Great Women In Fraud

Episode 17 Melissa Goddard CFE CCA CCP CRIS CICA PI

January 18, 2021 Kelly Paxton, CFE
Great Women In Fraud
Episode 17 Melissa Goddard CFE CCA CCP CRIS CICA PI
Chapters
Great Women In Fraud
Episode 17 Melissa Goddard CFE CCA CCP CRIS CICA PI
Jan 18, 2021
Kelly Paxton, CFE

Today's guest is in my own backyard but we had to be COVID safe so we couldn't do this episode in person.  Melissa Goddard is another Great Women in Fraud and she specializes in construction fraud. With a booming construction economy in Bend, Oregon she is keeping busy. We talked about the nice lady who baked cookies everyday but rationalization got the best of her. We also talked about how much heartbreak happens when an embezzlement happens.  Next time I hope we can record in person.  

Show Notes Transcript

Today's guest is in my own backyard but we had to be COVID safe so we couldn't do this episode in person.  Melissa Goddard is another Great Women in Fraud and she specializes in construction fraud. With a booming construction economy in Bend, Oregon she is keeping busy. We talked about the nice lady who baked cookies everyday but rationalization got the best of her. We also talked about how much heartbreak happens when an embezzlement happens.  Next time I hope we can record in person.  

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Kelly Paxton: We are here today. And even though we're on zoom. I have had the pleasure of meeting Melissa Goddard in person in Bend, Oregon about two years ago and we haven't met since  because of Covid.  but I'm so. And the reason I met Melissa was I used LinkedIn, like I always do.  And I put CFE Bend, Oregon, and you were the first person to pop up. I reached out to you and we have been in contact, ever since. So, Melissa. Why don't you tell us a little bit about your background and the type of you know fraud work, then you get to do.

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Melissa Goddard: So my main business is focused on construction. I do a lot of construction fraud and construction auditing. I also do a lot of construction training for contractors owners and people in the construction industry as far as preventing fraud. So I do a lot of seminars, I am one of the trainers for the contractors board. So I do some fraud training for contractors and they actually get contractors board credit for taking my courses, which is fantastic because it gives them a reason to be there.

So I do a lot of that work. I also do other fraud examinations. I like to do different things that I focus most of my business on construction fraud.

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Kelly Paxton: Well, and Bend. One of the most beautiful places in the United States.

Is growing and they say it's like a zoom town because there's so many people. It's like if you're going to be working on zoom. Why don't do it where you know you can ski or hike or whatever. And so you get a lot of people that you know get to you get to spread the word easier.


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Melissa Goddard: I do, I do. It's absolutely beautiful here... Everything here is growing like crazy. So we're able to spread the word here, which a lot of the contractors here don't get the same benefit is contractors in bigger cities like Portland those kinds of markets. So being here in Bend and being able to go out and talk to contractors here and they are finally getting the same benefit as those bigger contractors or contractors in bigger cities.


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Kelly Paxton: Right. And we were saying before we hit recording is that, you know, I mean,

Covid has obviously decimated lots of things and then other things have gone really really well construction like said in Bend is growing. And then we have the ACFE that has come out and

 You know there's been three reports about how fraud is going to be increasing during Covid and post Covid. What are your thoughts about fraud encoded specifically in the construction area.


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Melissa Goddard: I think it kind of depends. I think that there will be an increase, it'll be interesting to see where those increases are. I can't say that I have seen an increase in one area already, which is kind of interesting. So in the minority business certification area. I've already had three calls about minority business woman owned business certifications that we're fraudulently getting business saying they were a minority or women owned business when they really weren't and I had not had a call before code that hit  so this is kind of a new area, at least for me. So this specific area. Seems to be ramping up now whether thats related directly to Covid it or if that's because there's more of a focus of people or more of a focus of government giving work to minority owned businesses and women owned businesses, instead of citing funds for those businesses. I'm not sure, but that definitely is an area where I all of a sudden, I'm getting calls on those specific type of products.


