When fraud is suspected within a business — whether committed by an employee, a manager, a director, or a combination of insiders — the investigation that follows must be conducted correctly from the first step. Evidence gathered improperly may be inadmissible. An employee suspension that does not follow the correct process may expose the business to unfair dismissal liability. A confrontation with a suspect who has not been legally advised can trigger evidence destruction and asset dissipation. The way an internal fraud investigation is conducted determines what can be proved, what can be recovered, and what the business’s legal exposure is throughout the process.

EAGLEGATE advises businesses, boards of directors, and executives on conducting internal fraud investigations — structuring the investigation correctly, managing employment law obligations, preserving evidence under legal professional privilege, and connecting the investigation to civil recovery and, where appropriate, criminal referral.

The investigation determines what can be proved. A legally unsound investigation can undermine both civil recovery and criminal prosecution — even where the fraud itself is clear.

Key Internal Fraud Investigation Expertise — Structure, Evidence, Recovery

EAGLEGATE advises on every stage of an internal fraud investigation.

Scoping the Investigation

Before any steps are taken, the scope of the investigation must be defined: who is suspected, what conduct is alleged, what period is covered, and what the investigation is intended to achieve. The scope determines the evidence that must be gathered, the employment law steps that must be followed, and the structure of the legal proceedings that may follow.

Legal Professional Privilege

Communications between a business and its lawyers in the context of an investigation are protected by legal professional privilege — they are not disclosable in subsequent proceedings. Structuring the investigation so that legal advisers are engaged from the outset, and that communications flow through them, maximises the scope of privilege protection and protects the business’s legal strategy from disclosure.

Employment Law Obligations During Investigation

Where the investigation involves a suspected employee, the Fair Work Act 2009 (Cth) governs the employer’s obligations. Key obligations include: the right of an employee to have a support person present during interviews where adverse action may result; procedural fairness requirements for suspension and termination; and the prohibition on dismissal without a valid reason and a fair process. EAGLEGATE advises on these obligations concurrently with the investigation — ensuring the business does not create unfair dismissal exposure while investigating fraud.

Evidence Gathering

A legally defensible investigation requires careful evidence gathering: maintaining the chain of custody of documentary evidence; obtaining expert analysis of digital devices and communications without compromising their integrity; interviewing witnesses in a way that is admissible and does not breach employment obligations; and preserving financial records in a form that can be tendered in civil and criminal proceedings.

Director and Senior Executive Investigations

Investigations involving directors or senior executives raise additional complexity — including the company’s obligations under the Corporations Act 2001 (Cth), the risk of whistleblower protections under Part 9.4AAA being engaged, and the governance obligations of the board in overseeing the investigation. EAGLEGATE advises boards on managing these investigations at a governance level, while maintaining appropriate separation between those conducting the investigation and those being investigated.

1. Scope the Investigation

Define precisely what is being investigated, who is the subject, and what the investigation needs to achieve before any investigative steps begin.

2. Establish Privilege Protection

Engage EAGLEGATE from the outset to ensure that investigation communications are protected by legal professional privilege, and that the investigation strategy is not inadvertently disclosed.

3. Gather Evidence Correctly

Gather evidence in a way that maintains its integrity, satisfies chain of custody requirements, and complies with the employment law obligations running concurrently with the investigation.

4. Connect to Recovery and Proceedings

Where the investigation establishes fraud, connect the findings to civil recovery proceedings, asset preservation orders, and where appropriate, referral for criminal investigation.