Selecting an Expert Witness

In commercial litigation, many cases require some kind of expert. Whether it is a financial expert, an engineering expert, a fraud expert, a valuation expert, or some other type of expert witness, the process of selecting one cannot be taking lightly. The effectiveness of your expert witness could win or lose a case for you, so it is important to carefully consider what makes a good expert witness.

Qualifications and Credentials
One of the first steps in evaluating an expert is looking at the education and credentials. The potential expert needs substance in this area to have a reasonable chance of standing up to any challenges by opposing counsel.

In addition to college degrees, you should look at the licenses and professional certificates held by the expert witness. What are the most important certificates in this person’s field? Does this person have them? Are the certificates held by the expert actually worthwhile?

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Using Expenditures to Calculate Income in Divorce

It is sometimes difficult to determine the income of individuals who will be paying child support or spousal support. This can often be the case when dealing with self-employed individuals.

If the reports of income made by the spouse or parent don’t seem to make sense, it may be necessary to look at his or her lifestyle to determine income. In this situation, we look at the expenditures made by the person and calculate the level of income necessary to fund those expenditures.

Tracy Coenen explains the process in this video.

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Updates to MLM Income Disclosure Statements

For years I’ve been collecting income disclosure statements issued by multi-level marketing (MLM) companies. These are the proof that you have almost no chance of making money in MLM, no matter what the company or product. Across the board, you see that the vast majority of the distributors make almost nothing in commissions. The “average … Read more Updates to MLM Income Disclosure Statements

Forensic Accounting Software

The financial part of a complex case can become overwhelming quickly. Particularly in cases involving white collar crime, securities fraud, Ponzi schemes, or other fraud recoveries, the trail of financial documentation is often very long. A forensic accountant needs to examine tens of thousands of transactions and piece together the evidence in a way that attorneys, judges, and juries can understand.

When there are mountains of data, the investigator needs a way to quickly examine the data, assemble it in a format that is usable, find connections between transactions, and quantify results. Traditional forensic accounting techniques are no longer effective in these types of investigations. The volume of data can quickly overwhelm the investigator, and this affects the quality of the results.

Size Matters
Previously, the forensic accountant would use a technique called “scoping” or “sampling” when  the volume of financial documentation exceeded the bandwidth of the staff. For example, he might decide that all transactions under $1,000 are too small and insignificant to the investigation, and will only examine transactions larger than this threshold. Alternatively, the investigator might examine only transactions of a certain type or involving certain parties.

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Staying Independent in Fraud Investigations

I would like to think that most companies are committed to doing business honestly. They try to do the right thing, and when a problem is found, they try to correct it quickly.

Even when a scandal is looming, I hope most companies would want to find the truth as fast as possible and take appropriate action.

Even when a company is committed to fixing problems, however, management does not always do it the right way. This is particularly true when it comes to investigating suspicions of wrongdoing. There are many times when such an investigation must be done by an independent party in order for the company to be in the best possible position following the conclusion of the investigation.

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Protecting Expert Witness Work Product

One often overlooked key to successfully working with an expert witness is the protection of privilege and work product. Until the expert is actually disclosed to the other side, it’s in the best interest of the client to make sure that the expert’s work is protected.

While no airtight accountant-client privilege exists, it is still possible to protect communications when an accountant (or other expert) is working with an attorney on a litigation matter.

Protecting the work product can provide a huge advantage in the early stages of litigation. It allows the attorney to explore possible assertions and defenses in the case with the help of an expert, yet it doesn’t expose the expert’s opinions and input to scrutiny from opposing counsel.

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Searching for Hidden Income

The million dollar question in many litigation disputes, be it family law, a shareholder divorce, or other corporate wrangling, often centers around unreported income. Are there sales that aren’t being recorded on the books? Is the individual receiving cash for work done? Is revenue hidden to shield it from being considered by the court?

It would be lovely to be able to wave a magic wand and have all the “hidden” income magically appear. Unfortunately, that’s just not going to happen in this lifetime. The search for unreported revenue and earnings is a difficult one.

It’s one thing to examine transactions that have been recorded on the books and dig into the details of those transactions. It’s another thing altogether to try to find something that isn’t even recorded on the books. Where does a fraud investigator begin?

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Wisconsin Election Conspiracy in Milwaukee

Set aside for a moment your opinion about whether or not the Wisconsin April 7 election should have gone forward in light of the COVID-19 pandemic and the statewide “safer at home” order.  Let’s talk about what happened in Milwaukee on election day. Milwaukee is a city of approximately 600,000 people. Normally, there are 180 … Read more Wisconsin Election Conspiracy in Milwaukee

Paycheck Protection Program (PPP) Loans and Child Support (COVID-19)

A family lawyer asked if a loan received under the Paycheck Protection Program (PPP) will be considered income for purposes of the child support obligations of the business owner.

The simple answer:

Loans are not income. The business is not receiving money as a result of selling any products or services. It’s simply a pile of cash from which the business can operate, and under normal circumstances, the business has to pay back the money.

The complicated answer:

A business owner often has two sources of income that are factored into child support calculations: a paycheck and the net profits of the business. Let’s start with the paycheck. The purpose of the PPP money is to continue paying employees. That includes the business owner. For many business owners, there will likely be no change here. He or she got a paycheck before, took out the loan, and continues to get the same paycheck.

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