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Kelly Paxton: That's interesting because I saw a kind of a big one of those happening in Portland. But then I also saw another one happening outside of Bend  that made the newspaper. So, and I hadn't thought of that. I have considered doing you know women owned business and I just haven't gotten to it, but yeah, that's, that's, that's an area fraud. I haven't really thought about, but I've seen it in the news so interesting to follow on

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Melissa Goddard: Yes, yes. And I'm a woman owned  business. And so there's a lot of certification steps you have to take. And so for somebody to actually go through and say that they're certified and this is in the construction world and you know to get all the way through those all the way through, you know the process and nobody ever verify that they were actually a woman owned business or minority owned business or veteran owned

 Is concerning but for somebody actually say that they were certified and and that is, is interesting that we're starting to see a ramp up in that area.


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Kelly Paxton: Yeah, you know, um, so how did you get, can you tell me your first fraud case. Do you remember your first fraud case ever


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Melissa Goddard: I actually do. So I was lucky enough when I was first taking my master's program. I was lucky enough that a  regional CPA firm in Tucson, Arizona, took a chance on me and they hired me because I was so excited about pride and they had a consulting portion of their  CPA firm and so I worked on a I was actually working in the audit department at the time they sent me our audit and I was doing the essay s 99 questions with the internal auditor and she was giving me some strange answers. So we were talking about the

One section of the business. I don't want to go into too much detail. So she was talking about are we were auditing one section of the business and she kept saying every time ask your question. So you're talking about this main part of the business right

 And I was like, yes, but it's very odd that she kept pointing me to that. And so when I got done with the questions with the internal auditor. I called my boss. And I said, I think something is going on and I'm brand new at the whole fraud. I just started my master's in fraud.

 And he's like, What makes you say that. And so I told him, and I said, I just have this feeling something is off. Something is not right. And so he said, Okay, well, I'll call over there and see what's going on and see if you know i'll talk to the CFO.

 And they had a long standing relationship. He said, I'll see. I'll see what I can find out he called over to the CFO and the CFO told him that they suspected one division of business had an issue which they did. And so that was so when they found when he found out that, you know, there was a fraud issue he pulled me off of the audit and I got to do the entire fraud case.

All the way through, you know, presenting everything to the police everything. It was so much fun. I was in on the interrogation part of it. I mean, he walked me through the entire case, it was the greatest feeling the interrogation part was eye opening and because it was a little man that I had to interrogate so that was hard on me because I had never been through that. But it was a great first experience.


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Kelly Paxton: That's so funny. You guys can't see Melissa right now, but like, you know, her eyes are lit up. She is animated. This is like, this is what people think of fraud and you remember that sort of first case or like, I mean, I remember  my first case, and it's and then you get the bug and would you say that you had the bug ever since.


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Melissa Goddard: Oh yes, absolutely. Absolutely. That was. Yeah, definitely.


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Kelly Paxton: The fraud bug how terrible. Once you get it, you can't see, there is no antibiotic. There is no vaccines explanation for it or anything. Once you get it, you kind of keep with it so early people that I'm around because it just seems like everyone loves to talk about it even I was on a call earlier earlier this morning with the CPA in Canada and immediately he had looked at my stuff. And it turns out that his sister in law had embezzled and went to prison for stealing money and he's just like, this is such a crime that you know affects everyone and fraud does really affect everyone because and

 I was listening to the Tim Ferriss podcast last week with Jim Loehr, who's an amazing coach and I always tell my clients and you can, you know, we'll talk about this. But go back to the business sell more houses build more houses sell more widgets.

 You can replace the money. You can't replace the time. But then I was listening to Jim Loehr. And I kind of think there's an even this is even stronger. It's the energy of fraud from when you are a victim that can really make your experience so horrific because it's the time sink But it's the bad juju energy. I mean, can you talk about any of your victims who went through this and you know not maybe physically crying on your shoulder, but the amount of hand holding that has gone on that you've done.


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Melissa Goddard: Oh, absolutely. Absolutely. I had a case that I worked on. And this was a construction case and a woman.  Not only defrauded her husband's best friend, but she defrauded her husband, so she had decided she did the books for both her husband's business as well as her husband's best friends business. And she had decided that she was going to leave her husband, and so she started embezzling from both businesses.

