A forensic accountant may be needed in a case alleging securities fraud. In the video below, Tracy discusses some of the particular issues that the accountant may evaluate and how to find the right expert for your case.
Child support, spousal support, and property division are often evaluated in light of the income of the each of the parties to a divorce.The parties fill out financial disclosure forms and purport to tell the court and the spouse the truth about their income. If one spouse is not truthful about his or her income, this can provide a great opportunity for the other side.
The spouse immediately appears to not be credible, and this can affect the entire case. If he or she is lying about income, he or she may be lying about other important things in the divorce.
The first step in evaluating claimed income is comparing it to documents that can confirm or refute the claims. This may include: Read More
Forensic accounting existed quietly for a long time before the general public started to become aware of it. Twenty years ago when the frauds of Enron, WorldCom, and Tyco became big news, the work of forensic accountants was finally given the spotlight. It has been a slow evolution, but the general public is becoming more and more informed about what we do.
Would it surprise you to know that many of the techniques used by forensic accountants to investigate fraud and analyze the numbers are the same today as they were decades ago?
Computers have made things easier, as we can track, sort, and manipulate data faster. While software solutions for analyzing data, managing documents, and following the money are being used in investigations, they’re not being used to their full potential. This is obviously a missed opportunity for clients. Read More
When the Internal Revenue Services suspects that a taxpayer has unreported income, the agents can use one of several methods to uncover that income. These methods can also be used to help calculate hidden income in a divorce or child support case. One such method used to determine unreported income is the bank deposits method, in which the forensic accountant analyzes bank deposits. In the video below, Tracy explains how this is done.
Expert witnesses are required to use reliable principles and methods in forming their expert opinions per the Federal Rules of Evidence. In this video, Tracy Coenen talks about Rule 702 how it applies to damage calculations done by expert witnesses.
The financial portion of a lawsuit is often high-stakes. This is especially true in cases of divorce, breach of contract, securities fraud, tax fraud, money laundering, and white collar criminal defense. Whether the other side is an individual, a company, or the government, you need an accurate analysis of the numbers for the benefit of your client.
There is almost always a story behind the numbers. Things are not always as they appear, and it is unwise to take the financial story at face value. A case can be won or lost based on your ability to find out the hidden truth about the numbers.
Finding the Data
Getting your hands on the right financial data depends on knowing what to ask for. The financial statements and tax returns are the obvious places to start. While they may not always be truthful, they still hold many clues to the financial story. Read More
When a party to a divorce or child support case is believed to be hiding income or assets, one way uncover proof of it is through a lifestyle analysis. Such an analysis is not only helpful in establishing the true income of the subject, it can also uncover inconsistencies which reflect negatively on the subject’s credibility.
One key piece of documentation that can help your case against someone who is concealing income or assets is a loan application. When borrowing funds for homes, cars, boats, or business investments, people are often required to disclose details of their personal finances. This usually includes disclosing monthly or yearly income, as well as the value of assets such as homes, vehicles, real estate, and business interests. Read More
The calculation of damages necessarily requires estimates and assumptions. Something has happened, and a company or individual is claiming that there are lost profits because of it. We can never know with complete certainty what revenue or profits would have been if that incident or action had not taken place. Mathematical precision is not possible. Thus, the expert must make certain estimates in order to calculate damages. Read More
When a divorce or a child support issue is looming, it’s amazing how a quickly a closely held business starts “losing money.” I use quotes because such a situation is so predictable. One party wants to protect her or his assets, and when there is a business involved, the motivation to hide money can be stronger than usual.
The types of businesses that can be prone to manipulation of the books include restaurants, retail stores, doctor or dentist offices, construction companies, auto dealerships, and law practices. This list isn’t exhaustive by any means, but it provides good examples of businesses at risk of financial maneuvering.
Any business that is closely held and has finances that are easily manipulated by the owner is at risk. A lawyer filing for divorce from his wife may suddenly stop taking a paycheck and then claim he has no earnings from the practice. A restaurant owner could stop reporting cash receipts from customers, thereby claiming much lower revenue for the business while secretly pocketing the cash. A carpenter may offer customers a discount if they pay with cash and don’t request a receipt, never reporting that money as income. Read More
For decades Milwaukee Public Schools has been failing to educate children, with some of the worst student performance in the country. And for decades, we have been told that money is the problem. MPS is a “poor” district. If only they had more money, the children would do better.
It’s always been a lie. All you have to do is look at how much MPS spends per student.
Typical spending in the U.S. is $12,000 per child per school year. (Most private schools spend much less and have much better outcomes.) Spending per pupil in fiscal 2017 (the school year that ended in 2018) was $12,201 nationally, and $11,968 in Wisconsin. Read More