New CFE Finds Fulfillment in Anti-Fraud Industry After Career in Law Enforcement

March 2019

ACFE Member Profile
Scott Lake, CFE
Audit Consultant
State Farm

 

Scott Lake, CFE, has a history of helping people. Before he joined State Farm, where he is an internal audit investigator, he worked more than 15 years in law enforcement. “Whether in law enforcement or corporate fraud investigations, I have often been most proud of my work when I realized the outcome had purpose — that it really helped someone right when they needed it,” he said. He recently earned his CFE with the 90-Day CFE Exam Challenge and enjoys taking RV trips with his family in his spare time.

How did you become passionate about fighting fraud?

I’ve been involved in informing and protecting the public for almost 20 years. I have a law enforcement background and spent several years working undercover narcotics assignments. Through investigating drug crimes, I became exposed to the secondary ways that money laundering and fraud were used to support those particular criminal activities. The skills I gained interviewing drug-dealing suspects allowed me to understand the psychological reasons people mishandle money and take advantage of others. This sparked an interest in fighting fraud. My professional journey into the field of corporate fraud investigation is fairly recent, as I entered into the private sector and became an internal audit investigator in 2017.

What is one of the biggest lessons you have learned since entering the fraud prevention field?

Continual learning and willingness to collaborate and share information are prerequisites for success, especially as we battle new fraud methods and advise organizations how to protect themselves against modern threats. As processes and technologies advance, fraudsters will undoubtedly find new ways to manipulate systems for their own benefit. It is up to all fraud fighters to proactively watch for those patterns so we can collectively learn to recognize, detect and interrupt fraudulent activity.

What steps led you to your current position at State Farm?

Transitioning to the corporate world is a somewhat rare move for those in law enforcement, and can be difficult. However, I was mentally ready for the new professional landscape and deliberately sought positions that matched my skills and experiences. State Farm has a large presence in my home area, and I was naturally drawn to the “good neighbor” reputation and stability of the company. While researching dozens of job postings over several months, I came across the opening for the internal audit investigations team. I had no prior exposure to the internal audit profession, yet my prior experience and education was a great match and I felt like the job description was written just for me! I knew it would be a good fit, mutually benefitting the company’s needs and my own professional objectives.

What are some of the unique challenges you face in the insurance industry that other CFEs might not know about/understand?

The insurance and financial services industry is regulated by multiple levels of government that require adherence to laws, policies and procedures — in addition to those established by the company itself. With State Farm, this oversight occurs not only with insurance, but also bank and securities products that the company offers. State Farm has approximately 58,000 employees and 19,000 independent contractor agents (along with thousands of agent team members who are employees of agents) nationwide. Internal audit seeks to educate and mitigate various fraud issues, and it is tasked with resolving fraud complaints across a wide span of regulatory, legal, corporate and State Farm associate matters. Investigators must be able to quickly acquire relevant expertise in order to properly examine fraud concerns in a timely manner. As a relative newcomer to the industry, learning and understanding those operational realities has been challenging, but extremely rewarding.

What is a memorable case or project that you have worked on?

My response to this is broader in nature, reflecting on an important lesson I’ve learned while helping others solve problems: the little things matter. Those realizations have sometimes come in surprising ways, perhaps after completing a task that was routine or insignificant to me at the time. But to the person I was helping, a small act of service had big meaning.

As a police officer, I often considered my most important job to be putting “bad guys” in jail. Of course that is a crucial part of public safety, but the greatest appreciation I received from citizens came from entirely different actions. I recall the enthusiastic praise I received when unlocking a vehicle for an owner who locked their keys inside, or finding a kid’s stolen bike and returning it to him at his house, or checking an open garage overnight and leaving a business card to let the homeowner know everything looked okay. You would have thought I just cured a major disease based on the type of positive feedback I received after taking those small extra steps.

I’ve had similar experiences working fraud cases on the corporate side. During a recent investigation of internal fraud, I had several fact-finding conversations with a woman. Throughout my detailed discussions with her, she was extremely grateful for my time and the specific questions I was asking. Not because the investigation was complete, but because I took the time to actively listen, affirm her concerns and provide some possible solutions. It really mattered to her, perhaps even more than the final outcome.

I have been on the receiving end as well with my department leadership, who make deliberate efforts to highlight the successes of our unit and showcase the positive impact we have on real people and the improvement of company processes. All those little things add up to big things.

You recently became a CFE through the 90-Day CFE Exam Challenge. What led you to go on that journey?

I joined the ACFE with the specific goal of earning the CFE credential, a desire that was reinforced after attending training seminars at the local chapter level. At first I tried the CFE Exam Prep Course on my own, but got distracted and lost momentum after only reviewing a small percentage of the content. I am a visual learner and enjoy group collaboration. I realized that a more structured process would be a much better route to success — enter the 90-Day CFE Exam Challenge! The extra study suggestions, additional access to the online community and that specific goal date on the calendar kept me motivated to buckle down and stay on track. I especially enjoyed the staff guidance and peer accountability through the ACFE Community message boards, which have become one of my favorite networking resources included with ACFE membership. I consider the CFE credential to be a foundation that will allow me to stay current and build upwards throughout my fraud investigation career.

What activities or hobbies do you like to do outside of work?

My family’s favorite warm weather pastime is RV camping. In those road trip movies where everything possible goes wrong — we’ve had those moments! But the destination is always worth the journey, and vice versa. We have seen many amazing places around the Midwest U.S., and plan to travel even further on future RV adventures. I am also a musician (primarily drums/percussion, although I dabble in other instruments) and volunteer regularly in that capacity at my church. Music is a big part of my life overall, going all the way back to the college marching band where I met my wife more than 20 years ago.