Capitalizing on Finding Fraud


Forensic accounting firm sees growth as a result of business scandals

The Business Journal of Milwaukee
By Jennifer Batog

Tracy Coenen always pictured herself working in the criminal justice field, perhaps as a prison warden. Then, in her sophomore year studying criminology at Marquette University, she took a course on financial crime investigations and was hooked.

She’d always been strong in math, and as a child loved to ask questions. Seven years ago she combined those two loves and formed Sequence Inc., Milwaukee, which provides forensic accounting services to attorneys and their clients.

Now Coenen is building a strong national reputation in the industry and is expanding her client base to include investors and analysts, as well as clients on the East and West coasts. She uses the Internet, speaking engagements, publishing and advertising to gain name recognition. She also is writing a book on fraud that is expected to come out March 2008.

“My goal is if people hear fraud, they’d think of Tracy,” she said.

Coenen worked as a probation officer, for the Internal Revenue Service, for accounting firm Arthur Andersen as an auditor and for forensic accounting firm Peters & Associates, Milwaukee, before starting Sequence.

Although she learned a great deal from her early jobs, Coenen said after several years in the corporate world, she realized it would be better to work for herself.

“I wasn’t meant to be anyone’s employee,” she said.

When Coenen started Sequence in 2000, she had no money and no clients. Her start-up costs were minimal — she bought a laptop computer and a copy machine. She worked out of her home, using a post office box as the company’s address.

She worked at a temporary agency, did people’s taxes and taught accounting courses at Bryant & Stratton College, Milwaukee, and Concordia University, Mequon, to make ends meet while she got the business going. She was able to give up temping after about five months.

Coenen opened a Chicago office in 2005, and she’s worked on six to eight cases for clients there.

In Sequence’s early days, Coenen spent most of her time networking. She attended local chambers of commerce meetings, Metropolitan Milwaukee Association of Commerce meetings and bar association meetings to build clientele.

Now, most of her business comes from referrals. She also speaks at conferences around the country, has a blog and contributes to numerous industry publications to drum up business. She spends about $20,000 a year advertising in trade publications in Milwaukee and Chicago.

Creating perception
One early issue Coenen faced was the perception of being a one-person small business. Because many of the cases Coenen takes can go on for a year or more, clients needed confidence that Sequence would still exist.

Having a post office box rather than a physical office hindered the business’ growth somewhat, Coenen said. She moved to an office in Milwaukee’s 3rd Ward in 2002.

“That made a huge difference,” she said. “I was now a real business. I became smarter in everyone else’s eyes.”

Sequence had about five or six cases during its first year. That’s grown to between 15 and 20 cases, Coenen said. The firm’s revenue also has had continued double-digit growth. Coenen expects to see 10 percent to 20 percent growth in revenue this year.

Luke Chiarelli, an attorney at Mawicke & Goisman S.C., Milwaukee, has worked with Coenen several times over the last six years. He found her through word of mouth, talking with former Arthur Andersen colleagues.

Chiarelli said he chose Coenen because he was impressed with her strategy for handling the case, which involved re-creating a client’s tax records from scratch because the originals had been destroyed over the years. He also was impressed with her ability to explain her findings in a way that could be understood.

“If you have someone who has some common sense who can explain why the answer is given a certain way, that’s a true value,” he said. “She’s not hamstrung by past practices, she’s very creative.”

Business scandals

Setting up shop just a year before the collapse of Enron and scandals at other large firms such as Tyco and WorldCom helped Coenen’s business, Chiarelli said. Those scandals also made the business community more aware of the chance for fraud, which means more businesses will be looking for the

“This will never go out of style,” Chiarelli said. “Identical stuff happens at the two-person business. When they fail, someone wants to know why, and Tracy has a job forever.”

Although Coenen is working to expand her clientele and gain more of a national reputation, she still wants to remain small. She has no employees, and plans to keep it that way. She had hired several administrative personnel early on, but realized she didn’t want the responsibility of having employees.

Now that she’s established, Coenen can be selective about the cases she takes, which makes it easier to balance a diverse client list spread across the country.

“I really enjoy what I do,” she said. “It can be a grind, but what I really like is finding that smoking gun, that piece that ties it all together. My work is so fun, it’s not really work.”

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