How can a company investigate and collect evidence of suspected embezzlement? Explains the investigation process and response to employee embezzlement
2024/ 10/ 29
[Real Seminar] Bryan Cave Leighton Paisner LLP/ FRONTEO Dialogue
2024/ 10/ 30
Forensic investigations are essential to resolving and appropriately dealing with fraud and information leak issues that companies face. However, it is difficult for legal personnel to grasp the cost of forensic investigations. The estimates submitted by investigation companies (vendors) come in a variety of formats and items, making them difficult to interpret, and there are cases where the final billing amount is unexpected. In this article, we will explain the average cost of forensic investigations and provide the knowledge necessary to control the costs of forensic investigations.
What is a forensic investigation?
A forensic investigation is a criminal investigation carried out in response to incidents such as internal fraud and information leaks. Digital forensics specifically refers to identifying the cause and evidence from traces of digital data access and data restoration.
The purpose and subject of forensic investigation
By investigating the cause of internal fraud and the route of a cyber attack, it is possible to clarify who is responsible and develop measures to prevent recurrence. To that end, the purpose of a forensic investigation is to uncover evidence of fraudulent activity from data stored on digital devices.
Major incident cases that can be handled through forensic investigation
In companies, forensic investigations are used in a wide variety of incidents.
In the case of leaks of confidential information or personal information, forensic investigations are conducted to identify the misconduct of employees who take the information with them when they leave the company, etc. Forensic investigations are also conducted for misconduct within the company, such as quality fraud, embezzlement, and kickbacks. In such cases, employees may destroy evidence, and techniques such as data recovery are also required.
Forensic investigations are also used to investigate collusion and cartels between companies, as well as fraudulent purchasing. Forensic investigations can also be effective in confirming employee behavior in cases of labor issues and harassment. Furthermore, forensic investigations are used to investigate cyber attacks such as unauthorized access and malware infections, and to investigate the damage and intrusion routes in detail.
What happens during a forensic investigation?
A forensic investigation begins with an "interview." After clarifying the purpose of the investigation, we begin preserving and collecting data as "evidence preservation." Next, we "investigate and analyze" the collected data using specialized analysis tools to clarify the circumstances and route of the damage. Finally, we "report" the investigation and complete the investigation.
Cost and market rate of forensic investigation
Regarding the costs involved when requesting a forensic investigation from an investigation company (vendor), we will introduce an estimate of the cost of the investigation, a breakdown of the costs, an overview of the fee structure, and factors related to the costs.
Cost of forensic investigation
The cost of a forensic investigation can vary widely, from tens of thousands to hundreds of thousands of yen, depending on factors such as the content and scope of the investigation. Furthermore, if it is a large-scale case in which an investigation and report are conducted by a third-party committee, the amount of work and the time required will be enormous, and it is expected to be very expensive.
Breakdown of forensic investigation costs and fee structure
When outsourcing a forensic investigation to an investigation company, the main costs include data hosting (preservation costs), data processing and search (technical costs), and analysis to see if the data can be used as evidence (review costs). Usually, the review process accounts for the majority of the costs.
As a guideline, the cost of a forensic investigation generally ranges from several hundred thousand yen per device. The cost is calculated per device, such as "per computer," or per amount of data, such as "per 1GB."
Some vendors may quote with few items and state the price as a "set of tasks," without indicating the "unit price x estimated quantity."
Variables in forensic investigation costs
The cost varies depending on the content and complexity of the investigation. For example, if the investigation focuses on basic investigations such as log analysis and data recovery, it will cost more to track a wide range of networks or investigate a large-scale data leak. In addition, different investigation companies use different techniques, so this aspect also affects the cost.
Duration of forensic investigation
The time required for a forensic investigation can vary greatly depending on the number of devices being investigated, the items being investigated, and the purpose of the investigation, from a few hours if the investigation targets a single PC to several months depending on the scale and complexity of the case.
Why forensic investigations are so expensive and what to look out for when checking estimates
The reasons why forensic investigations are so expensive include the cost of tools (equipment), labor costs, and low demand.
It costs a fair amount of money for an investigation company (vendor) to develop and maintain equipment for data analysis so that it can handle any type or scale of case. In addition, forensic technicians are required to have specialized knowledge and experience in IT-related areas such as data-related equipment and networks, which also affects labor costs. Since forensic investigations are required only when fraud has occurred, there is not much demand for them, and the cost per case tends to be high.
However, you should be wary of investigation companies that offer low estimates. Among the various processes introduced in the breakdown of a forensic investigation, the quality of work such as initial data preservation and collection is directly linked to the quality of the overall review. If the technology and quality of data handling in the initial process is insufficient, the cost of the review may inadvertently inflate, and the final cost may be significantly higher than the estimate.
How to Choose a Forensic Investigation Company
As mentioned above, the cost of a forensic investigation varies greatly depending on factors such as the workload of engineers involved and the amount of data. Here we explain the key points to consider when choosing an appropriate investigation company (vendor).
How the research company calculates its fees and whether the fees are set appropriately
Forensic investigation costs include data processing and search costs, analysis and analysis (review) of whether evidence can be obtained, and data hosting, but usually the review process accounts for the majority of costs.The final amount varies greatly depending on the scope and contents of the investigation, and ranges from tens of thousands of yen to several million yen.We recommend choosing a vendor with a clear cost structure, including additional charges.
In addition, awareness of using AI in investigations has been spreading recently, and using AI to dramatically improve the efficiency of investigations can bring significant cost benefits. When collecting quotes, be sure to ask for the total cost including AI and reviews, and carefully compare not only unit prices but also overall costs.
The experience, expertise and skills of the research company
The outcome of an investigation depends on the proficiency of the engineer, the tools (equipment), etc. Companies with a track record of numerous investigations will have accumulated high technical skills and data recovery know-how, and will be able to handle even large-scale or special investigations with the most appropriate method for each case and at a reasonable cost.
In addition, advanced data recovery and analysis requires the proficiency of engineers and specialized tools. Recently, awareness of using AI (artificial intelligence) in investigations has been spreading, and using AI to dramatically improve the efficiency of investigations can bring significant cost benefits. When getting a quote, ask for the total cost including the use of AI and reviews, and carefully compare not only the unit price but also the overall cost.
Survey company reputation
You can check the reputation of a candidate research company by referring to companies that have used it.We will ask the research company about the companies and lawyers that will serve as references, and hear the actual reputation of the research company from those companies and lawyers.Although it takes time and effort, it is a recommended method for selecting the best company that matches your company and project.
Forensic investigations: "FRONTEO" with overwhelming track record and in-house AI utilization
As a leading forensic company in Japan, FRONTEO has been involved in fraud investigations since its founding in 2003, including contributing to the establishment of the Digital Forensic Research Society. FRONTEO's strengths are its track record and accurate investigative capabilities using its in-house developed AI engine.
Research results and the technologies and know-how based on them
With over 20 years of history and a track record of more than 2,000 fraud investigations, FRONTEO's forensic technology is often used by "third-party committees" in scandalous cases that cause a stir in the public. With our accumulated know-how and high reliability, we have contributed to solving the problems of many companies.
Prompt and flexible response achieved through in-house developed AI
KIBIT, our in-house developed AI engine that is used for analysis, is a simple and high-performance algorithm that, unlike other products, requires a small amount of training data, can be implemented in a short period of time, and requires light calculations, making it advantageous for forensic investigations. It can be implemented quickly and can be flexibly customized for systems and special data developed by companies. Even for large-scale cases, we will use our know-how and technology to conduct accurate investigations. Please contact FRONTEO for forensic investigations.
