Fraud Investigation and Forensic Accounting

Sequence Inc. provides fraud investigation and forensic accounting services to aid companies in detecting fraud, quantifying the fraud, determining the parties involved, gathering evidence, and presenting the findings to management, owners, executives, boards of directors, shareholders, and courts. Our fraud examination services differ significantly from the services of a “traditional” accounting firm. Our fraud analyses include a critical element: an intuitive ability to investigate fraud. While traditional accounting firms may have expertise in a particular industry, they do not necessarily have the experience to perform a competent investigation.

The services of Sequence Inc. are not industry-specific. We have completed fraud examination engagements in a wide variety of industries including  manufacturing, professional services, health care, insurance claims, retailing, investment management, banking, mortgage processing, non-profit, and construction. Sequence Inc. can be retained for either civil or criminal matters, and has been retained by both plaintiffs and defendants.

The firm assists with the following types of cases:

  • Corporate Fraud and Embezzlement – Tracy Coenen has examined many cases of fraudulent financial statements, embezzlement or employee theft, purchasing and procurement schemes, kickback and bribery schemes (both private and public sector), fictitious vendors or shell company schemes, theft of accounts receivable or accounts payable, pay-and-return schemes, excess charges by subcontractors, personal use of company resources, and expense reporting fraud. Sequence Inc. will conduct an examination to determine whether a fraud occurred, who was involved, how the fraud was committed, and how much has been lost.
  • Divorce and Family Law – We perform confidential investigations at the request of a spouse, using only legal means to gather information and documentation. Sequence Inc.’s divorce services include analysis of the source and use of funds, searching for unreported income, lifestyle analysis, dissipation claims, analysis and identification of property ownership, examination of business interests, and reconstruction of business books and records.
  • Financial Statement Examination – Sequence Inc. examines and evaluates financial statements, related schedules and notes, and other public company filings for potential red flags of fraud. During this examination, we will evaluate the quantitative and qualitative aspects of the financial statements and related filings. We may identify irregularities in financial statement data, material misrepresentations or omissions, incomplete or misleading disclosures, or application of Generally Accepted Accounting Principles (GAAP).
  • Financial Statement Reconstruction – Sequence Inc. is frequently retained to reconstruct financial statements from source documents. This includes bank statements, credit card statements, investment account statements, invoices, and other financial documentation. When accounting records are deemed unreliable, the most effective and efficient way to get to the bottom of a company’s finances is by doing a ground-up reconstruction of the financial statements.
  • Government Investigations (Defense) – We aid individuals and corporations in defending themselves against government investigations, including those started by the Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI), Internal Revenue Service (IRS), and state and local governments. Financial investigations of this nature are often complex, and it is in the best interest of the target of the investigation to have an expert of their own to examine the complicated financial issues. Sequence Inc. focuses on on detailed audits of the figures and calculations set forth by the government. Not only do we determine the accuracy of the numbers, we also evaluate the theories behind the crimes the government is attempting to prove.
  • Insurance Fraud – Sequence Inc. examines and evaluates insurance claims on behalf of claims examiners, public adjusters, and insurance company investigators (SIU). We have assisted with hundreds of insurance claims, recalculating insured losses and examining claims for evidence of fraud. We can calculate loss of net income, continuing operating expenses, and extra expenses. We also examine the financial and operating data for claims that are under suspicion of fraud. Our fraud experience related to commercial insurance claims includes the examination of claims for losses that did not occur, analysis of overstated claims, and the examination of financial motives for arson.
  • Internal Investigations and Regulatory Compliance – Sequence Inc. provides independent guidance in internally and externally initiated investigations, securities litigation, corporate governance, regulatory compliance, business intelligence and financial reporting. Specifically, we provide guidance on critical regulatory compliance issues such as SEC examinations and SEC enforcement actions, Foreign Corrupt Practices Act (FCPA), antitrust violations, anti-money laundering (AML), Sarbanes-Oxley (SOX), and audit committee investigations. Tracy’s forensic accounting and fraud investigation experience serves as the foundation to provide comprehensive services to clients to reconstruct financial data, investigate allegations of misconduct, gather evidence in response to regulatory inquiries and actions, and report the findings to management, boards of directors, regulators, judges, and juries.
  • Investment Schemes and Ponzi Schemes – A Ponzi scheme is an investment scam which promises extraordinarily high rates of return and often has questionable business activities.The returns paid to investors come from cash invested by new investors. The scheme must consistently grow in order to continue to fund the “interest payments” to investors, especially since the promoters usually skim substantial sums of money from the schemes for their own use. Eventually, the Ponzi scheme collapses when the promoters cannot generate enough new cash to keep the scam going. Sequence Inc. investigates Ponzi schemes on behalf of defrauded investors, tracing the flow of funds and searching for assets that may be recovered to reimburse investors for their losses.
  • Misappropriation of Fiduciary Duty – When an individual misuses her or his authority and power to cause financial losses for another, Sequence Inc. can help calculate the losses. We will conduct a fraud examination to determine the extent of the losses, if any in cases involving management fraud, trustee or power-of-attorney fraud, fraud or deception by family members, and shareholder, director, and officer fraud. As with our other fraud-related services, our firm will conduct an examination to determine what funds are missing, the disposition of the funds, or what business losses were created. The analysis may include reconstruction of the books and records, as well as identification of questionable income and expense items.
  • Money Laundering – Sequence Inc. has extensive experience tracing money moved with high volumes of transactions and through multiple bank accounts. Following fine grain details with a high degree of accuracy is crucial in these investigations. We can manage cases with hundreds of bank accounts and hundreds of thousands of transactions, effectively tracking the flow of funds between people, organizations, and accounts.
  • Pyramid Schemes Multi-Level Marketing (MLM) Companies – Sequence Inc. has been engaged to examine the financial statements and supplementary information of multi-level marketing companies to determine whether any red flags of fraud are present. In addition, Sequence has examined the quality of financial statements and related filings to determine whether undisclosed issues related to income, expenses, and other financial matters may exist. Tracy has been researching pyramid schemes and multi-level marketing companies for more than twenty years, analyzing the recruiting techniques, compensation plans, sales techniques, and failure rates.
  • Tax Controversy and Tax Fraud (Civil or Criminal Defense) – We provide expert assistance in resolving both civil and criminal tax matters. Tax cases are very often based upon complex assumptions made by taxing authorities regarding a taxpayer’s income and expenses. Those assumptions are many times made without a full analysis of all available data, but the burden of proof rests with the taxpayer. The taxpayer is generally at a disadvantage in tax matters due to to the lack of expertise regarding financial documentation, estimation methods, and tax law. Sequence Inc. has the experience required to effectively challenge the taxing authorities on their calculations and proof of income and expenses, apply direct and indirect methods of calculating income, interpret and applying the tax code to specific income and expense items, and calculate the tax lost to assist in sentencing.
  • White Collar Criminal Defense – Sequence Inc. provides forensic accounting services to assist with criminal defense. Defendants are entitled to a competent defense, and that may often involve a detailed analysis of complex financial transactions. Our firm has the capability and experience to analyze the documentation and numbers with integrity and objectivity, in order to present the facts accurately to assist with the defense of the client.