 The realization from both sides, you know, the husband's best friend, the husband's best friend's wife, which was her best friend. And the husband and these people that did everything together. I mean,they were, they were best friends. And so, you know, they did all of their trips together and everything and just you know, walking that these people through what happened and how it happened. And just seeing the devastation that it caused was it gave me nightmares. There were many, many tears that I shared with them and as a fraud examiner, you know, you're, you're trying to be

 You're trying not to take a side you're trying to be as much as you can. But when you are dealing with people. That are that heartbroken over a fraud. You can't help but be a human.

You can't help it. You can't help that walk through that pain with them and you're the one presenting these facts to them and you know it. They are facts, but they also are human facts and they affect real people in real time and you can't help but be a human about it.

And it's horrific to see the real pain and real hurt that it causes and these are these are long term paintings that they cause and even on the, you know, even on the business side. If you're a business owner and it's somebody that you worked with for 20 years

That causes real pain. And it's not just money, money can be replaced that that trust and the real pain that you feel inside, nobody can get you just don't get over that next the next day.

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Kelly Paxton: No, I mean fraud has real consequences and you know, I just finished my book. Be sure and get ut, Embezzlement How prevent or detect, prevent and investigate pink collar crime but but That's the thing is people have optimism bias which is means, it won't happen to us. All course and you know someone, I'll say, you know, fraud is going to happen.

 And everyone in the course is going to say, oh, it's going to happen to him, or it's going to happen to her. It won't happen to me because I'm so smart. I'm so successful.

 And we do that because it motivates us. It gets us out of bed in the morning to think positively about the world, but um fraud does happen. And it happens in any industry in any geography.

 You know it's it at the end of the day, you can replace the money but you the last time the energy I that's kind of like my word going forward this year is

 What does fraud do to the energy of a person, the business owner, the business. The co workers. I mean you and I know we won't mention what it is.

There's a sort of municipality like business in our area that was ripped off and the woman who allegedly committed committed suicide. And so how did that affect not only the consumers of this municipality, like how did it affect her co workers. How did it affect management, like, and the reputation of the business in industry, it's so much more than just the actual act of it.

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Melissa Goddard: Absolutely, absolutely. And, you know, from a from the construction industry side of it. I worked in construction since my first job was in construction and you know as a 15 year old after school job of I was lucky enough to work in construction office and so since then, all I've heard is all this is the way construction is you're never going to change this industry, you have these rough, tough guys and they do their thing and they're not always straight up, honest, whatever. And there are some bad guys in construction. We all know this. However, there are some absolutely amazing guys who are straightforward. They want to do things right. They want to change the way people look at the construction industry.

My, my goal. And one of the things that in my training that I really want to change is the way people look at this is not going to happen to me, this can't happen to our company. This can't happen to our employees. This can't happen to us. Because I think if you change that perspective in the constructed construction industry if you change that this is the way the construction industry. Does things or this is the way the construction industry is and you start looking at, we can change this. And this can happen to us in our business.

If you really change that perspective, then we can really make a difference and stop.

 Some of this fraud and stop you know this from happening in the construction industry as much as it happens, especially with the corruption.

And bid rigging. And those kind of really big things that happen in the construction industry that the construction industry is known for. We can make a huge difference.

 If we can really change those perspectives of this can't happen to us or this can't happen in our business. If we can start at the top and really trickle that down to the employees into suppliers.

 And really make them see that this can happen to your business. All it takes is one employee that you hire that has this different you know we were either attitude or they're under the right amount of pressure. All it takes is one  then we can really start making a difference.

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Kelly Paxton: Well that yeah that is great because my whole thing most people think pink collar crime is women committing any type of crime which it is position not gender. It's garden variety embezzlement is I want to change that the bias or the stereotypes of a criminal like

You know, we say bad guys like come on, that's it's it's offensive to guys if  there are women that commit crimes and again

I want to I want people to understand the honest people still do you have an example of someone that may be committed crimes that he was a good, decent person to made a bad choice you have some examples like that.


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Melissa Goddard: Yeah, I mean,


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Melissa Goddard: I the one that sticks out to me and this one kind of blew me away. And so I had an older lady that she worked at at a plumbing business for 20 some years.


