We provide a broad array of investigative and analysis services ranging from risk assessment to asset recovery, fraudulent financial reporting, occupational embezzlement, and more. We have worked with CEO’s and CFO’s, Boards of Directors, law enforcement agencies, and regulators. We understand the laws surrounding fraud and we know how to dig out the facts without violating confidences and the routine of day to day business. Our experience runs the gamut of frauds including:

• Financial Reporting Fraud
• Occupational Embezzlement
• Theft of Trade Secrets
• Conflicts of Interest, Bribery and Corruption
• False Claims Against the Government
• Fraudulent Conveyance in Bankruptcy
• Money Laundering
• Ponzi Schemes
• Subprime Lending Fraud
• Complex Financial Instrument Valuation
• Securities and Credit Market Fraud
• Bailout Fraud
• Healthcare Fraud
• Insurance Fraud

Our experts, many of whom have advanced degrees and certifications, have extensive experience in conducting fraud investigations and performing forensic accounting examinations. Our state of the art information technology skills and experience in dealing with government agencies, regulators, and law enforcement agencies make us particularly well suited for high profile cases. Our services typically include the basics such as comprehensive background research, interviews of key parties, followed by the application of sophisticated intelligence gathering techniques such as digital forensics, electronic discovery, data and text mining, and statistical and economic analysis.

Fraud has many faces
Some frauds are very basic and others are complex and sophisticated. The common thread in virtually all such diversions is a breakdown of the checks and balances of the system of internal controls. Some of the more common types of frauds are:

• Occupational Embezzlement. Employee embezzlement of cash or other assets, can range from hundreds of dollars to many millions of dollars. We have designed investigative procedures to swiftly identify suspect transactions. Our interview and interrogation techniques, have assisted in identifying frauds that were otherwise hard to find.

• Theft of Trade Secrets. In a struggling economy, the incident of corporate espionage increases. We use data mining, computer forensics, and other sophisticated tools to assist in uncovering these kinds of thefts.

• Conflicts of Interest, Bribery and Corruption. We use vendor data mining and computer forensics procedures to identify conflicts of interest, including allegations of kickbacks, bribery, Foreign Corrupt Practices Act violations and other types of conflicts and corruption.

• False Claims Against the Government. False claims laws give the government significant investigative power against vendors that allegedly submit false bills to the government. We have helped companies, including healthcare entities and department of defense contractors, defend false claims violations. We have similarly assisted various government agencies in their prosecution of such claims. We have also designed and implemented corporate governance programs for companies involved in government contract work.

• Fraudulent Conveyance in Bankruptcy. Trustees in bankruptcy have an obligation to creditors to maximize the assets of the bankrupt estate. Often times assets are intentionally transferred to interested parties before the bankruptcy filing. We have assisted with both the identification of fraudulent conveyances on behalf of the bankrupt estate and with defense against allegations of fraudulent conveyance for debtors and recipients.

• Money Laundering. Our professionals have worked with businesses, law enforcement and financial institutions to identify international and domestic money laundering activities. We utilize data mining and computer forensic procedures, reviews of public records and bank documents, and analysis of corporate network structures to identify such schemes.

• Ponzi Schemes. The procedures required to unravel such frauds typically involve the analysis of complex transactions involving many parties – investors, feeder funds, law enforcement, trustees and others. We have reconstructed the activities of such entities including their capital raising, asset purchase and investment transactions, identified available assets and helped maximize recoveries by victims.

• Complex Financial Instruments. The value and validity of collateral underlying many mortgage backed securities, special investment vehicles, credit default swaps, and other similar instruments is often questionable. We have solid experience in this complex arena and its ever-changing landscape of valuation, financial reporting rules, and transferability.

• Securities and Credit Fraud. We have worked on behalf of investors, companies, financial institutions and law enforcement agencies in the investigation of matters such as insider trading, predatory lending practices, fraudulent financial reporting, and more.

• Healthcare Fraud. There are numerous examples of healthcare fraud aggregating hundreds of billions of dollars. Healthcare fraud victimizes governments, care providers, as well as private payors. We have broad experience in uncovering such frauds and winning recovery awards for damaged parties.

Do these cases look familiar?

• A $35 million embezzlement perpetrated by a group of accounting department employees of a private construction contractor. The fraud involved setting up phony bank accounts controlled by the employees in the company’s name, transferring funds from the real company bank accounts into the illegal accounts, and using those funds to pay for their lavish lifestyle.
We designed a powerful database program and customized queries to identify the fraudulent transactions over a 12 year period. We also used computer forensic and other techniques to identify the assets owned by the perpetrators and helped maximize the recovery for the victims.
Stronger internal controls including better segregation of duties would have likely prevented this fraud.

• The compliance officer of a Fortune 100 healthcare equipment manufacturer received a whistleblower complaint that members of the sales department were overstating reported sales. We created an information database from the company’s accounting systems, and designed programs and queries that analyzed the data for inconsistencies and compliance with relevant revenue recognition accounting principles. The company was able to identify the nature and extent of the inappropriate financial reporting and take appropriate remedial action thus avoiding a much more damaging outcome.

• The CEO of an accounts receivables factoring firm hired us to investigate the misappropriation of a $25 million investor capital funding. We traced investor funds, analyzed disbursements, and performed a variety of transaction testing procedures. We determined that a majority of investor funds had been paid to customers, some of whom were participants in a “friends and buddies” Ponzi scheme.
Procedures for verifying and accepting new customers would have likely prevented this fraud.

• Local management of a waste recycling facility were hiring and paying suppliers, vendors and subcontractors in which they allegedly had a financial interest. We performed background investigations, created a transaction database for analysis, identified questionable payments and transactions, and assessed the extent of loss.
Rigorous controls over purchasing and a protocol for identifying related party transactions could have averted this fraud.

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