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In Fraud and Corruption investigations, Artificial intelligence and data analytics save time, says IT expert

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When a legal team needs to find the facts behind fraud and corruption allegations in a government investigation, technology can drive substantial new efficiencies.

By filtering and evaluating vast amounts of information, artificial intelligence (AI) can effectively sort text messages, audio files, e-mail, and other unstructured data into manageable groups; identify potential relationships between parties accused of fraud or corruption; and recognize patterns of frequency or timing, which may support a client’s defense.

Technology-assisted data analysis can provide the diligence and reliable quality control needed to provide the government with conclusions they can trust.

In this interview, a Partner at Hogan Lovells in Washington, D.C., Peter Spivack, explains how the process of gathering, sorting, and evaluating enormous volumes of data has changed, and why skilled human intelligence is likely to remain a required component of an accurate analysis. Excerpt

Where does the data come from in a government investigation, what are you looking for in that data, and how do you use it in your case?

When we do investigations for a client, we’re trying to determine the facts. There’s usually a very vague allegation that comes in, maybe through an internal whistleblower hotline or a subpoena from the government. We have a list of documents that a government entity is requesting, a complaint that somebody called in to a hotline, an anonymous e-mail that reports some allegation, or a news article.

So there’s a certain amount of information that may show us the ballpark, for example, but we don’t know what row and what seat we’re sitting in. We’re trying to determine if there is an issue, and whether it’s the same issue that’s been identified. If it’s a government investigation, what’s the government looking at? What’s the strength of the evidence? What are the legal or regulatory defenses that we can use to advocate? What’s the client’s exposure? And how do we explain this to the in-house general counsel, chief compliance officer, board, audit committee of the board, and outside auditors, to give them an assessment of what the risk is?

And if we’re going in to see the government, how do we explain that we’ve done an investigation that they can rely on and found the relevant facts, or have taken sufficient steps that, based on the sources of information available to us, we can rule things out? Because they’re not going to simply say, we trust you and if you tell us you’ve looked at five e-mails, that’s all you needed to do. We need to be able to tell them that we’ve looked at the whole picture.

Then there are other constituencies that drive investigations, especially for big public companies. Are they trying to get a line of credit? Are they looking at a possible merger where someone may ask them, as part of due diligence, do you have any issues? If you do, what have you done to look at the issues, what steps have you taken to resolve them, and what confidence do we have in the result?

There’s a variety of things that drive us to try to determine what the facts are, depending on the situation, and sometimes they are present all at once.

After determining the approach to the investigation and the data you need, you then have to review the data sources. Where is that data stored?

The way companies keep data is basically structured and unstructured. Structured data is essentially kept in an accounting or enterprise resource planning (ERP) system, such as SAP or Oracle. The data housed there is a record of all the transactions they’ve undertaken, and we’ll work with a forensic accounting firm to define a set of data analytic tests that we can run.

Those tests can be a variety of different parameters we can flag that can be used to show basic fraud or corruption criteria. For example, are there round-number transactions? Are there sequential invoices to the same vendor? It may seem strange that the vendor is getting Invoices 1, 2, and 3, when it’s a vendor that ostensibly would have many other customers. Is there a mismatch in the location of the work and the actual route of payment? Maybe the work is being done in Colombia, but the payment is going to France. We may need to ask for an explanation.

You run those parameters across structured data and come up with transactions that can be tested by taking what’s been journaled in the accounting system and looking at the underlying documents. If you have a contract, does the contract description match the payment description in the system? If there are deliverables under the contract, are they general and vague, or measurable and specific? Can we determine that the transaction has actually taken place?

You can narrow the scope of those data analytics if you’ve got a specific question. For example, we think that this consultant is allegedly paying bribes to government people, so we’re going to look at that consultant, the contract, the signatories on the contract, and the description of work under the contract. We’re going to see what evidence there is of the work. We’re going to look at the payment terms and say, does this seem like something that is commensurate with the value being delivered? Is it a fair market value? We’re trying to hone in and test the bona fides, so to speak, of that contractor business arrangement.

