Great Women In Fraud

Episode 23 Marcy Phelps, CFE

March 09, 2021 Kelly Paxton, CFE Episode 23
Show Notes Transcript

Our Great Women in Fraud guest today is Marcy Phelps.  She is the second librarian to be on Great Women in Fraud.  I spent a lot of time in libraries growing up.  I will always support libraries for any tax or bond measure.  You will hear how Marcy has created a career out of her degree in Library Science.  You may have a mental picture of libraries but Marcy will tell you about her progression from starting out to creating a business that is so important but also incredibly fulfilling to her.  I can’t wait to get out and travel again and see Marcy at the next OSMOSIS conference.  Let’s get started. 

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Kelly Paxton: We are here today with I want to say longtime friend colleague and just amazing amazing person Marcy Phelps and Marcy Phelps is a certified fraud examiner but i'm going to let her talk about her background, and let me tell you it, it has to do with books.

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Kelly Paxton: So Marcy why don't you introduce yourself.

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Marcy Phelps: Well, thanks Kelly, this is really nice.

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Marcy Phelps: So Marcy Phelps and my company is Marcy Phelps and associates and I've been in business for  21 years now, and I actually started my business and what Kelly's referring to is straight out of graduate school where I got my master's in library and information science and  I always knew I wanted to get a master's in library and information science, but I always knew that I didn't really want to work in a library in a traditional sense so actually there are a lot of books in my background.


My first library gig was as a virtual librarian for the first online MBA program and accredited online MBA programs so to have a library, in order to be accredited so we somehow created a library.

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Kelly Paxton: And that was way before Zoom.

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Marcy Phelps: Is a before Zoom so an electronic library was kind of cool back then.

But that was my first client they actually came to me and said hi do you want to do this contract work and I was like oh okay I'm if they're going to pay me to stay home and do research who else will as well, and because research was my niche in my MLS program and.

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Marcy Phelps: At that time it was doing research and analysis on people and companies, but it was for marketing purposes.

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Marcy Phelps: I did my research and analysis for marketing professionals, for many years and then about seven years ago I don't know, eight years ago.

A private investigator found me and asked if I could help him do a research.

He had someone who did his news and social media research, but he retired and he needed someone else and I started and.

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Marcy Phelps: It was like fascinating work I just loved what he did. I loved the kind of work he did he specialized in hedge fund due diligence investigations and it was a lot of fun and he encouraged me to become a private investigator.

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Marcy Phelps: And about that time Colorado was reintroducing law of that.

 The requirement to get a PI license. So I got licensed and this gentleman chuck taught me.

 everything he was doing and that was the point that my business took the turn from market research and intelligence to more investigative work and.

 So that was quite a turning point for me as far as fraud goes.

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Marcy Phelps: I always noticed at PI conferences, when I met PIs, who were also certified fraud examiner's I was fascinated to hear about their work, their work intrigued me, so I got my CFE credential maybe four years ago, something like that and.

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Kelly Paxton: I remember talking with you about you were considering it and I was like go get it so. I think, yes, like five or six years ago, because I was at Nike when it happened.

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Marcy Phelps: mm hmm yes, it was you encouraged me and several other PIs, I spoke with Hal Humphreys encouraged me and It's been I think it's a great group so I'm glad I took that and Friday to me is. kind of fascinating to work with I've worked with head-on two angles.

With due diligence it's preventing fraud.

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Marcy Phelps: Preventing my clients from going into business with fraudsters, hopefully, and then, on the other side, the assets search where we're looking for possible fraud there.

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Marcy Phelps: So that's pretty much been the long and winding road I guess.

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Kelly Paxton: What when I worked for a pension fund, and you know this was decades ago.

 I said to the HR person I'm like do you guys do background checks on the portfolio managers and she's like well no they'll never be able to access the cash like there's just you know their systems in places.

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Kelly Paxton: My thing was the reputational risk, and you know I went from there to becoming a special agent but.

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Kelly Paxton: And then I meet people like you and I just it's a natural if you have someone that whether they can touch the money or not touch the money the reputational risk is priceless as MasterCard or Visa says it's priceless.

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Marcy Phelps: that's a huge part of due diligence is taking a look at that, because that can affect so many different kinds of businesses.

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Marcy Phelps: But i'd also argue that a portfolio manager devil may not have their hands on the company's money, but they have their hands on the clients money, so you know it's we're investigating portfolio managers all the time and.

