26 Jul

Financial Analysis in White Collar Crime Cases

White collar crime cases tend to focus on the flow of money. Government investigators analyze the finances of a company or individual to determine where money came from and where it went. It is this trail of money that leads to evidence of a crime.

Sometimes the financial evidence is direct, but often it is indirect. Consider a case of alleged tax fraud, in which the government is trying to prove that a person or business had unreported income. The evidence may be large unexplained deposits to a bank account. If the source of the funds is unknown, the government may consider the deposits indirect evidence of unreported taxable income. Making such assumptions is often necessary when investigating financial frauds, as those committing fraud deliberately try to hide the true sources and uses of funds. Read More

24 Jul

Analyzing Tax Returns in Divorces

Income tax returns are an important piece of financial information in a divorce or child support case. There is so much information that can be obtained from the tax returns, and if we have several years of data, we can make comparisons from year-to-year. In the video below, Tracy talks about the financial data she analyzes on the income tax returns and what these items may tell us about the financial situation of the family.

17 Jul

Claimed Income Versus Documented Income in Divorce

claimed income documented incomeChild support, spousal support, and property division are often evaluated in light of the income of the each of the parties to a divorce.The parties fill out financial disclosure forms and purport to tell the court and the spouse the truth about their income. If one spouse is not truthful about his or her income, this can provide a great opportunity for the other side.

The spouse immediately appears to not be credible, and this can affect the entire case. If he or she is lying about income, he or she may be lying about other important things in the divorce.

The first step in evaluating claimed income is comparing it to documents that can confirm or refute the claims. This may include: Read More

11 Jul

Follow the Money, Find the Fraud

Forensic accounting existed quietly for a long time before the general public started to become aware of it. Twenty years ago when the frauds of Enron, WorldCom, and Tyco became big news, the work of forensic accountants was finally given the spotlight. It has been a slow evolution, but the general public is becoming more and more informed about what we do.

Would it surprise you to know that 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. Read More

09 Jul

Bank Deposits Method to Find Unreported Income

When the Internal Revenue Services suspects that a taxpayer has unreported income, the agents can use one of several methods to uncover that income. These methods can also be used to help calculate hidden income in a divorce or child support case. One such method used to determine unreported income is the bank deposits method, in which the forensic accountant analyzes bank deposits. In the video below, Tracy explains how this is done.

01 Jul

Financial Analysis in Litigation

The financial portion of a lawsuit is often high-stakes. This is especially true in cases of divorce, breach of contract, securities fraud, tax fraud, money laundering, and white collar criminal defense. Whether the other side is an individual, a company, or the government, you need an accurate analysis of the numbers for the benefit of your client.

There is almost always a story behind the numbers. Things are not always as they appear, and it is unwise to take the financial story at face value. A case can be won or lost based on your ability to find out the hidden truth about the numbers.

Finding the Data

Getting your hands on the right financial data depends on knowing what to ask for. The financial statements and tax returns are the obvious places to start. While they may not always be truthful, they still hold many clues to the financial story. Read More