GIVEN recent allegations of material misappropriation from governmental coffers, it is particularly timely, if coincidental, that KPMG's second seminar in association with the Institute of Directors (IOD) seeks to unmask "The Many Faces of Fraud".

KPMG senior partner Greg Haycock, IOD chairman Reg Rawlins and KPMG director Ruth Allen gave a joint interview with the to describe the background to the three-part series of "thought leadership" seminars, and to discuss the specifics of the seminar on fraud.

Mr. Haycock described the initial contact and subsequent discussions which brought the seminars to fruition.

"About a year ago, the IOD approached us, and we discussed what the firm could do with the Institute to help raise the level of awareness of various key subjects relevant to Bermuda, not only to our clients but to a wider audience.

"The Institute was looking for a way to be of greater service to its members, from an educational perspective. So, collectively, we came up with the thought of staging these seminars. Because of our facilities and easier access to people, the concept worked well for the Institute."

Mr. Haycock explained that a number of similar joint seminars were held last year, and the success of these events led to an agreement to organise three seminars in 2004. The first event, in April, on the topic of directors' responsibilities, was well received.

(The forthcoming free seminar, to be held at KPMG's Crown House headquarters on Par-la-Ville Road at 8.30 a.m. on May 12, will be co-presented by KPMG senior manager Michael Peer, and leading QC Saul Froomkin. It is being offered to KPMG clients and associates, as well as the general membership of the IOD, and any executives interested in the IOD or the subject area. Interested parties may contact Gwen Higginson at 295-5063 extension 515 for further information.)

"We think that the subject is topical," said Mr. Haycock, "and will be of great interest to local and international business leaders. Historically, people here have thought of fraud as someone stealing money from the till or stock from inventory, but world-wide, we are seeing much more sophisticated fraud these days.

"As a result, KPMG Bermuda has joined with KPMG firms in other off-shore jurisdictions to hire Michael Peer. We hired him collectively because we think there are opportunities to assist our clients in all of these jurisdictions. He is a senior manager with KPMG, and he has permission to work here and in the other islands."

Mr. Peer is a certified fraud examiner who has worked on a broad range of assignments in the "forensic investigations" practices for which he has responsibility in ten countries. Not only have his fraud investigations led to civil and criminal actions against corporate malefactors, but he has also acted as an expert witness in corporate litigation, and provided valuation opinions. KPMG Bermuda bring him in when necessary as part of their normal audit planning process.

"Where we have had specific client needs," continued Mr. Haycock, "we have brought him in to address these needs. He has assisted in some special cases, but there is also a preventative aspect to his work, looking at controlled environments and at circumstances where people may feel that they are at a higher risk of experiencing this kind of activity. He will come in and ensure that the prospect of fraudulent activity is minimised."

Haycock doesn't believe that there is any greater incidence of fraudulent activity in off-shore jurisdictions, but does think that negative off-shore news attracts disproportionate publicity. He believes that the historical record indicated that most supposed offshore frauds, or the thought processes which led to them, originated onshore.

"Part of the (fraudulent) structure may involve offshore activity, but there is much more fraud in the major onshore locations. The international press will more often focus on any offshore component of the problem."

Mr. Rawlins described the winnowing process which led to the choice of the topics covered by the seminars.

"They came out of an executive meeting of the Institute, but first of all, let me add to what Greg was saying. The relationship with KPMG grew out of a need for the Institute to be a bit more active in providing professional development to members, rather than just be a big organisation to which members paid dues.

"In discussing how to provide better educational input, the question of directors' responsibilities came up. In teaming up with KPMG through one of our executive members, Ruth Allen, we came up with these ideas and got this beneficial relationship together."

Mr. Rawlins, a former fire chief who is now a funeral home director, talked of focusing on seminar topics which would be appealing and relevant to the current business environment, and described the positive feedback from the last seminar on directorial responsibility. Some directors had thought, mistakenly, that their role required turning up for meetings and cashing the cheque, without giving adequate thought to the broader dimensions of their duties.

Ms Allen, being on the board of the Institute and a director of KPMG, was perfectly placed to bring the organisations together.

"I sit on the Institute committee for professional development, and because of my role at KPMG, I was uniquely positioned to propose relevant speakers on these topics. Along with Joanne MacPhee, our corporate communications manager, we worked to find people who had the relevant technical expertise, but who could also bring in subject areas from a straightforward perspective.

"We didn't want people leaving wondering what the topic was. We tried to bring it down to earth, to what was actually happening in Bermuda. We wanted our clients and Institute members to get a better understanding of the subject areas. The committee 'brainstormed' the different prospective seminar topics, and it was up to Joanne and me to make it happen."

Ms Allen, a Canadian who has worked in Bermuda for eight years, described the concept of a "thought leadership" seminar as one which encourages, in an extended question time, the sort of critical thinking which will develop a deeper understanding of the subject area.

Mr. Haycock described what he expected to be the general approach to the fraud seminar.

"Michael Peer has suggested that he will make a presentation based on actual cases he has experienced over the years, or cases he is aware of. He will explain how they happened, and the environment that encouraged the fraud.

"He will describe the lengthening list of different types of fraud in the modern age. Financial statement manipulation is one of the biggest potential areas for fraud in Bermuda, as in other places.

"Internet fraud is a big issue, and he will talk about that. The potential for fraud occurring in an organisation may have some impact on the exposure, not only of the person doing it, but also of the organisation itself, without executives being aware of it, and he will talk about that.

"Copyright violations, bribes and kickbacks, conflicts of interest, using assets for personal gain ? they will all be tackled. We expect that Saul Froomkin will talk about the different penalties applicable."

said that KPMG was honoured that Mr. Froomkin had agreed to act as a co-presenter at the seminar. He believed that Mr. Froomkin was the ideal speaker for such an event because, in addition to his 25 years of service to the legal fraternity in Bermuda, he has chaired the International Symposium on Economic Crime in Cambridge, England, since 1984.

Mr. Rawlins hoped that his members will leave the seminar with a heightened awareness of the potential for fraud, and how that will affect their responsibilities as directors.

"One of the things the Institute is trying to emphasise is that we are an active organisation trying to educate our members about substantive current topics. I would like to stress that the seminar is open to any business people who could be affected by fraud, and if there are any executives here who would like to learn more about the Institute or the subject, they will be welcomed."

Ms Allen suggested that a strong response may lead to additional seminars in the autumn, and that the fraud seminar could be an "eye-opener", to get participants out of the mind-set that fraud only occupies certain well-defined and understood parameters.

"The response so far has been very strong. We have people attending from local and international businesses and not-for-profits. There is interest across the board, from executives with financial and non-financial responsibilities, because fraud can affect almost any business.

"Executives should consider how much fraud has been affected by changing technology and its ready accessibility. That's a key to the evolution of fraud."