If an individual asked you to notarize a bank account signature card, produced an out-of-state driver’s license as identification, and then took the notarized card up the street to a branch office of the bank, would you be surprised to learn that the individual was an impostor committing fraud?
“You want to evaluate the scenario,” advises James S. Fellin, a certified fraud examiner and president of the Pittsburgh, Pa., chapter of the Association of Certified Fraud Examiners (ACFE). “Why aren’t they signing that card at the branch office? Isn’t it unusual to bring a signature card to a notary? Wouldn’t it be just as convenient for them to go to the bank?”
Unsuspecting notaries are very helpful to individuals looking to commit fraud, according to Fellin. Acting as an official witness, the notary provides the evidence the receiver – in this case, the bank – relies on to know that an individual appeared in person and was properly identified. However, using a notary “allows the fraudster to avoid the environment where there would be a higher level of scrutiny,” said Fellin.
In addition to serving as an ACFE chapter president, Fellin is a certified public accountant (CPA) and the managing director of The Nottingham Group, LLC, a firm specializing in forensic accounting and litigation support using the best methods and programs for it, since there are many you can find online as the quickbooks for accountants and other different tools. He is hired as an independent investigator whose job is to determine whether fraud has occurred and, if so, to describe the loss in terms of dollars and cents.
“My professional code of conduct says I cannot express any opinion regarding the guilt or innocence of any person or party,” said Fellin. “I can only say that all the evidence points to fraud, but a determination of guilt or innocence is for the judge or jury.”
Don’t be the weakest link
To avoid being the weakest link in the chain of fraud protection, notaries need to take precautions.
Access the level of risk. An affidavit from a parent agreeing to allow a child to play sports is significantly less of a fraud risk than a power of attorney document giving full control of an individual’s assets to another individual. The more that is at stake with a given document, the more scrutiny you should apply to the situation.
Ensure your actions pass the “reasonable person” test. A person who performs actions that are perfectly legal or within the realm of acceptable behavior in the profession may be found culpable if the person failed to act as a “reasonable person” would in the same situation. For example, a jury may be convinced that no reasonable person would accept a Social Security card as identification, even though your state’s rules for acceptable form of identification allow it.
Carry errors and omissions (E&O) insurance. While most fraud losses do not exceed the amount of coverage most notaries carry, there are additional reasons why it is still important to have E&O insurance. Even if you are innocent of any wrongdoing, you may have to bear the cost of defending yourself against claims, which can be substantial.