Greetings!
We are grateful to have the opportunity to provide you this valuable information via our monthly e-newsletter and our unparalleled forensic accounting, expert witness, and fraud investigative services.
The goal of this e-newsletter is to provide you critical, inside information that will help you "follow the money" in business disputes, divorce cases, fraud cases, estate matters, corporate embezzlement, and to prevail when defending an IRS criminal case. We do this by sharing the knowledge we have from our 25+ years of experience as an IRS Special Agent and 16 years as a private investigator / forensic accountant.
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 explain fraud investigations using the audit report.
We want to write about topics that will assist you in prevailing with fraud, divorce, estate and probate, and IRS criminal 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 Board Certified Investigator (TBCI)
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Fraud Investigation Using the Audit Report
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In civil cases involving partnership agreements that are not fulfilled and money is not equitably divided per their agreement, legal actions generally ensue. Attorneys often require the assistance of a forensic accountant and someone experienced in developing the fraudulent aspects of a financial investigation.
As attorney’s battle over disclosures under discovery, the defense will resist giving up information that may be detrimental to their client. They will resist giving up tax returns, bank statements, cancelled checks, accounting system records, and any other documents that could potentially have a negative impact on their client.
If the defendant provides only inadequate financial reports that are not the customary Balance Sheet, Income Statements, and general ledger, then consider requesting the Audit Report for the accounting system in an Excel format for the period in question. From that report, the fraud investigator will be able to reconstruct the receipts and disbursements for the company. The investigator will also gain knowledge of the categorization of transactions and identify deleted revenue and expenditure transactions.
If discovery is finally delivered in the form of third-party released bank statements for the period in question, but the cancelled checks are not provided, the investigator is not left totally in the dark. Convert the bank statements using the Sage DIO proprietary software and generate a Bank Account Report. Take the information from the Audit Report and
enter the payees for the checks that are missing payees. You will then have a complete Bank Account Analysis with deposits and disbursements described from the Audit Report, and you will have the classification. This analysis can be reconciled to the bank statements and the Audit Report will allow the fraud investigator to locate outstanding checks and deposits to properly determine the Income and Expenditures for the period. This will also allow the determination of assets purchased, transfers between accounts, capital contributions, partner loans, and possibly uncover personal expenditures buried in the company’s records.
This Bank Account Analysis isolates the revenue deposited to the bank account and any revenue diverted from the account and converted to personal use helps prove the fraudulent intent of the operating partner. It also raises the question of whether or not all of the corporate income was properly reported to the Internal Revenue Service.
Sage
DIO software
is very beneficial in partnership disputes, income tax, embezzlement, and divorce tracing cases. If you are faced with a complex financial investigation or a case needing extra effort contact Sage Investigation, LLC. DIO is waiting to help plaintiff clients process the case data and help to follow the money and advance the development of your case. DIO can also assist in defense matters by helping develop information that will advance your defense case.
To learn more about helping your client, contact retired IRS Special Agent Edmond J. Martin, Chief Investigator at Sage Investigations, LLC, e-mail
edmartin@sageinvestigations.com
or call 512-659-3179
for a free 20-minute consult, and visit our website at
www.Sageinvestigations.com
and review our team and their
CV’s.
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Forget what they told you.
You want the truth,
follow the money.
— Roxanne Bland
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Contact Us
P.O. Box 160161
Austin, TX 78716
Phone: 512-659-3179
Fax: 512-328-6878
Texas License #A10803
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Serving your needs is our priority.
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At Sage Investigations, we are dedicated to serving our clients nationally, to help them navigate the difficulties of dealing with fraud, divorce, estate and probate, the IRS Criminal Investigation, and other complex (forensic) financial fraud investigations. 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 trace and analyze complex financial data quickly, easily, and efficiently, saving our client's time and money.
Sage handles all cases with altruism, professionalism, honesty, integrity, passion, and respect. When you hire Sage, you hire a team of professionals with skill and knowledge that helps you have more effective solutions. We are innovative with our DIO cutting edge technology, and perform every investigation in an orderly and organized manner to develop a clear investigative roadmap and deliver a quality work product. The compass that guides us is strong leadership and accountability.
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