Electronic Discovery and Fraud Examinations

March 18, 2011

Etan Mark, J.D., C.F.E.

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210 billion emails sent daily55 billion non-spam emails sent daily1.06 billion Instant Messaging accounts exist worldwide97% workers use email daily10% employees receive confidential info via email27% of Fortune 500 companies have had to deal with employment–related or harassment claims requiring searches and production of email

In 2011, the volume of digital information is expected to be 10 times the size it was in

2006

Eye Openers!

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ESI: Electronically Stored Information

What is ESI?: Information created, stored and/or utilized using computer Information created, stored and/or utilized using computer

technology.- technology.- Federal Judiciary Counsel Research Division

“Document(s)” means all materials within the full scope of Fla. R. Civ. P. 1.350 including but not limited to: all writings and recordings, including the originals and all non-identical copies, whether different from the original by reason of any notation made on such copies or otherwise (including but without limitation to, email and attachments, correspondence, memoranda, notes, diaries, minutes, statistics, letters, telegrams, contracts, reports, studies, checks, statements, tags, labels, invoices, brochures, periodicals, telegrams, receipts, returns, summaries, pamphlets, books, interoffice and intraoffice communications, offers, notations of any sort of conversations, working papers, applications, permits, file wrappers, indices, telephone calls, meetings or printouts, teletypes, telefax, invoices, worksheets, and all drafts, alterations, modifications, changes and amendments of any of the foregoing), graphic or aural representations of any kind (including without limitation, photographs, charts, microfiche, microfilm, videotape, recordings, motion pictures, plans, drawings, surveys), and electronic, mechanical, magnetic, optical or electric records or representations of any kind (including without limitation, computer files and programs, tapes, cassettes, discs, recordings), including metadata.

What’s so special about ESI?- Volume - Duplicability- Changeability- Location Dynamic- Searchability- Metadata- Deleted doesn’t mean it is gone!

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Metadata

“Data About The Data”

Varies by type of document Some is hidden from the user Hidden codes within application Internet “cookies” / search tags

Examples: Microsoft Word: document author, date of last access, last save, last print, track changes or redlines Microsoft Excel: formulas, hidden rows, columns, worksheets Digital Photos: Date, camera brand and type, resolution, focal

length, aperture, GPS location of photo Digital music: album, artist, song name, sampling rate

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Tips for Requesting ESI

Specifically ask for Metadata to be produced if it is potentially relevant

Florida Ethics Opinion 06-2 (Sept 15, 2006)

The duties of a lawyer when sending an electronic document to another lawyer and when receiving an electronic document from another lawyer are as follows:

(1) It is the sending lawyer’s obligation to take reasonable steps to safeguard the confidentiality of all communications sent by electronic means… including information contained in metadata, that may be included in such electronic communications.

(2) It is the recipient lawyer’s concomitant obligation, upon receiving an electronic communication or document from another lawyer, not to try to obtain from metadata information relating to the representation of the sender’s client that the recipient knows or should know is not intended for the recipient. Any such metadata is to be considered by the receiving lawyer as confidential information which the sending lawyer did not intend to transmit. See, Ethics Opinion 93-3 and Rule 4-4.4(b), Florida Rules of Professional Conduct, effective May 22, 2006.

(3) If the recipient lawyer inadvertently obtains information from metadata that the recipient knows or should know was not intended for the recipient, the lawyer must “promptly notify the sender.” Id.

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When should you start thinking about ESI?

Immediately!At the inception of any fraud examination, the fraud examiner needs to immediately think of methods to preserve and access electronic discovery.

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Client Intake

At the inception of an investigation:

Identify key sources and custodians of data- electronic and paper

Computer Infrastructure- locate all relevant sources of data

Search terms and dates- if there is data, what date ranges and what terms should be used?

Frame Initial Strategy

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Where do you look for ESI?

Servers Desktop/laptop hard drives Legacy computer systems Cell phones/ PDAs Voice mail systems IP Telephones Digital Cameras Photocopiers GPS tracking devices Mp3 players Videogame systems Cars RFID tags

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The CFE Equivalent of Litigation Hold Letters

- Notice that a party must take reasonable efforts to preserve relevant data

(1)Send it from the top(2)Be discriminating(3)K.I.S.S.

Suspend routine deletion processes Should include hard copy and electronic documents Stop data compression, defragmentation and optimization

routines Preserve backup tapes Not repair or alter any equipment Suspend regular recycling of documents

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Litigation Hold Letters

- If letters are not issued, you are gambling with the evidence in your case

- Continuing duty beyond litigation hold memo

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2006 Revisions to the Federal Rules of Civil Procedure

Added “electronically stored information” to Rules 26(a)(1), 33, and 34

Rule 26(f) expands the list of issues that must be discussed as a part of the meet and confer process, and includes a requirement that parties develop a discovery plan that addresses issues relating to the discovery of electronically stored information

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Spoliation

Destruction or significant and material alteration of a document or instrument

Requires destruction, as opposed to concealment of evidence

Much easier to do with Electronically Stored Information because of ease of deletion and portability of data

Obviously tied to preservation obligations of the parties in the action

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Consequences of Spoliation

Left to the Discretion of the Court- Client Sanctions ($$$$)- Dismissal of claim- Entry of default judgment against spoliating

client- Adverse inference/leveling mechanism

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Tips for Requesting ESI

- Specify the format for your production type in your requests Native? TIFF with metadata load file? PDF? OCR?

- Be careful of redaction!

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Tips for Requesting ESI

- Large productions may require a vendor for “code and load” Loading Coding De-duping/”Near-duping” Searchability

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Tips for Requesting ESI

-Don’t forget about 3rd parties: Request documents from third parties:

Document retention policies Privacy concerns

Who Has the First Question?

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Contact Information:Etan Mark, J.D., C.F.E.Berger Singerman, PA

200 South Biscayne BoulevardSuite 1000Miami, Florida 33131Telephone: (305) 755-9500E-mail: EMark@bergersingerman.com Boca Raton Ft. Lauderdale Miami Tallahassee we deliver creative and effective business solutions and counsel