01 Jun

Expert Witness Testimony: Communicating to the Court

fraud-magazine-acfeThe best financial expert witnesses help win cases by artfully and simply communicating the facts through written reports and oral testimonies. And you can learn how to do it.

While waiting in the hallway outside the courtroom to testify as an expert witness, I thought of all the ways my testimony could go wrong. I had hours to contemplate opposing counsel’s questions for me. It was my first time testifying, and I didn’t want to blow it. But I relaxed as I eased into the witness chair and stole a glance at the jury. They were ordinary people who were just hoping to understand my calculations. I led them simply through the financial matters. From the looks on their faces, I think they understood.

In my testimony, I closely followed the main points of my prepared report. The counsel who had hired me showed large exhibits from my report, which illustrated my points. We easily walked the jury (and the judge) through the numbers. Opposing counsel tried but failed to confuse the jury members. I knew I had hit a home run when I saw the foreman nodding each time I made a point. His new understanding of the issues would prove invaluable during jury deliberations.

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Competent and convincing expert witnesses are a vital part of cases involving economic damages and other financial calculations. Traditional accounting, financial and fraud examination skills just aren’t enough when it comes to litigation. A financial expert witness must be able to qualify as an expert in court and then effectively communicate in a written report and oral testimony to an opposing lawyer, a judge, and a jury who probably aren’t accountants or fraud examiners. Read More

21 Dec

For Students and Job Seekers: Becoming a Fraud Investigator

I routinely get emails from students, job seekers, or the gainfully employed who want to make a career change… all asking me for advice on getting into the field of forensic accounting and fraud investigation.

Here are my top three tips for getting into this field: Read More

27 Jun

Patrick Byrne: Do As I Say, Not As I Do.

Patrick Byrne, CEO of Overstock.com (NASDAQ:OSTK) has been on a crusade against naked short selling for a couple of years (or more?). It is currently his position that naked short selling is bad. He confirms his belief in this statement on Overstock.com:

Patrick Byrne is waging a fight with Wall Street over naked short selling. He believes that, through the practice of naked shorting, Wall Street is cheating Main Street America and destroying small companies for a profit. Byrne feels that the SEC is failing to protect retail investors and small companies because it has been captured by Wall Street, and that the New York financial press is similarly co-opted. Byrne believes that the SEC’s efforts to eliminate this abusive practice are falling short, not simply for Overstock (which has itself been on the Regulation SHO Threshold list for over two years), but in a way that creates the possibility of systemic risk for our financial world.

So naked short selling is an “abusive practice”? (Notice that there are no qualifiers in the statement above. It simply says that naked shorting is bad.) Read More

21 Jan

Airlines likely to increase fares due to “congestion fees”

Last week I posted on WalletPop about a proposed “congestion fee” that airlines would have to pay at airports. Right now they pay a landing fee based upon the weight of the plane. With the congestion fee, they would instead pay a fee based upon the day of week, time of day, and congestion at the airport during landing. Simply put: During peak travel days and times, airlines will pay more for each plane they land.

Several comments have been left on the post, with readers generally arguing about why airlines charge so much to fly, why they’re not profitable, and what the lowly consumer can do about it.

One reader left this excellent comment that I think does a marvelous job of summarizing the problem with the U.S. airline industry:

Two issues were noted in previous posts:
(1) Airlines treating us like cattle because it maximizes their profits. (2) Airline costs are high because of labor costs.

Let’s address these problems – unions exist because labor organized to fight management abuses – many of them salary related. (And we all know cases of rotten management somewhere!) Businesses (in theory) exist to return profits to stockholders. Simplify the equation to a single boss and a single worker – a boss offers a salary for a given unit of work, and a worker offers work for a given unit of salary. If the worker asks for too much, the boss hires a different worker. If the boss offers too little, then the worker tries to find work elsewhere. Looking at the problem from the point of a single boss and worker, it’s simple….

But we are not looking at a simple equation. Workers are expecting pay scales based on airlines past successes. Airlines have costs imposed on them due to past regulations and contracts which no longer are sustainable. Government has not defined the markets in a way that natural forces check and balance both airline management and labor. Nor has it managed resources well (landing slots, transport to airports, etc.). Couple this with an American culture that rewards false economies (such as buying things at the lowest price without regard to quality), and we’ve seen air travel go to blazes.

How should we address this in a way to save real money, and yet use markets to our advantage? For me, it’s choosing not to use airlines for shorter trips. It also includes choosing my airports carefully (and I can do so in the NYC region), which may include driving out of my way to avoid airports with excessive congestion. If we start acting rationally, both airlines and their labor will start doing the same. And we may see realistic, sustainable, reasonably inexpensive fares with quality service return…..

I couldn’t have said it better. The airlines have a cost structure that they can’t support and real customer service is practically non-existent. How long can the airlines tread water?

I think a large-scale overhaul of the industry is necessary, but it will inflict great pain on the consumers while it happens. It may even require the airlines to “start over”… essentially completely overhauling their process and their sales force. While they do that, I expect that flights will be in short supply and prices will be very high.

08 Oct

Milwaukee Police Department stops asking about immigration status

This is crazy. Using an “it’s not our job” excuse, the Milwaukee Police Department now has a policy that police officers will not ask about immigration status.

“Community activists” say that people who are stopped for traffic violations or crimes shouldn’t be asked about immigration status because it’s “unrelated.” (I don’t know how often the breaking of federal laws is deemed “unrelated” and therefore police should turn a blind eye.)

It’s not just Milwaukee that’s doing this. Other police departments are caving to the pressure to not ask about immigration status. Read More

23 Mar

On Making Money As a Fraud Investigator

The recent publication of a report detailing the results of an investigation of Usana Health Sciences done by Barry Minkow, Fraud Discovery Institue, and other professionals has prompted some criticism.

One criticism I’ve seen is the fact that *gasp* the Fraud Discovery Institute is a for-profit corporation and there was a paying client in the Usana matter.

When did it become wrong to get paid for investigating fraud? You see, I investigate fraud. That’s my job. It’s how I make a living. I’m good at it. Because I’m good at it, people are willing to pay me money to do it. It is up to me to maintain objectivity in my investigations and reporting. Even when I have paying clients. Read More

22 Nov

Press Release: Fraud Investigator and Former Mary Kay Salesperson Joins Pyramid Scheme Alert Board of Advisors

Milwaukee, WI November 22, 2006 . Pyramid Scheme Alert announces that Tracy L. Coenen, CPA, MBA, CFE has been named to the organization.s Board of Advisors. Her consumer education website, PinkTruth.com, which exposes and analyzes the business and recruiting practices of Mary Kay and the plight of Mary Kay salespeople, has received over 4,000 visitors a day.

Pyramid Scheme Alert is one of the most widely recognized and highly respected organizations fighting against pyramid schemes and abusive multi-level marketing companies. The organization is led by Robert FitzPatrick, author of the book False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes. Read More