03 Jun

Milwaukee Public Schools Money Problems

For decades Milwaukee Public Schools has been failing to educate children, with some of the worst student performance in the country. And for decades, we have been told that money is the problem. MPS is a “poor” district. If only they had more money, the children would do better.

It’s always been a lie. All you have to do is look at how much MPS spends per student.

Typical spending in the U.S. is $12,000 per child per school year. (Most private schools spend much less and have much better outcomes.) Spending per pupil in fiscal 2017 (the school year that ended in 2018) was $12,201 nationally, and $11,968 in Wisconsin. Read More

20 May

Former Law Enforcement Working as Forensic Accountants

A comment on an old article here inspired me to resurrect the topic today. Do former law enforcement officers make better forensic accountants? I think that having “former law enforcement” in your LinkedIn profile lends some credibility to the forensic accountant, but does it really mean as much as people think it does?

Certainly, experience in law enforcement (especially a lengthy career) can be helpful. There are skills that are learned and developed over time. But the question for the forensic accountant is: How much of that law enforcement experience was gained doing financial investigations? Were the investigative techniques relevant to private sector investigations? I’ve learned that digging through databases and resources available only to law enforcement isn’t the same thing as doing a deep dive into the numbers to unravel a complex fraud scheme. Read More

09 May

Strip Clubs, Milwaukee Aldermen, and Bribes

For years the owners of strip club Silk Exotic were trying to open a strip club in downtown Milwaukee. They knew there was a market for what they had to offer. There were already a handful of strip clubs in or close to downtown, but for some reason, they couldn’t get approved.

Eventually, the Silk owners won a jury verdict of more than $400,000 against the city, but that still didn’t get them their strip club. Milwaukee appealed the verdict and lost. When they added attorneys fees to the jury award, the city was on the hook for more than $968,000.

Milwaukee didn’t want to pay Silk the money, so Silk’s owners made them an offer: Let them open a strip club, and they’d forgo the jury award. Silk finally opened its strip club in downtown Milwaukee last year. Read More

07 May

IRS Expenditures Method to Determine Income

When the IRS believes a taxpayer has unreported income, they will use alternative methods to attempt to determine the true income. One of those methods is the Expenditures Method. Tracy Coenen explains the basic methodology in this video. Note that this method of calculating income can be used in a variety of cases that involve allegations of hidden income including divorce, money laundering, and income tax fraud.

04 May

NACVA Value Examiner: Practicing Solo

Earlier this year I was interviewed by Rod Burkert for NACVA’s magazine, Value Examiner. Practicing Solo is a feature on solo practitioners, with the idea that it will help others who are solo or considering going solo.

Snapshot:

  • My credentials: CPA, CFF
  • I’m located in: Milwaukee and Chicago (I got my start and live in Milwaukee, but I do about half of my work in Chicago)
  • I’ve been on my own since: January 2000
  • Name of my firm: Sequence Inc. Forensic Accounting (www.sequenceinc.com)
  • My practice sweet spot is: Exclusively forensic accounting

Rod: So the BVFLS profession isn’t exactly a calling. Tell us about your background and how you got to where you are today.

Tracy: For me, it absolutely felt like a calling. I am fascinated with the criminal justice system and I wanted to be a part of it. I majored in Criminology and Law Studies at Marquette University, and I saw myself becoming a prison warden someday. As a sophomore, I took a class called Financial Crime Investigation, and I was hooked. I started taking accounting and economics courses so that I could work toward a forensic accounting career. I worked as a probation officer while I worked on an MBA at night, finishing up the requirements needed to sit for the CPA exam.

My first job in the accounting world was as an auditor for Arthur Andersen. I got as much experience as I could while I was there, and then I moved to a small forensic accounting firm so I could get started in my desired specialty. After a couple of years, I left to start my own practice. I had visions of growing my practice by adding staff, but after working with a few employees, I decided that I liked the solo practitioner life better. I’ve been solo for years now, and I wouldn’t have it any other way.

I like being responsible for everything on my cases. I have excellent quality control, and I know the numbers inside and out. When it comes time for depositions and trial, I can answer the questions about the numbers confidently. Read More

25 Apr

Expert Witnesses and Social Media

Ask attorneys what they think of social media, and you’ll get a wide range of responses. Some are actively involved, others are avid readers, and some stay as far away from it as possible. There is still a fair amount of reluctance to get involved, whether it is a more “social” type of social media (like Facebook or Instagram) or a more professional one (like LinkedIn or possibly Twitter). Also included in social media is blogging, something that has been around since the late 90s, but which many lawyers and experts still refuse to be actively involved in.

Social media is an opportunity to write about what you know and promote your business and expertise. You can engage in dialogue with people people from far away places. There is so much that can be learned from interactions on social media, and so many relationships that can be developed (which would have previously been nearly impossible).

But of course, there are pitfalls. There is a common bias against social media: That it’s simply a waste of time because it is mostly about socializing and games. While there is definitely a very personal component to Twitter, Facebook, and other social media sites, their utility goes far beyond being a neat way to kill some time.

Social media is being actively and aggressively used by people who have a business reason to be there. Many participate because they love the exchange of knowledge and are eager to fill others in on current events, industry happenings, or interesting news stories. Others participate mostly to promote their companies and brands in some way. Some join in the discussion to raise their professional profiles and to gain credibility in their fields. Read More