Take an example: one of our clients paid a lot of money to hire a well-known lawyer from another firm. But if you looked at that lawyer, you’d say, he doesn’t really seem to have expertise in that area. So how do you explain that? Maybe there’s a legitimate explanation. But it’s something that comes up and so we say, we want to look at that further. It doesn’t necessarily give you the answer, but it focuses things for you to look at.

What is unstructured data, and how do you use them?

That’s basically the way that people use communications systems. It’s text messages, e-mails, messaging apps like Viber and WhatsApp, and other types of point-to-point encrypted communications. There’s been an explosion of unstructured data — so much more than there used to be.

My first investigation at Hogan Lovells was for a company that was under investigation for promoting its product off label. They had human growth hormone that had a very specific use, and the government was concerned that they were promoting it widely for other unapproved uses. I was literally looking at hard-copy documents and putting them in Redwelds, depending on which paragraph they were responsive to. That was in 1998. Twenty years later, we’d never do something like that, because we’ve gone from 100 boxes of documents to 200 terabytes of data, and one terabyte is enough to fill the U.S. Library of Congress. So there’s got to be some way to manage all that data and filter it.

How do you start narrowing down data?

The first step is collection: you’ve got to go out and actually get it. That means, looking at the e-mail system. If we think of unstructured data as a series of concentric circles, it also means going out one ring and getting devices that people use, like laptops, and imaging their hard drives. And going out another ring if you can, depending on data rules, and collecting peripheral devices — smart phones, external drives, USB sticks — that store data.

So now you have this immense amount of data, more than any team of lawyers could review if they reviewed every single document for the rest of their lives, their children’s lives, and their children’s children’s lives. It’s clearly an unmanageable amount. The only way to address that is to try to process it and get it all in a form that can be managed and filtered. You try to exclude things that may be very data heavy but are of little value: program files, photographs, things that are really large that suck up data storage space. Then you have a set of data that you try to filter.

What techniques do you use in filtering?

The most basic technique is search terms. You come up with a list of words related to the investigation and apply them across the data to see if there are hits for documents that contain those words. Then you’re reviewing them at first and second levels to see if they’re relevant to the investigation. That sounds good, except you may only have narrowed your ballpark to the club-level seats; you’re getting a tighter ring, but it’s still an enormous amount of data.

There are other techniques that can be used as well, such as an algorithm. It’s called technology-assisted review. You’re taking a set of documents and reviewing that set with a subject matter expert on the investigation. They’re going through a thousand documents and saying, this one is relevant, this one is not. You’re essentially training an algorithm and honing it on the computer so that it can then give you a probability-based set of outcomes for the potential relevance of documents. The probability stratifications can be in 10 percent levels, so you have buckets, from a very unlikely probability bucket to a highly likely probability. You might be able to review the first two buckets, so you screen out a portion of your documents that way.

There is nothing available yet that is really AI, but there are ways of doing concept searching with certain applications. One that we use is called Brainspace, and it’s basically a sophisticated form of the algorithm that groups concepts. You can run a set of documents through Brainspace and decide what concepts to look for. If you want to look for “office leases,” it will group documents around that. You get a set of documents that you can then review for the concept of “office leases,” whereas if it’s payments to a particular third party, you can group them around that concept as well. That gives you more ability to target and focus.

A lot of times we’ll run different techniques as a way to cross reference. That helps get through larger amounts of data at a higher and more efficient rate. But at the end of the day, it still depends on human evaluation and intelligence to look at a document and say, this is important, as it’s related to things that we’re talking about, or there’s a particular issue here.

