Signs That a Company Has Been Ripped Off

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Written by Tracy L. Coenen, CPA, CFF

Wisconsin Law Journal

How would you know if your company was being looted by a dishonest employee? Most companies miss all of the warning signs that could help stop a fraud early.

The Association of Certified Fraud Examiners reports that the average fraud scheme within a company lasts 18 months. That’s one year-and-a-half that one or more employees are stealing from the company without being caught. In that period of time, the average internal fraud causes losses of $159,000. Imagine how much damage could be done to your company in that amount of time. Continue reading

Sources of Information in Fraud Investigations

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Written by Tracy L. Coenen, CPA, CFF

Wisconsin Law Journal

When you think of information in an internal fraud investigation, you most likely think of things like a company’s internal records. These include accounting documents, personnel files, payroll records, accounting system information, and internal memos. While these items are key parts of an internal investigation, they are not the only tools a fraud investigator may use.

Most people don’t think about all the other records available to assist in an investigation. There are many public and non-public records that can aid the investigator in determining who was involved, where the money went, and what the motive for the fraud may have been. These records are invaluable to the investigator, and often play a key role in determining the details of a fraud. Continue reading

You Have the Data, Now What?

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Many of the cases I work currently focus on the tracing of funds through multiple bank, brokerage, and credit card accounts. I am typically working with tens of thousands of transactions at a time, so the sheer volume of the data could be overwhelming.

I have put together a proprietary software system that enables me to capture manage, and analyze the data. The system eliminates the need for staff assistance (and the dangers that go along with having multiple people touch the database and possibly corrupt the data). How does the system work? Read on.

Getting the Data

The process of discovery can be long and agonizing for everyone.  There is often a push and pull between the parties in the discovery process, as opposing counsel rarely wants to voluntarily give up damaging financial data.  It often takes several rounds of requests to get the information we seek. Continue reading

Ways to Help Prevent Corporate Fraud

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Executives have the means to commit and cover up the largest frauds. They have access to the information and computer systems, they have power over all employees and they have access to the money. The finance function is riddled with fraud risks and the company’s executives are in the best position to take advantage of those risks.

Because of the risk of losing large sums of money to fraud by executives, companies must ensure owners and boards of directors are actively involved in creating and maintaining an environment that is not conducive to fraud. This involves active oversight of daily operations, continuous monitoring of potential red flags of fraud and swift action when fraud is discovered. Continue reading

Follow the Money to Find the Fraud

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Forensic accounting has been around for decades, but only in the last ten to fifteen years have people become aware of the profession on a wide scale. Many of the techniques used by forensic accountants to investigate fraud and analyze the numbers are the same today as they were decades ago.

Computers have made things easier, as we can track, sort, and manipulate data faster. While software solutions for analyzing data, managing documents, and following the money are being used in investigations, they’re not being used to their full potential. This is obviously a missed opportunity for clients.

Old Fashioned Investigations
The old way of investigating fraud – the one that requires manual data analysis – is tried and true. Examining source documents is critical to finding out what really happened with the money. There is no substitute for the judgment, skepticism, and investigative intuition of a seasoned forensic accountant. Continue reading

The Price of Free Speech is $200,000

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medifast-lawsuit-check-to-tracy-coenenFree speech is a privilege we enjoy in the United States. But it is anything but free. My personal price for the right to express my opinion about Medifast, Inc. was 5 years of my life and nearly $200,000. (Of course, that doesn’t include the emotional toll that the case took, as Medifast’s malicious pursuit of its meritless case against me was clearly designed to ruin me professionally.)

Case Summary

To summarize Medifast’s bogus case against  the defendants:

Continue reading