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Melissa Goddard: sweetest lady Kelly that you would ever meet in your entire life little old lady she bakes cookies every single day. I mean, she was just the sweetest thing and

 And I was in there and just working on an audit started noticing some weird stuff. And I was like, This doesn't end in payroll right she did all of the books and everything.

 And I was like this just doesn't make any sense. There was extra payroll to her and I asked her boss about it. And he's like, No, we didn't pay anything extra knows, like, yeah. Yeah, you did. He's like, No, no I didn't. And I was like, um, but he's texting did he's like, No, I was like, okay, so I pulled all the information together. And I showed him and he was like board.

 Over about 10 years has stolen like $300,000 likes and she literally wrote herself extra tax and he signed them. She would give him sacks of checks, you know, for everybody..He didn't actually look at any of the checks. Yeah.

 He just assumed that she was giving him was correct and sign away and they went. And so she was giving herself extra tax and so This is a, this is a bad choice on her part, but she was sweetest lady ever when we questioned her doctors. She honestly felt like she was oh the extra money. So, in the evenings, she would take the phone calls for the plumbing business like the emergency calls and route them out to wherever was on call.

So she felt she was all the extra pay because she was actually doing the answering machine or answering service stuff that he would normally have to pay somebody else for so she felt like she was owed the money, but he wouldn't pay for it. So she made herself.


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Kelly Paxton: Yeah, that goes to the rationalization part of the fraud triangle, we know


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Melissa Goddard: Absolutely, like me, she wasn't a bad person. She made a really bad choice.

For not a bad person. She was the sweetest thing ever asked. She was absolutely the sweetest thing ever. She made a really bad choice.


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Kelly Paxton: Yeah and you know maybe at one point. She even asked the guy like hey I'm taking these calls. Can I maybe get a bonus for it or

Something like that. And there is a case where someone said that he asked for, like, a raise. And the bosses, like, no. And they ended up just giving themselves a raise for years and it ended up being in like hundreds of thousands of dollars. And he's like, I'm doing the work. The bosses. We can't afford it and he knew he could afford it. And so he just gave himself the raise. 


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Melissa Goddard: And and she said that she had asked several times to be paid for it.And she even went out and she did her homework. So she went out and found out how much it would cost for an answering service.


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Melissa Goddard: To take these calls so she did her research and presented it to him. So this is what you would be paying and he still said no.


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Kelly Paxton: And they still wanted her to do the work.


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Melissa Goddard: And so Justified in paying herself and, you know, so not a bad person.


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Melissa Goddard: She should have just hired an answering service, but instead she paid for it. So, these, these are the rationalization and and not a bad person made a really bad choice.


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Kelly Paxton: Yeah, exactly. So now you live in Bend and now I live in Bend., They say 105,000 people and you know it's not a metropolis yet you've been able to make a living doing this work. So what would you say to someone that lives in a smaller sort of community, maybe that doesn't have the resources. You've been able to still get training. Give us some sort of advice as to how you've been able to build a thriving business and, you know, not

 Not a not thriving economy, but not somewhere where you're kind of like you would think that there would be fraud in enough work for you to support your business.

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Melissa Goddard: So I, I have both the construction fraud and construction audit part of my business. So I do work both here and in Portland. So I do both. And I also team with some great people in construction auditing. So I'm extremely lucky. So when my workflow is a little bit slow. I have teaming partners that I can reach out to and say, Hey, do you have anything I can help you with, I have fantastic people in the construction audit industry. That had mentored me and really are fantastic in assisting me with workflow. And so my suggestion to people is, you know, networking making sure you're reaching out to people because sometimes even if you're working and in construction or in fraud.


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Melissa Goddard: Or even in auditing. If you are slow. Somebody else might be overwhelmed and they may be able to you know give you part of the case or, you know, help you with your workflow. So Networking, and especially the small business if you're in a small area and make sure you're reaching out and I always do all of my calls to you know lawyers and owners and all of that. Do them over the phone or, you know, zoom calls, whatever, but do them personally.

 I think the personal touch makes a big difference, especially in the small community.