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Marcy Phelps: We.

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Kelly Paxton: was a great story in the newspaper just recently about a hedge fund, I believe it was two guys and they allegedly stole 1.8 billion dollars and they show pictures of them he's got like a Lamborghini a Maserati you know until I send the article to my broker.

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Kelly Paxton: And I said fyi just want to check and see what kind of car you have, and she wrote back and she goes, we have a truck because it's the only car that will fit the crates for our two Great Danes and I said we're good to go.

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Marcy Phelps: And I know you always talk about that take a look in the parking lot and see if the cars match the  job and you know a lot of we do look for some extravagance and it's usually a sum of the parts with our due diligence yeah.

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Kelly Paxton: And it's also like a change in behavior so if they like the broker that I had before, who just retired and she took his place he's always driven a truck like a Toyota.

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Kelly Paxton: Okay, eventually, he slowly upgraded to a Lexus I've known him for 25 years I know we can justify the Lexus but if he goes from a truck you know because he lives lived on a farm to a Lamborghini that's a big change.

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Kelly Paxton: that's and that's a big.

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Marcy Phelps: that's a big red flag yes.

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Kelly Paxton: yeah absolutely so you um I was going through Twitter, because you and I both love Twitter, do you have.

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Marcy Phelps: As much as I love Twitter I don't think I like Twitter as much as you. I like LinkedIn.

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Kelly Paxton: We both love LinkedIn.

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Kelly Paxton: yeah yeah so um the Twitter led me to one of your recent blogs, and you have a thing about your superpowers um one of them being the reference interview, do you want to talk a little bit about the reference interview.

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Marcy Phelps: Yes, so just for a little context it's what I call librarian superpowers, because some of the things I've learned as a librarian come in very handy nowadays in my investigative business and.

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Marcy Phelps: it's always been handy and Librarians call it the reference interview, and we learn that early on, because most people don't ask for what they really want.

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Marcy Phelps: or need actually and.

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Marcy Phelps: Librarians have a joke that people are always sure it's a Blue Book and it turns out it's a Red Book.

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Marcy Phelps: But you catch the drift right, so we get really good at digging and asking probing questions and probably one of the nicest compliments I ever got from a client was that I understood the why what my clients needed and why and that made 

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Marcy Phelps: What I deliver to them that much more valuable and that to me was a huge compliment, and I think it's a result of that superpower of knowing how to do the client interview and find out what clients really need.

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Marcy Phelps: And what would work if he can find that, because sometimes they have unrealistic expectations about what's available, so you have to know how to.

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Marcy Phelps: pick what a good alternative would be and that comes in handy too so.

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Kelly Paxton: Well, in the PCI world, one of the you know unrealistic expectations is the bank statements can't you support you know you can find the accounts can't you and it's like oh no, but we can other things so right so.

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Marcy Phelps: yeah right.

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Marcy Phelps: Absolutely very useful.

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Kelly Paxton: um another sort of superpower of yours is like databases.

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Marcy Phelps: Right law that was another there was one my top library and superpowers, because as a.

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Marcy Phelps: Understand I didn't go back to Grad school to become a librarian until after my kids were in high school, so I wasn't a librarian so much in the book age as much as the age of databases and Google, to be perfectly honest, so.

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Marcy Phelps: I learned how to.

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Marcy Phelps: Use databases to teach other people how to use them.

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Marcy Phelps: I learned how to buy them select them within a very tight budget because libraries don't have big budgets but big information needs and so all this is coming really handy and.

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Marcy Phelps: I think I'm pretty good at figuring out where information is.

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Marcy Phelps: might be and how to get it out.

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Kelly Paxton: yeah well, I mean databases, you could spend just so much money on them.

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Marcy Phelps: hmm and.

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Kelly Paxton: um they're really important um you know people think, Brian Willingham who we both know and love.

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Kelly Paxton: He just wrote a thing about you know, I think it was eight ways attorneys can learn how to Google better well my responses I don't want an attorney googling on the six-minute and commit because.

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Kelly Paxton: You know it, it doesn't make sense financially to do it and no I haven't going to say this right now, and no offense to attorneys out there, there is no attorney who can Google better than I'm going to say it, a library.

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Marcy Phelps: Well yeah we all should focus on what we do best and our strengths and you know arguing in court is not one of mine, but let me add that database yeah.

