Penn. Pennsylvania Ohio Lake Erie
Page 36
Geospatial Damage Analysis
Client Purpose Value provided
Large
drug
store
chain
Develop an approach for
quantifying lost sales; support
client in negotiations with
insurer to expedite recovery.
►Identified stores out-of-scope based on
geographic proximity
►Applied radius searches to facilitate rapid-fire
“what-if” analyses
Public
housing
provider
Prepare a complex,
defensible insurance claim in
light of tight filing deadlines.
►Identified gaps in documentation from
disparate systems, i.e., buildings with
damage which were unreported
Case Study: Here, we plotted a large retailer’s Northeast U.S. stores. Blue dots indicate losses; red indicates
gains in the week following Hurricane Sandy. How we added value:
1. Helped our client flag stores outside of scope (e.g., those within upstate New York State, where sales losses
may not be directly attributable to Hurricane Sandy)
2. Identified “offsets,” such as stores in New England that experienced significant gains. Hurricane Sandy was
originally forecasted to hit this area. Consumers thus stocked up
3. Identified anomalies and data errors within the client’s data (i.e., physically destroyed stores on Long Island
may be erroneously reporting gains)
© 2015 Association of Certified Fraud Examiners, Inc.
Defending Your Work: Bulletproof Expert
Testimony with Forensic Data Analytics
Jared Crafton, CFE, CAMS, EnCE
