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People in The News < Back Compliance : Sarbanes Oxley : Auditing : Back Office Internationally Recognized Forensic Authority Frank Hydoski Joins Deloitte Lead Forensic Investigator of U.N. Oil-for-Food Inquiry Joins Deloitte Financial Advisory Services
Hydoski is internationally recognized for his work in complex investigations, especially those requiring information technology to facilitate forensic analysis. He has extensive experience in designing and developing analytical databases used in litigations, investigations and settlements. Hydoski will assist Deloitte FAS with the development of new products and approaches in the forensic accounting and investigations areas and will lead investigations on behalf of clients for the Forensic & Dispute Services practice, working on both private and public sector matters. ?My aim is to help the practice increase its strategic use of technology. We plan to heighten our effectiveness in forensic accounting assignments, particularly those involving fraud reconstruction, detection and prevention,? said Hydoski. ?For some years now, the main dynamic in forensic services has been the connection between the substance of what forensic accountants do and their increasing use of sophisticated technology. We intend to further leverage that technology to make it a bridge to new forensic accounting services.? ?Frank Hydoski has proven himself among the world?s most accomplished forensic investigators ? he has held leadership positions in large-scale investigations on behalf of sovereign governments, corporate clients and international institutions, and delivered major results for very challenging assignments,? said Frank Piantidosi, chairman and chief executive officer of Deloitte FAS. Piantidosi was a lead member of the team involved in the Swiss bank investigation convened under former Federal Reserve Chairman Paul Volcker. ?Besides handling the organizational and human elements of a complex investigation, Frank has exceptional ability to assemble massive quantities of data. He knows how to use technology to more readily see connections and find answers than would otherwise be possible,? Piantidosi added. ?His role in the Oil-for-Food investigation demonstrated his ability to manage the kind of global, technology-intensive investigation that we increasingly face in our practice. We are delighted that he will share his enormous investigative experience with our clients.? As chief forensic investigator examining the United Nations Oil-for-Food Programme, Hydoski was responsible for forensic accounting tasks as well as the development of analytical databases designed to combine all available information about contracts and transactions underlying the Programme. These databases documented the billions of dollars of misused Programme funds. He was also responsible for electronic discovery and for the selection and organization of the vast numbers of documents relevant to the investigation, estimated at 13 million pages. Paul Volcker, the former head of the Federal Reserve Bank, who chaired the Independent Inquiry Committee (ICC) into the Oil-for-Food Programme, and who also served as Chairman of the Independent Committee of Eminent Persons (investigating the question of whether Swiss banks hid Holocaust Victim assets), said of Hydoski: ?I worked closely with Frank for several years on very difficult investigations that had to break new ground. He is a first-class professional in a difficult area. Fair, dogged and accurate.? Hydoski helped develop and execute the strategic direction of the oil-for-food investigation, which yielded a series of five reports documenting the manner in which Iraq manipulated the program to dispense contracts on the basis of political preference and to derive illicit payments from companies that obtained oil and humanitarian goods contracts. The reports also addressed the adequacy of the program?s management by the United Nations. Hydoski was particularly responsible for the report chapters dealing with accounting treatments, the effectiveness of the oversight functions, the banking function, and the quantification of illicit income gained by Iraq. ?The challenge in this assignment,? Hydoski explains, ?was to quickly gain control over a substantial amount of documentary and transactional information regarding the actions of UN officials, oil purchasers, goods providers and UN member states so that we could explore the questions of malfeasance and maladministration. While we were building the information resources we were also traveling the world interviewing key participants in the Programme. Without the effective use of technology and sophisticated data analysis, we could not have brought this information together in a timely, useful way. A measure of our success lies in the fact that in addition to building resources, we developed a wide variety of forensic accounting analyses and found, for example, that UN entities had overcharged the Iraq account by approximately $50 million, which the UN has agreed to repay.? Previously serving under Volcker in the investigation of Holocaust era accounts held by Swiss banks, Hydoski led a crucial part of the massive forensic effort that pieced together information created over a 60-year period from customer records, accounting department records, records from the legal offices of the banks, customer correspondence, records from banking regulators in several countries, records of the identities of Holocaust Victims, and publicly available information located in historical archives in the U.S. and Europe. One of the largest investigations of its kind, Hydoski?s team expended approximately 400,000 professional hours reconstructing a picture of more than 800,000 Holocaust-era accounts at one of the largest banks in Switzerland. Of these, tens of thousands were identified as possibly belonging to Victims of Nazi persecution. The Swiss banks agreed to a settlement of $1.25 billion to compensate claimants in various classes, of which up to $800 million were set aside for awards to Swiss bank account holders and their heirs. Hydoski notes that his team?s accomplishments were directly related to its use of database technology: ?The key problem we faced was the fact that records were highly decentralized, in fact scattered through hundreds of branches and archives. That, in combination with the passage of 60 years and the extraordinary tragedy of the Victims, led to our relying on an approach that might be called archeological. Having found bits of information largely through manual research of archives and branch offices, we used relational databases to piece the bits together into reconstructed views of accounts, and to then match the account names to names of Victims of the Holocaust, having created the first comprehensive list of Victims and techniques for judging name matches.? Hydoski also performed investigatory work for the Government of Kuwait. Kuwait hired his team to assist it in preparing claims for compensation from the Iraqi government following the invasion of the country in 1990. This engagement entailed working with 50 government ministries to determine and quantify the public sector losses resulting from the invasion and occupation, and to prepare formal claims, a situation complicated by the loss of documents through damage and theft during the occupation. Earlier in his career, Hydoski was the founding partner of the Forensic Technology Solutions practice at another Big Four accounting firm, where he is credited with establishing the first client-facing technology practice in the context of disputes, investigations and reorganizations. Hydoski earned his bachelor?s degree from San Diego State University and his master?s and doctorate from the University of Chicago. Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other?s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names ?Deloitte?, ?Deloitte & Touche?, ?Deloitte Touche Tohmatsu? or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein. Deloitte & Touche USA LLP is the US member firm of Deloitte Touche Tohmatsu. In the US, services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP.
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