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Marcy Phelps: and probably get what if it's there I can usually figure it out.

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Kelly Paxton: So you were on john holders PSI podcast recently also and I loved your 2021 sort of goals to network war, how are we going to work more with covert.

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Kelly Paxton: you're being hopeful I know I'm being hopeful too.

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Marcy Phelps: I know I was being very helpful and 2021 hasn't quite gotten off as planned.

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Marcy Phelps: But I'm trying to do more of this having conversations with my colleagues and.

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Marcy Phelps: I do some speaking at virtual conferences now so fortunately that's continued and it's not like connecting in person, by any means, but it's a way of networking and personally LinkedIn to me is such a valuable tool in as a professional.

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Marcy Phelps: For my network for information it's yeah.

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Kelly Paxton: Oh, I found amazing sources that I could never find.

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Kelly Paxton: If it weren't for LinkedIn I actually a colleague who's also going to be on the podcast I just recorded hers the other day she just posted.

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Kelly Paxton: About a company that uses Ai and just did a report about COVID and bad behavior so I immediately went to you know LinkedIn and I checked out the CEO and the CFO and I wouldn't have been able to do that in the past um.

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Marcy Phelps: And you pointing out an important part of networking people always think of networking as a way to get business.

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Marcy Phelps: But that's like maybe secondary, at best, and I think the point of networking is to learn from and help each other.

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Marcy Phelps: You know it's mutual a lot of people forget the social part of social networking and.

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Marcy Phelps: So you have give and take, and share and help each other and.

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Marcy Phelps: And then the business, you know may or may not come after that.

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Kelly Paxton: I've definitely gotten business from LinkedIn absolutely even if they've heard about me some other way.

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Kelly Paxton: Then they go to LinkedIn and they see.

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Kelly Paxton: The testimonials they see there's a lot of content, the amount of connections things like.

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Kelly Paxton: yeah so yeah now another thing that you did recently and you want to continue into 2021 is your teaching do you want to talk about your courses.

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Marcy Phelps: Oh okay um this is really exciting because.

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Marcy Phelps: I have a background in education and I always have wanted to do some kind of teaching and being a learning environment, but I hadn't clearly identified it so now, I have this opportunity.

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Marcy Phelps: See, and this is how I met someone you help me meet this person, because you connected me to someone, so I could be speaking at this conference, where I met someone from a learning platform called alou meo.

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Marcy Phelps: john colgan over there he's the CEO and.

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Marcy Phelps: He asked if I'd be interested in perhaps being a speaker an instructor on their platform, and it was very intriguing and.

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Marcy Phelps: Because I really do like speaking, but frankly all that travel even before coven was becoming you know a little not how I wanted to spend my time, and so this is an opportunity for me to create these online courses that are geared for.

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Marcy Phelps: I guess their audience is more, you know.

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Marcy Phelps: accountants fraud professionals internal controls CFO type functions, who need to get continuing education and so.

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Marcy Phelps: I've created two courses at this point it's a little slower going than I had planned.

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Marcy Phelps: I'm working on my third my first one is was on due diligence background investigations, and the second one is how to search online public records like a pro and now I'm working on one for news searching how to search new online news.

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Kelly Paxton: that's fantastic.

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Marcy Phelps: Thank you and I'm enjoying it I'm actually enjoying learning how to do this on an online platform which is kind of new or was new and.

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Marcy Phelps: And I really hope to keep doing more of it.

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Marcy Phelps: This year that's that was one of my big goals this year but I'm afraid I get a little stuck on the recording part on camera part.

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Kelly Paxton: Well that's funny because I was walking with my daughter yesterday, and I said, you know I'm technically I teach and she's like you teach adults, she goes, you could never teach children she's like you're so impatient and.

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Kelly Paxton: I've changed her life but it's because my husband is a professor of education and.

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Kelly Paxton: a long, long time ago, I thought, well, maybe I should become a teacher and we'd have the same sort of schedules and everything, it is the only time my husband has ever been negative towards a person being a teacher was the.

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Kelly Paxton: constitution, for us, but you know what.

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Kelly Paxton: I found out, I have a certain audience.

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Kelly Paxton: and also the passion of my topic.

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Kelly Paxton: Which wouldn't work in a school district so.

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Marcy Phelps: it's definitely different kinds of learning and teaching.

