Where does a forensic accountant begin when trying to calculate the income available for support in a divorce or child support case? Tracy Coenen talks about some of the issues encountered in trying to evaluate income.
Back in 2008, I wrote several articles about the suspicious activities of Utah Attorney General Mark Shurtleff. Specifically, I questioned the campaign contributions her received from Pre-Paid Legal Services (now Legal Shield), a company that I suggested was a thinly veiled pyramid scheme. I also criticized campaign contributions from Overstock.com. Then there was the whole thing with DigitalBridge.
It took some time, but it appears that the law may have caught up with former Utah Attorney General Mark Shurtleff at last. Mark Shurtleff was arrested this morning along with another former Utah Attorney General, John Swallow.
According to the Salt Lake Tribune:
Attempts to silence critics of multi-level marketing companies (often referred to as legalized pyramid schemes) are nothing new. I have been on the receiving end of numerous threats and one very large legal action for my criticism of MLMs. Medifast and Take Shape For Life had a huge loss in their $270 million lawsuit against me. I was also threatened by MLM Lawyer Gerry Nehra for my criticism of Shop to Earn. (Too bad Gerry Nehra is now on the receiving end of legal action for his MLM involvement!) Multi-level marketing company Mona Vie levied these threats. Then there was this whole situation.
The latest crybaby is World Ventures, a multi-level marketing company which says it is “…the world’s largest direct seller of curated group travel, with more than 120,000 Independent Representatives in over 24 countries and we are still growing…..”
Like any good MLM, WorldVentures simply cannot allow people to criticize the company. Negative opinions must be met with swift legal action!
An investigative policy is an important tool to help manage the process of initiating a corporate fraud investigation. Doing so will help bring uniformity to the evaluation of fraud allegations, and it will help guide management through the decision making relative to the claims.
The first step in creating an investigative policy is drafting a list of red flags that might cause management to investigate. For example, a credible tip from an employee or vendor would be an important red flag which needs follow up.
The policy should help management determine what “credible” means in these situations. Does the tip come from someone who is usually reliable and honest? Does the tip make sense in light of known facts about the employees and the company? Are there sufficient details about the allegations so as to lend credibility to them? Was any credible evidence submitted with the tip?
When a business owner or executive encounters proof of a fraud-in-progress, a natural reaction is often to immediately begin investigating. After all, someone has to get to the bottom of the situation. Yet that’s not usually the best way to go.
Just like on television, we need to give owners and executives a warning that they should not try this at home. It’s tempting to dig right into a potential fraud and start to unravel what’s happened. While the immediate gathering of information is helpful to a fraud investigator, when an inexperienced person tries to go further and actually investigate, bad things can happen.
The biggest reason why company personnel should not try to investigate a fraud on their own is that a good investigation takes an experienced investigator. There are special skills that fraud investigators have, and it’s almost always best to bring in the real experts. Company personnel sometimes inadvertently destroy or damage evidence during their investigation, so that’s another reason to stop amateurs from investigating.
Another victory for Tracy Coenen in the malicious lawsuit filed more than 4 years ago by Medifast (NYSE: MED) related to their Take Shape for Life business unit. In 2011, I was dismissed from the lawsuit following my successful filing and argument of an anti-SLAPP motion. Medifast immediately appealed that decision to the United States Court of Appeals for the Ninth Circuit.
Today, my dismissal from the Medifast lawsuit was affirmed by the Court of Appeals, which said:
5. Finally, we affirm the district court’s order granting of Coenen’s anti-SLAPP motion. Coenen’s statements were either not libelous per se or were republications for which she should be afforded immunity under the CDA.
6. Appellee Coenen shall recover her costs on appeal. All the other parties shall bear their own costs on appeal.
Medifast can suck it.
Vexatious litigant and extortionist Crystal Cox continues to lose her many looney legal battles. She filed a slew of similar lawsuits against a large group of people Cox thought were engaged in some grand conspiracy to deprive her of a right to earn a living. (Note: Her inability to earn a living is completely her own doing.) Those suits were all thrown out of court one by one.
The lawsuit in which Marc Randazza, his wife, and their young daughter are suing Crystal Cox for cyberpiracy and cybersquatting remains alive, but Cox keeps getting slapped down. Most recently, her order demanding that the court force the FBI or an Attorney General to begin an investigation into Cox and Randazza was denied.
When a spouse involved in a divorce owns a business, the finances of that business must be analyzed. A Business Lifestyle Analysis can be done to determine the true income of the company and find out where the money is really going. In this video, Tracy Coenen talks about how she analyzes the detailed accounting records of a business.
Closely held businesses present special challenges in the family law setting. Typically, only one spouse is actively involved in the business. Therefore, not only does the spouse control the family’s finances, he or she also controls all of the records of the business. When a spouse is attempting to quantify the income from the business or the value of the business, the spouse who works actively in the business can purposely (and often very effectively) obstruct attempts to get accurate and complete data.
Certain types of businesses, such as restaurants and retail stores, can be prone to manipulation because they have so many cash transactions. Construction companies, real estate ventures, and auto dealerships are notorious for “creative” bookkeeping. Professional service providers, such as doctors, dentists, and attorneys are at risk for financial maneuvering because it is so difficult to verify the amount of professional services actually provided to patients or clients.
Any business that is closely held and has finances that are easily manipulated by the owner is at risk. If this happens, the “out” spouse is left looking for alternatives to get to the bottom of the finances. Techniques used in a personal lifestyle analysis can also be applied to businesses to ferret out the truth about the money.
My new book, Lifestyle Analysis in Divorce Cases: Investigating Spending and Finding Hidden Income and Assets, is being published by the American Bar Association this summer. It will be the only book available on the topic of lifestyle analysis in divorce cases. While there are plenty of excellent books on financial issues in divorce, none of them focuses on the lifestyle analysis, how it is done, and how the results may be used in court.
This book focuses solely on the lifestyle analysis in the family law case, although other services from a financial professional may also be needed in a case. The lifestyle analysis is the process of tabulating and analyzing the income and expenses of the parties. The lifestyle analysis is then used to determine the standard of living of the parties, which will influence support calculations, and possibly property division.