Tracy Coenen explains Ponzi schemes, a specific type of investment scheme in which the perpetrator recruits investors and then pays their “investment returns” with money from new investors.
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.
Free 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.)
To summarize Medifast’s bogus case against the defendants:
- In May 2009, Barry Minkow and his Fraud Discovery Institute released a report about Medifast Inc. and its multi-level marketing arm called Take Shape For Life (TSFL)
- In September 2009, I wrote an article on this blog about Medifast and TSFL, exposing the fraud behind multi-level marketing (MLM)
- In February 2010, Medifast sued Barry Minkow, Robert Fitzpatrick, me, and others with claims of defamation, violations of California Corporations Code and Unfair Business Practices.
- Approximately two months later, my attorneys filed an anti-SLAPP motion.
Last year, infamous “MLM Lawyer” Kevin Grimes was sued by the receiver in the Zeek Rewards Ponzi scheme case. The gist of the suit was that Grimes knew or should have known that Zeek Rewards “…was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and/or a Ponzi scheme.” The lawsuit alleged that Kevin Grimes and his firm Grimes & Reese PLLC (that firm is now R&R Law Group, while Grimes has joined the scumbag MLM attorneys at Thompson & Burton) knew that ZeekRewards was perpetrating a Ponzi scheme and provided the company with a bogus “compliance program” meant to make the company look legitimate.
The case has been settled, and Grimes will pay $1.175 to the receiver. Via Patrick Pretty:
If you haven’t heard by now, internal fraud is expensive, costing companies an average of 6 percent of revenues each year. Employees are in an excellent position to steal the company blind. Particularly for those in upper management, access to assets is easy to come by.
With an estimated $3.7 trillion stolen annually by employees around the globe, companies should be highly motivated to invest in fraud prevention. Creating and implementing effective policies and procedures is not cheap, but it is far less expensive than exposure to internal fraud.
Companies should develop a comprehensive fraud prevention program that impacts all areas of a company. Such a program has three critical parts: education, investigation and proactive prevention.
One of the chief concerns in a divorce or child custody case is identifying the true income of one or both of the parties. It is not unusual for such a case to include allegations of hidden income or assets. It is common for a closely held business to suspiciously encounter declining sales and profits following the filing of a family law case.In each of these instances, properly determining the income of the party is critical to getting a fair and equitable settlement, maintenance award, or child support award. Until you have the correct numbers, the attorney may find it very difficult to decide what is fair or in the best interest of the client.
Tracy Coenen talks about the steps she takes when she starts a new expert witness case. What documents should you ask for? What should you evaluate first?
Man on Top is a documentary about multi-level markeing (MLM). It being directed and produced by Paul Mathieu. The film tells the story of MLM and how it has cheated consumers out of billions of dollars with its fake business opportunity:
Man On Top is the story of multi-level marketing, the world’s most notorious business model.
A product of the post-war 1950’s economic boom, the proliferation of these thinly veiled pyramid schemes has enabled companies such as Amway and Herbalife to prey upon the hopes, dreams, and ambitions of millions of unsuspecting citizens, both in the U.S. and worldwide.
These economic cults, disguised as legitimate business opportunities, use coercive psychological tactics to trap the unsuspecting participants into a culture of deceit that promises a false American Dream. The results: empty bank accounts, shattered friendships, and billions of dollars of annual profit for the founders of MLM’s.
The film will feature whistleblowers, industry experts, government regulators, and MLM participants who detail their experiences within the tumultuous, dog-eat-dog business of multi-level marketing.
Our help is needed! Please contribute to the Man on Top Kickstarter campaign here.
Bank statements can be invaluable in evaluating an individual’s income for divorce and child support cases. They can help evaluate the person’s income, but an analysis of the expenditures is important too. Tracy Coenen talks about some of the specific ways the data can be analyzed.
One common misconception among small business owners is that fraud prevention is expensive. And like anything else in this world, it can be expensive. A company that strives to eliminate virtually all opportunities for fraud by employees can spend a chunk of money doing so.
But it’s not always necessary to spend lots of money on fraud prevention. And it’s not always possible for a small business owner to spend a lot on fraud prevention. Let’s face it… budgets are tight and big new projects aren’t often possible.