While we’re doing that, you have to remember it’s a dynamic situation, so there may be something that comes out of the transaction and data analytics that then says, wait a minute, we really want to look at this company, so let’s run that as a new term through whichever technique we’re using. Or we may put these documents together for interviews. We have a set of documents, we go to talk to a witness and say, what happened? And they tell us but then they raise another issue. That gets fed back into the review of documents and transactions to see if there is anything here that we have to be concerned about or if a new issue has come up.

Or there might be another whistleblower e-mail that comes in, competitor complaint, or newspaper article. So a lot of times, it’s a dynamic process. You don’t have just a static set of issues that you’re looking at. One of the fun things about it is that there’s this constant evolution.

Who is a typical client in this scenario, and what’s the primary benefit of this approach?

This is a way of making investigations more efficient, and efficiency means cost effectiveness. Clients are getting more and more comfortable with data and techniques of analyzing data, to the point where some clients in their compliance programs not only have lawyers and accountants, but also data scientists. A big multinational client, with tens or hundreds of thousands of employees, has people on staff who can design the most current state-of-the-art search engines, train algorithms, and use them as a way to leverage resources.

It’s the outer edge of clients who have that capability, and they have to be big enough and operate in enough countries that they’ll use it. If they’re not, then we work with forensic technologists, both in-house and at forensic consulting companies. They’re very familiar with different search techniques and technologies and the way to leverage them to process and filter larger and larger amounts of data.

There have been significant advances in technology in the last few years, and more and more interest in it. A lot of it is because of the ever-increasing amounts of data, and as a result, ever-increasing cost. There have to be ways to get costs to a controllable, reasonable level. So we have to know how to do that and work with people who understand and are comfortable with the concepts. We have to be able to articulate both to the client — if they’re unfamiliar with it — and to the government — to defend it — what we’re doing, how we’re doing it, and why it’s reliable. The government uses these techniques as well, so most of them are very familiar with it. They just want to make sure there’s a sufficient level for liability.

About Peter S. Spivack

Peter Spivack is one of the most experienced members of the Investigations, White Collar, and Fraud practice area, and served as a global co-leader of the practice for six years. His experience in the criminal arena includes antitrust, environmental, Foreign Corrupt Practices Act (FCPA), government contract, and healthcare matters. Peter has three decades of experience working with multijurisdictional investigations, including matters involving allegations of bribery and corruption under the FCPA, the UK Bribery Act, and other anti-bribery laws.

GrassRoots.ng is on a critical mission; to objectively and honestly represent the voice of ‘grassrooters’ in International, Federal, State and Local Government fora; heralding the achievements of political and other leaders and investors alike, without discrimination. This daily, digital news publication platform serves as the leading source of up-to-date information on how people and events reflect on the global community. The pragmatic articles reflect on the life of the community people, covering news/current affairs, business, technology, culture and fashion, entertainment, sports, State, National and International issues that directly impact the locals.

Transport

WIMAfrica and SIFAX Group Partner to Champion Gender Equality in Maritime Industry

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WIMAfrica and SIFAX group
L-R: Mrs. Catherine Abuah, Group Head, Marketing, SIFAX Group; Mrs. Wunmi Eniola-Jegede, Group Coordinating Director, SIFAX Group; Mrs. Carolyn Ufero, Continental Vice President, Women in Maritime Africa; Mrs. Rollens Macfoy, President, WIMA Nigeria and Ms. Jesuyemisi Odeyemi, Group Head, Legal, SIFAX Group at the SIFAX Group Headquarters, Lagos, during a courtesy visit to discuss a partnership aimed at advancing gender equality in Africa’s maritime sector, pictured at the SIFAX Group headquarters on November 12th, 2023.

Women in Maritime Africa (WIMAfrica), in a significant step forward for female representation in the Maritime field, held a strategic meeting with SIFAX Group at the SIFAX headquarters on November 12th, 2023.