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Marcy Phelps: Adult Learning and non nano learning so um I, I know I prefer working with grownups too.

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Marcy Phelps: I don't think I could ever teach public school anymore so.

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Kelly Paxton: Well, and I wouldn't like to correct homework so.

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Kelly Paxton: Online process we don't have to deal with that at all.

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Kelly Paxton: So if you what is one thing you wish, you had known when you began your career.

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Marcy Phelps: Oh, when I began my career which one.

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Marcy Phelps: I've had so many.

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Marcy Phelps: For fraud um.

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Marcy Phelps: that's a tough one, I just haven't been in it that long I feel like.

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Marcy Phelps: But I.

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Marcy Phelps: I want to tell myself that it's possible it's because when I first started on in this it felt like a big pivot.

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Marcy Phelps: For me to just be hi I'm a private investigator.

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Marcy Phelps: Now, it was a new group of people and.

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Marcy Phelps: A whole new area I had to learn and network in, and it was frankly a little scary and.

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Marcy Phelps: I think I would have told myself, you know it's not like when you start into your business 20 years ago with LinkedIn and virtual connecting it's so much faster it's so much faster than it used to be so I maybe shouldn't have been quite as scared.

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Kelly Paxton: um so who are the three people who have been most influential in your career and I'm going to change that a little bit for you three people or and or three sorts of associations.

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Marcy Phelps: Oh, I know what you're going to say.

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Marcy Phelps: Yes, well, I have an association and in three people can I, because I thought about this question okay um.

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Marcy Phelps: So and.

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Marcy Phelps: The first one is actually thankful.

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Marcy Phelps: thankful to the Association of Independent information professionals Ai

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Marcy Phelps: I met many, many wonderful people and the focus of a tip is, if you own an information related business so as a PPI that's information and.

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Marcy Phelps: The focus is really owning a business as a small business owner and I've met incredible people my network and what I've learned and probably one person, I want to mention who's had a huge influence is Mary Ellen Bates.

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Marcy Phelps: As a friend and a business coach you know she was the one I heard you know that you can market a business, even though you're an introvert.

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Marcy Phelps: And you don't have to go out and be a salesperson you attract people to you by speaking and writing and sharing what you know, and that was, as you know, that's great advice in our business so Mary ellen's had a huge influence.

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Marcy Phelps: Kim Doherty who was my first client for that virtual library.

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Marcy Phelps: And, and then Chuck Sullivan, the PCI who encouraged me to be a PCI because Oh, my goodness, I just found my calling, you know a little late in life, maybe, but I.

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Marcy Phelps: I've definitely found my calling.

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Kelly Paxton: that's very cool and I was a member of Ai Ai P, thanks to you and talk about an incredibly caring sharing giving community and Mary Ellen I have her book the reluctant entrepreneur.

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Kelly Paxton: Because people think I'm an extrovert but really I'm not an extrovert but I prefer to be an introvert so totally totally get that um.

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Kelly Paxton: The next sort of question is, how do you continue to learn in order to stay on top, and I know the answer for you, but the audience, I want the audience to hear, because I know you're good at this.

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Marcy Phelps: Learning.

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Marcy Phelps: Yes, um well I learned from my fellow P eyes and other fraud professionals, I think the CFP is a fantastic organization.

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Marcy Phelps: And the learning opportunities if you that you go to their website, they have every type of learning that you prefer on any given topic so in any format that that that you can take it in.

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Marcy Phelps: So that I read blogs.

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Marcy Phelps: Brian Willingham.

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Marcy Phelps: You know you I listened to your podcast and others, I mean my podcast APP is just full of fraud podcasts these days, which is really nice.

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Marcy Phelps: Cynthia Hetherington I take I've taken courses from her and my Ai p.

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Marcy Phelps: Colleagues, I can we have an email discussion list that I can post a question to and in 10 minutes, all I have that many responses.

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Marcy Phelps: And if you ever want to see something interesting it's how different people would attack approach, a research question it's interesting so.

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Kelly Paxton: yeah you're the second librarian I've had on the first.

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Kelly Paxton: One was Cynthia.

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Kelly Paxton: How close so we're gonna have to find a third one, and maybe it'll be Mary Ellen.

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Kelly Paxton: yeah yeah um.

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Kelly Paxton: This is kind of a I don't know this answer for you at all if you could work in a different job field, what would that be.

