Investigations and Forensic Accounting

  • Conducted an investigation of accounting practices and potential irregularities related to a private college. Assisted the board of directors in developing a plan to stabilize cash flows, improve budgeting processes and adopt control procedures to prevent future problems. In addition, assisted the college in negotiations for various financing and sale options.
  • Performed an investigation into the stock option practices of a large Arizona-based public company. The investigation, which was led by Special Committee counsel, included analysis of stock option plans, board minutes, e-mail correspondence and other relevant documentation. The investigation required knowledge of the accounting and tax rules associated with incentive compensation.
  • Performed an internal investigation on behalf of a large retailer to assist in-house counsel evaluate allegations of vendor kick-backs to company buyers. The scope of our assignment was to interview employees, analyze personnel files, and review and test relevant accounting documentation to provide counsel with advice on potential future courses of action.
  • Prepared damage claims and performed tracing of corporate funds related to a lawsuit involving suspected fraud. The dispute between a receiver and a large financial advisor stemmed from a corporate president establishing an elaborate Ponzi scheme using charitable gift annuities to embezzle more than $40 million from numerous individuals. Our analysis involved tracing funds over a two-year period to unravel the scheme and to demonstrate the financial advisor did not have sufficient data to uncover the fraud.
  • For a major steel producer, calculated the losses incurred by the client as a result of a kickback scheme between an employee and a purchasing agent retained by the client to procure raw materials. Analysis involved arm’s-length pricing of the material in question and determining what the client could have obtained the material for on the open market using its own purchasing power as well as imputing a reasonable markup for a hypothetical purchasing agent. Drafted expert report and exhibits as well as rebutted opposing expert’s report.
  • Engaged by counsel of a Pharmaceutical Research company to perform an analysis of the company’s books and records for a six-year time period. Our work revealed significant unrecorded foreign sales. We were able to document shipments of goods from the company with the cash from the sales being diverted to offshore banks. As a result of our work, a very favorable settlement arrangement was reached.
  • Engaged to quantify a bank’s misappropriated funds into an individual’s investment sweep account as part of a lawsuit filed against that individual. This involved a thorough analysis of various deposit accounts, tax returns, and investment statements to quantify the misappropriation. Additionally, the team examined the individual’s personal and business tax returns in relation to the account activity in order to determine the individual’s fraudulent intent.
  • Engaged by workout consultant to assist Mexican counsel to review and assess claims related to a dispute over construction services for the development of a golf course in Mexico. Conducted an analysis of claims by the contractor which revealed unauthorized activity and significant billings based on fictitious documentation. Issued a report with conclusions that the contractor created unsupported change order letters after the fact, in an attempt to justify the unauthorized scope changes. Also performed background investigations of the contractor, their U.S. and Mexican operations and specific principals involved. We conducted interviews with informants and prior employees related to the contractor activities during the construction period. Working with the Mexican counsel and the workout consultants, we were able to obtain information that confirmed kickback payments and other irregularities that were common during the project.
  • A local bank financed the manufacturing business of a Phoenix-based company that manufactured products for the housing industry. At the conclusion of the lending relationship between the bank and the manufacturing company, a dispute arose. The manufacturing company filed suit against the bank. Analyzed the financial condition of the manufacturing company over the time period leading up to the company’s financial problems. Assisted in discovery of the required financial information and prepared an expert report of findings. Also reviewed and rebutted a business valuation prepared by the plaintiff’s expert. The case was settled prior to trial.
  • Performed an extensive business review of a health system based in Los Angeles, California. This review was designed to determine the financial health of the system on behalf of a creditor organization. The review consisted of related party transaction analysis, financial statement review and trend analysis and validation of significant liabilities. Our review also included in-depth analysis of the Medicare and Medicaid reimbursement since these two payers accounted for more than 85% of the patients treated at the health systems hospitals.
  • Engaged by the receiver of a mortgage company and related investment partnerships to analyze potentially fraudulent loan transactions. Received in excess of 40 loan files and documented the cash flows and inter-partnership transactions. A database of all loans reviewed was created for the receiver. Assisted in dispositions of parties involved. Work was utilized in the eventual incarceration of the owner.

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