The two organizations aim to foster mentorship, sponsorship, and skills development programs that will empower women to pursue and excel in maritime careers, where female representation remains below 1%. Key figures from WIMAfrica, including Continental Vice President Mrs. Carolyn Ufere and Nigeria’s President Mrs. Rollens Macfoy, emphasized the need for corporate partnerships to expand access to training and professional networks for women. SIFAX’s Coordinating Director, Mrs. Wunmi Eniola-Jegede, expressed the Group’s commitment to gender inclusivity and highlighted the presence of women in leadership roles across its various sectors.

In closing, WIMAfrica extended an invitation for SIFAX Group to support its upcoming conference in Lagos, themed “New Economy and Moving Forward for the Next Generation,” which seeks to inspire young women to explore maritime career paths like engineering and marine security. The collaboration between WIMAfrica and SIFAX Group marks a crucial move toward an inclusive future in Africa’s maritime industry.

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Transport

Gov Mbah Flags-off dualization of 43.7 Penoks-Abakpa Nike-Opi-Nsukka Road

By Gold Obikeze

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Penoks - Abakpa by COMAG by Peter Mbah-

… Mbah is godsent to Nsukka zone- Igwe Asadu

… You’ve proven yourself more Nsukka than any Nsukka man- Ezenta Ezeani

… Enugu has suddenly become a reference point for transformational projects – Dennis Agbo

… We’ll deliver on schedule and quality – Contractor

Governor of Enugu State, Dr. Peter Mbah, has flagged-off the construction and dualisation of the 43.7km Penoks-Abakpa Nike-Ugwogo-Nike-Opi Nsukka Road with streetlights and 18-month completion timeframe in line with his administration’s vision to make the state the premier destination for investment, business, tourism, and living.

Speaking during the flag-off ceremony at Opi attended by political heavy weights and leaders of Nsukka Zone, Mbah stressed that the the project, which includes straightening the of many bends, would drastically reduce accidents and criminality on the road.

“In the build-up to the election and in my acceptance speech after my election, we made a pledge that we are going to dualise the Penoks-Abakpa-Ugwogo-Opi-Nsukka Road because . we realised from the outset that if we had to grow this economy to an exponential height, no section of this state should be left behind, more so an economic hub like Nsukka Zone. So, all we are doing here today is connecting those dots,” he said.

Penoks - Abakpa by COMAG by Peter Mbah-
Governor at the flag-off ceremony

Mbah regretted that a trip from Enugu to Nsukka presently takes over an hour, hence the decision to do the 3.6km from the Penoks Junction all the way to the T-Junction flyover in addition to the 41km Abakpa Nike-Opi Nsukka Road to reduce travel time to about 30 minutes and make it possible for the people to comfortably live and work in Enugu and vice versa.

He also noted that his administration’s grassroot-based development and economic model placed the Enugu North Zone at an advantage.

“We are doing projects based on electoral wards. Guess who are the greatest beneficiaries of this model? It is the Nsukka zone. You have 102 electoral wards. That means you will end up with 102 smart schools, 102 Type 2 Primary Healthcare Centres, over 1,000km of roads based since we are additionally going to do at least 10km of roads per ward,” he remarked.

In his remark, the traditional ruler of Edem-Ani and Chairman, Enugu State Traditional Rulers Council, Igwe Samuel Asadu, said, “The people of Nsukka cultural zone and Enugu North Senatorial District never imagined the possibility of this life-time project. The only way we can pay you back is that you do not need to come to campaign here for your second tenure because we are all going to do that for you. You are Godsent to the people of Nsukka, Enugu State and Nigeria at large.”

Also speaking, the Deputy Speaker of the Enugu State House of Assembly, Hon. Ezeani Ezenta, noted that the governor had shut the mouths of naysayers.

“I feel emotional because a lot of things were said during the election. But today, by your good work, you have proved yourself even more Nsukka than any other Nsukka man,” he emphasised.

On his part, former Deputy Governor of Enugu State, Chief Okechukwu Itanyi, described the project as “gigantic, huge, unbelievable and marvelous,” noting that it would open Nsukka Zone and the state to the world.