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Marcy Phelps: play I really try it, you know people have asked me that question and I'm really having a hard time.

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Marcy Phelps: Because, mainly because it just took me so long to get to where here, where I am and I'm still in the I just love this I can't imagine what else I could possibly be doing.

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Marcy Phelps: The only thing I might explore, is what I what else I could do with my CFP I i'm just kind of learning, you know what that brings to the table in with my clients.

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Marcy Phelps: So I'd like to learn more about that, but being an investigator I can't think of what else I would rather do.

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Kelly Paxton: same here absolutely saying I'm a new question for the podcast and just recently, a new one, because we've been encoded.

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Kelly Paxton: Is there anything and it doesn't have to be related to fraud that you are bingeing on like Netflix or HBO or anything like that a series that you like or a movie that you like that you've been since coven and it may have to do with Rod, it may not.

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Marcy Phelps: Well, I don't watch much on screen because I'm in front of a screen all day long So when I, although.

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Marcy Phelps: My reading is a surprise on my kindle so I guess it's a different screen, but I don't watch Netflix or anything like that my new.

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Marcy Phelps: thing is British murder mysteries.

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Marcy Phelps: So I, and I'm not sure I could even name I've been diving into so many different ones I'm not sure who's who, with this wine, you know which author is which.

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Marcy Phelps: But I've really doing a lot of reading and.

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Marcy Phelps: And you yoga.

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Marcy Phelps: And yoga I finally.

00:29:31.290 --> 00:29:45.210

Marcy Phelps: found somebody on YouTube that I follow and I've somehow gotten a daily practice, going so which is kind of saving my sanity during coven so during isolation.

00:29:46.980 --> 00:30:00.990

Kelly Paxton: um can do you have any sort of case story that you can say that you can sanitize about maybe due diligence for hedge fund that just you're like I can't believe that this person thinks that they can get away with this.

00:30:02.040 --> 00:30:13.230

Marcy Phelps: Well, honestly aren't my do our due diligence subjects are usually very squeaky clean so and sometimes when they.

00:30:15.360 --> 00:30:20.730

Marcy Phelps: When there's a misstep it's it's it may not seem like a big deal but.

00:30:21.780 --> 00:30:22.890

Marcy Phelps: For like.

00:30:24.150 --> 00:30:37.740

Marcy Phelps: lying about where you got your degree it's, not that this guy didn't have the degree, but he lied about where he got the degree he's instead of the actual State University.

00:30:38.310 --> 00:30:54.690

Marcy Phelps: He would put he put on his bio and his signed authorization release for me to go verify, so a legal document that stated, he got it from some prestigious university so.

00:30:55.170 --> 00:31:06.900

Marcy Phelps: he's saying yeah go check and here's where I got my MBA degree, but it wasn't where he got his MBA degree, it was at the State University and.

00:31:09.390 --> 00:31:14.760

Marcy Phelps: You don't need an MBA even for at all to be a hedge fund.

00:31:16.380 --> 00:31:18.030

Marcy Phelps: portfolio manager.

00:31:19.590 --> 00:31:37.140

Marcy Phelps: So my for my client that was like no absolutely not and by the end of the day, actually they went to the you know these people and said either he goes, or we go with all of our clients money and.

00:31:37.800 --> 00:31:52.680

Marcy Phelps: At the end of the day, his name went off the website, it was I don't usually see the results of my due diligence so that was actually quite rewarding because she thanked me specifically for this.

00:31:53.580 --> 00:32:01.650

Kelly Paxton: Well, so it just now, what I would do is I would find out where he ended up to do or go look and see if he's like somewhere else.

00:32:02.610 --> 00:32:07.740

Marcy Phelps: You know I haven't I never thought about it after that he's.

00:32:08.820 --> 00:32:11.760

Marcy Phelps: You know you just move on, you know investigations you.

00:32:11.760 --> 00:32:14.130

Marcy Phelps: Just kind of go on to the next one.

00:32:16.080 --> 00:32:17.340

Marcy Phelps: But that one was.

00:32:19.560 --> 00:32:42.540

Marcy Phelps: I just was just shocked that he would that he was also not a new person in his his career he had been around for a while and no one had clearly called him on this, and so he must have felt very comfortable putting it on the release saying this other university.

00:32:43.140 --> 00:32:53.640

Kelly Paxton: Well, there was the admissions director at MIT that she said that she went to a different school she had taken classes at the different school, but she said.