 And it makes all the difference. So when you're in a big city. It may not make such a big difference. But when you're in a small community. Reaching out to people before covid. I would go into people's offices and just introduce myself. Of course, we can't do that. And now that we're in Covid that I still make phone calls to people personally

 So, It makes a big difference that in person contact when you're in a small community.

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Kelly Paxton: Well, and I think I connected you with Nicole Landau, who I've had on the podcast and


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Melissa Goddard: Yes, she's amazing.

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Kelly Paxton: Yeah, and I got connected to her through Dan Ramey, but one of the consistent themes of Great women in Fraud is that like network, network, network.

 And it's not to get stuff. It's to give stuff, it's you know, it's a two way street in the whole personal touch in the small community. I think definitely emulate that.

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Melissa Goddard: Absolutely, absolutely. And me and Nicole have talked about working together on projects and that kind of thing, because that same thing. We're both in kind of small communities. And so if we can work together on projects, if she has something that she can give me and vice versa. I will help both of us out. So I think it definitely works. Wonderful. If you're networking with people.


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Kelly Paxton: Absolutely. so this is kind of one of my wrap up type of questions. What would you tell your 18 year old self, and if you wanted to get into the fraud world or you had any interest in what is like a nugget you would give your 18 year old self.

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Melissa Goddard: And go out there and no matter what anybody tells you, go for it. And it's not always easy and but be persistent and enjoy every minute of it. Because working in the fraud industry.Is absolutely amazing and and enjoy the ride is absolutely amazing, the people that you meet and you know other people in the fraud industry are absolutely amazing. I love hearing the stories networking with people is absolutely incredible. So, you know, I don't, I don't know about other industries as much but I know in the fraud industry.

Networking with people we all rely on each other so much and we share stories and we help each other out and I just love the way that we are such a community of people that are there for each other so I think that the networking in the community and just enjoy every moment of that.


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Kelly Paxton: Yeah. And this is a funny story. I was coming home from a gig and I'm sitting next to a guy on a flight. And, you know, we get to talking cuz I'm chit chatting.


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Kelly Paxton: And it turns out that he knew Melissa and because I said I was. Yeah, I speak on  fraud.I'm someone who speaks about fraud work. And it turns out, do you remember that the he works at Les Schwab, and oh my god he was hysterical because he had a couple of cocktails on this flight and He spoke so highly of you. And it's like, this is a really small world. If you say the word fraud, people are going to go. Ooh, it's just like there's such intrigue, but it is a really small knit world.


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Melissa Goddard: Oh, absolutely. Absolutely.

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Kelly Paxton: Yeah, yeah. Well, he gave you a huge, huge, like, you know, he also said that if I ever needed really good tile work to ask her husband.

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Melissa Goddard: Yes, yes. Husband power can stonework so

00:29:04.980 --> 00:29:19.680

Kelly Paxton: See, and that's where you get it. Yeah, that's it. This is a small small world. I'm the last question I always ask is, and I don't know if you've even been on the Google machine today. But what is the last thing. You Googled before this podcast.

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Melissa Goddard: I was actually actually looking at Nevada modified business tax.


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Melissa Goddard: Okay, some construction audit that I'm working on.


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Kelly Paxton: Okay, so it was work related

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Melissa Goddard: Work related. Yes. Yeah.


00:29:38.100 --> 00:29:47.040

Kelly Paxton: That is great. The Google machine work related. So I cannot thank you enough. Melissa for coming on Great Women in Fraud. I can't wait till we can actually

 Get out and see each other and beautiful Bend, Oregon. Maybe it's going to have to be a food cart outside. But again, I just want to thank you because I've seen you grow your business and I, I'm just, I'm honored to be a colleague of yours.

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Melissa Goddard: I am so thankful to be on your podcast Kelly and so thankful that you reached out that first time on LinkedIn. And I think of you as a mentor and I absolutely am thrilled to be on here with you and to follow everything that you're doing and I can't wait to get your new book. So I'm going to be jumping on LinkedIn right now.

00:30:24.390 --> 00:30:30.660

Melissa Goddard: So that I can go out and get your new book and can't wait to go out and have lunch with you and catch up.


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Kelly Paxton: Thank you.


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Melissa Goddard: Thank you.