Sage Investigations; Critical, inside information to help you prevail when dealing with the IRS

SEPTEMBER 2014

In This Issue

IRS Releases Scam Phone Call Alert

Collusion Between Controller and IT Staff Results in Embezzlement

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"Whoever is detected in a shameful fraud is ever after not believed even if they speak the truth."

~ Phaedrus

The goal of this e-newsletter is to provide you critical, inside information that will help you prevail when defending an IRS criminal case. We will do this by sharing the knowledge we have from our 25+ years of experience as an IRS Special Agent.

We are grateful to have the opportunity to provide you this valuable information via our monthly e-newsletter and our unparalleled forensic accounting and investigative services.

We take special care to ensure the information we provide you in "The Beacon" is the latest and most current information available. In this edition, we have addressed IRS Releases Scam Phone Call Alert and a Case Study about Collusion Between Controller and IT Staff that Results in Embezzlement.

We want to write about topics that will assist you in prevailing with criminal IRS cases. Please e-mail us your topics of interest to Thebeacon@sageinvestigations.com.

We encourage you to share our e-newsletter with others in your sphere of influence.

Sincerely,

Edmond J. Martin

Principal, Chief Investigator
Certified Fraud Examiner (CFE)

Texas Certified Investigator (TCI)

IRS Releases Scam Phone Call Alert

I was recently contacted via telephone by a man with a Middle Eastern accent who told me he was with the IRS. He claimed I owed income taxes and stated that if I did not send him money he would send IRS Agents to have me arrested. When I asked how much I owed he said, "$3,500 and I need a payment immediately." I told him I did not owe any money to the government and informed him that I am a retired IRS Special Agent. He continued to say that if I did not send him money he would have me arrested. I told him, "Send the agents to my home and we will talk." He asked for my residence address, and I replied that if he is with the IRS he has my address in his records. He hung up on me. I called him back and a different person answered. He asked my name and hung up immediately after I told him. I know from experience that these people are organized with a Customer Relational Management (CRM) system and now that they have my name and phone number in their database they will not accept any more calls from me.

Why did they call on my business phone and how did they know my name? I cannot explain that, but they did not know my address or that my former employer was IRS Criminal Investigation.

On August 28, 2014, the Internal Revenue Service issued a consumer alert providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS. The alert follows: These imposters call and... Read More

Collusion Between Controller and IT Staff Results in Embezzlement

The Association of Certified Fraud Examiners "Report to the Nations - 2014 Global Fraud Study" reveals that there are "Red Flags" to be considered when a business is experiencing financial difficulties or things just don't feel right, including: the suspect was a white male, on the verge of retirement, has control issues and an unwillingness to share duties and he may feel threatened by a new more educated manager. Also thing to consider are small businesses have poor internal controls and lack an independent audit.

Case Study:

A family-owned small business was embezzled by a trusted long-term employee, a controller. He was very abrupt and intimidating with employees and management, and he controlled all the finances for the business. He set up a system wherein he paid vendors by check through Quicken, which is a single entry accounting system that is not designed for business. After cutting a check he destroyed the invoices that documented the transaction, claiming that was in accordance with IRS regulations. He used this same system to help himself and his co-conspirator to money belonging to the company. His scheme was to... Read More

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At Sage Investigations we are dedicated to serving our clients nationally, to help them navigate the difficulties of dealing with the IRS, and other complex (forensic) financial fraud investigations both civil and criminal. By narrowing our focus to our primary strength of following the money, we steer our knowledge, efforts, and experience to financial issues. We help our clients propel their cases forward by assisting in the review, acquisition, and organization of financial records, evaluating the elements of their cases, and helping create winning strategies. Through the use of our proprietary advanced financial investigative technology we analyze complex financial data quickly, easily and efficiently, saving our client's time and money.

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