31 Mar

“Investigative Journalist” Crystal Cox Attacks Attorney Kevin D. Padrick

Attorney Kevin D. Padrick

Attorney Kevin Padrick

I am no stranger to defamation lawsuits for writings on a blog. I have been threatened multiple times for writing my opinions and the facts as I know them about various companies. I have even been wrongly sued, with a judge dismissing me from the case, but not until after substantial legal fees were incurred to defend my good name.

So when it comes to allegations of defamation launched against bloggers, I take the matters seriously. Crystal Cox bills herself as an “investigative journalist,” but has done a whole lot of things that don’t have anything to do with investigation or journalism. Read More

30 Mar

Why Didn’t the Auditors Find the Fraud?

Companies and organizations that are hit with employee fraud, including embezzlement, asset misappropriation, and financial statement manipulation are often surprised that the incident occurred. Even more surprising to executives and boards of directors is the fact that their auditors didn’t find the fraud sooner, or didn’t find it at all. After all, isn’t that what auditors are supposed to do?

In one case, the bookkeeper for a non-profit organization was stealing for several years and cleverly covering her tracks. She didn’t let the checks get too large, and she divided the check amounts between many accounts so that the entries in each account would be very small. She knew that if the amounts were small enough, they probably would not be carefully examined during the annual audits. Read More

29 Mar

Quick Tip: Identifying Fraud Risks in a Fraud Investigation

Recently I recorded this QuckTip for the Consultants Training Institute, the educational arm of the National Association of Certified Valuators and Analysts (NACVA). I was asked to give a few pointers on how fraud investigators can begin investigations when they are not sure where a fraud may have occurred. Not every investigation starts with a definitive allegation of fraud. Sometimes the fraud examiner must evaluate fraud risks to determine where to start looking for fraud.

Read More

27 Mar

Identifying Red Flags of Fraud

Would you recognize the clues that your client has been ripped off by one of its employees? Or would management conduct business as usual, blindly trusting their employees?

Companies make the mistake of not actively searching for fraud. They tend to trust their employees and trust the procedures in place to safeguard company assets.

It may be good business to trust employees and empower them to make real contributions to the growth of the company. However, it is not wise to turn a blind eye to signs that a trusted employee may be stealing. Read More

23 Mar

Marc Randazza, First Amendment Lawyer

Randazza Legal GroupMarc J. Randazza is a truly amazing First Amendment Attorney. His firm, Randazza Legal Group is based in Las Vegas, but they handle cases across the country. It is impossible to appreciate how brilliant Marc is unless you have actually worked with him, and I have had that honor.

Marc and his team blog at The Legal Satyricon, a no-holds-barred publication where the lawyers speak their minds on all sorts of current events. He is an amazing writer, not just on the blog. I have had the pleasure of reading several of Marc’s briefs, and they are engaging, entertaining, and compelling. Read More

22 Mar

Auditor Rotation Won’t Make Audits Better

Last week, CFO Magazine published an article online about CFOs opposing the potential proposal by the  Public Company Accounting Oversight Board (PCAOB) requiring companies to switch auditors every 5 to 10 years.  More than 625 comment letters, many from CFOs, controllers, chief accounting officers, and audit committee chairs,  have been submitted to PCAOB since the organization raised the issue of mandatory auditor rotation in August.

The PCAOB is suggesting that forcing companies to change auditors every few years will make the audits better. They say that a new accounting firm would equal a fresh set of eyes, and therefore a more skeptical audit. Read More

19 Mar

Finding Bank Accounts and Financial Records

I get asked all the time whether I can find hidden bank accounts around the world.  The answer is mostly no. Brian Willingham of Diligentia Group wrote a helpful article about this last year, entitled “Can a Private Investigator Get Bank Records or Account Information?”. His answer is also no.

There are laws in place to protect your financial privacy. So if a private investigator, forensic accountant, or other professional tells you that they can find hidden bank accounts, you can be assured that they are using dishonest and illegal means to do so. Read More

16 Mar

Common Sense in Internal Investigations

Last week Mike Volkov had a great post on his blog about using common sense in your internal investigations. Mike is an FCPA expert, and the guy you want to go to if your company is the target of a government investigation or inquiry.

What makes Mike the better choice than the other attorneys who sell their services for internal investigations and compliance issues (and there are a lot of them!) is his level of experience. He was a federal prosecutor for a long time, and has deep experience with government prosecutions. You don’t want someone who just knows how to push paper. You need someone who knows the government process and how parts of the investigation are going to happen, what chance there may be for settlement, and how the government investigators are going to react to certain pieces of information (beyond the laws, and into the reality). Read More

13 Mar

Article at CFO.com: Taking on Fraud Probes Without Interfering

 How CFOs can assist independent investigators and not mess up the integrity of the results.

By Tracy Coenen, Contributing Editor at CFO.com

With the government’s increased focus on ferreting out corporate fraud, companies face a higher risk of gigantic defense costs, negative media reports, and substantial civil or criminal penalties. Cases involving bribery and corruption under the Foreign Corrupt Practices Act, for example, are costing companies their reputations and their profits.

It takes only one credible whistleblower with access to enough documentation to make a compelling case to a government agency to get the ball rolling. The saving grace, however, can be an aggressive compliance program, complete with thorough internal investigations of tips and red flags, plus swift and certain remediation. Read More