00:32:54.480 --> 00:32:56.100

Kelly Paxton: In a movie she said.

00:32:56.730 --> 00:33:15.630

Kelly Paxton: I didn't think they'd pay as much attention to me going to a women's Catholic school, so I just she says, I just morphed my taking classes at a more prestigious school into that's where I got my degree, and you know she was unfounded for 28 years but then when it blew up it blew up badly.

00:33:16.440 --> 00:33:20.730

Marcy Phelps: And that's that reputational risk that you're you talked about earlier.

00:33:21.750 --> 00:33:27.930

Marcy Phelps: That because frankly you don't need these degrees, for most of these you know.

00:33:29.310 --> 00:33:34.530

Marcy Phelps: positions and probably nobody really would have cared where she got it from.

00:33:36.120 --> 00:33:44.970

Marcy Phelps: But people just feel the need to lie like that about something it's a big red flag, what else are they going to lie about and.

00:33:46.170 --> 00:33:55.260

Marcy Phelps: that's why my client has no tolerance for that and, and that also sounds like the rationalization side of the fraud triangle there too.

00:33:55.890 --> 00:34:03.600

Kelly Paxton: Absolutely yeah yeah so um we're wrapping up here where can we find you where is best to find you online.

00:34:04.980 --> 00:34:08.820

Marcy Phelps: Well, my website is Marcy

00:34:10.380 --> 00:34:16.890

Marcy Phelps: M A R C Y P H E L P S and you can also find me on LinkedIn.

00:34:17.670 --> 00:34:21.300

Kelly Paxton: Okay Okay, and do you.

00:34:21.360 --> 00:34:26.010

Kelly Paxton: You have your new course coming out do you have any sort of timeline for that will also.

00:34:26.460 --> 00:34:29.100

Kelly Paxton: provide a link to your Illumeo courses.

00:34:29.580 --> 00:34:34.890

Marcy Phelps: Okay, thank you I'm hoping to get this done in the next couple of months.

00:34:35.100 --> 00:34:44.190

Kelly Paxton: Oh that's great that's awesome so it's we're all inside while we're not inside but at least we're not traveling for conferences, you probably can get that done.

00:34:44.580 --> 00:34:45.360

Marcy Phelps: I can.

00:34:45.780 --> 00:34:56.970

Marcy Phelps: yeah and thanks for motivating me and then is there one sort of last thing that you want to tell the community of great women in fraud that has led to your success.

00:34:58.410 --> 00:35:04.200

Marcy Phelps: Oh, my goodness that's an interesting um I think my network.

00:35:05.250 --> 00:35:07.980

Marcy Phelps: um I just have to.

00:35:09.090 --> 00:35:20.610

Marcy Phelps: You know I think a lot of what's happened to me has come my way through my network, I always say Oh, I never even tried, you know, and this came my way, but I did try.

00:35:21.360 --> 00:35:34.950

Marcy Phelps: In that I've always been very diligent about growing and maintaining my network and its really come in handy in my fraud career.

00:35:36.090 --> 00:35:46.290

Kelly Paxton: yeah network, lifelong learning, these are like everyone that comes on the podcast talks about that you just can't stay in the same place and we don't want to stay in the same place, I think.

00:35:46.470 --> 00:35:47.310

Kelly Paxton: Having someone.

00:35:48.480 --> 00:35:51.300

Kelly Paxton: In the community wants to you know move forward.

00:35:51.720 --> 00:35:52.110

Marcy Phelps: mm hmm.

00:35:52.410 --> 00:35:57.510

Kelly Paxton: Maybe not forward it fast and break things but we definitely want to move forward so.

00:35:59.040 --> 00:36:09.030

Kelly Paxton: Thank you so much Marcy for having your time out of your busy schedule to be on the podcast and I look forward to having you back again.

00:36:09.390 --> 00:36:12.030

Marcy Phelps: Well, thank you Kelly much appreciated.

Libraries, PIs, and hedge funds.  So different than we have that mental picture of dusty old stacks and the kids listening to story time.  You can have any career you want as long as you have Marcy’s passion and curiosity.  I have seen her career progress due in no part to her lifelong learning.  She continues to inspire me.  Be sure to reach out to her on LinkedIn and Twitter.  Her blog is a must-read.  Thank you for your time.  I truly appreciate you and your support.