“This is a legacy project. Your name will never die. Your spirit shall never die. We will continue to give you support,” he added.

Other speakers, including the Chairman of Nsukka Nsukka LGA, Hon. Jude Asogwa, former Secretaries to the State Government, Dr. Dan Shere and Prof. Simon Ortuanya, among others extolled the initiative.

Significantly, in a press statement he personally issued on Monday, Member representing Igboeze North/Udenu Federal Constituency on the platform of the Labour Party, Hon. Dennis Agbo, described the road as “a transformational project, which will greatly facilitate commerce, ease mass transit and evacuation of farm produce by our hard working farmers as well as fight crime and criminality.“

“Our governor has clearly demonstrated his uncanny ability to see and unleash the enormous potential of our dear state and people. It is heartwarming to note that Enugu has suddenly become a frontline state and a reference point for transformational project initiatives,” he stated.

The Member representing Nkanu East/Nkanu West Federal Constituency and Leader of the Enugu State Caucus of the National Assembly, Hon
Nnoli Nnaji, expressed the total delight of the federal lawmakers at the governor’s development initiatives and pledged their total support for him to move the state forward.

Meanwhile the CEO of COMAG Construction Company, Cosmas Agu pledged to deliver a high quality project and on schedule.

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Finance

Flutterwave Activates American Express Payments for its Merchants in Nigeria

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Olugbenga GB Agboola, CEO Flutterwave
Olugbenga GB Agboola, CEO Flutterwave

Flutterwave, Africa’s leading payments technology company, has announced today that its online merchants in Nigeria can now accept American Express payments.

American Express Card Members – with consumer, business, or corporate cards – will be able to make payments directly to e-commerce businesses using Flutterwave in Nigeria.

This service will also be available to Flutterwave merchants in other countries including Tanzania, Rwanda, Ghana and Uganda in the near future.

This collaboration facilitates online transactions and offers a range of benefits for both merchants and online shoppers:

  • Flutterwave merchants can attract business from a new customer base of American Express Card Members in Africa and around the world. This includes consumers with personal cards and spenders with business or corporate products. Terms and conditions apply.
  • For shoppers, there is more choice when it comes to being able to select their preferred method of payment when transacting with Flutterwave merchants. This collaboration strengthens the American Express global network and increases the number of locations across Africa that can be used by American Express Card Members to purchase a range of different goods and services.

Speaking on the development, Olugbenga ‘GB’ Agboola, Founder and CEO, Flutterwave, said:“At Flutterwave, we’re always looking for ways to connect the world to Africa through payments. This is one of our initiatives to ensure that more people across the world can pay using Flutterwave in Africa. We understand the value of providing shoppers with payment methods that work for them, as well as helping businesses to expand their customer bases. This collaboration also provides more options of where to shop and what to buy to American Express card holders across the globe. By offering American Express as a method of payment, Flutterwave will make the payment process faster and simpler for American Express card holders, and improve the experience for e-commerce businesses using Flutterwave, helping them to start locally and sell globally.”

On his part, Briana Wilsey, Vice President and General Manager of Global Network Services EMEA at American Express, said: “American Express continues to expand in Africa to enable greater payment choice for businesses and consumers. Through the agreement with Flutterwave, a trusted payment provider, we are giving e-commerce merchants in Nigeria the opportunity to reach American Express Card Members around the world. The collaboration is a win-win because it also increases the number of places where our Card Members can use their Cards in Nigeria.”

Flutterwave and American Express share similar visions; to enable businesses across the world to expand their operations in Africa and other emerging markets through a platform that enables local and cross-border transactions via one Application Programming Interface (API).

Flutterwave has processed over 630M transactions in excess of USD $31B, serves global and African customers like Uber, Air Peace, Bamboo, PiggyVest, and across various industries. On the other hand, American Express is a globally integrated payments company, providing customers with access to products, insights and experiences that enrich lives and build business success.

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