Our experts handle matters with the expertise of accountants and investigators while collaborating with counsel and other key stakeholders. We conduct thorough and efficient investigations of critical issues, communicate our status throughout the process, and provide meaningful findings and remedial suggestions to relevant parties.
Sports and Entertainment
Improper Revenue Recognition
At the request of its auditors, a multinational marketing and sports agency requested assistance in the review of accounting entries to determine their validity. Our team reviewed thousands of journal entries and accounting detail and interviewed several senior accounting professionals before determining that improper revenue recognition resulted in a material overstatement of income. The team also discovered that the CFO was siphoning funds through a fictitious vendor as well as using corporate credit cards to pay personal obligations. The CFO and the controller were terminated, and the company’s internal controls and compliance procedures were rebuilt.
Risk Ranking of Officials
We developed a ranking system for a major sports league to establish an unbiased risk level for each of its officials. Using an extensive questionnaire combined with information gathered through background checks we built a model which generated a ranking of individuals. The results were reported and discussed with league senior management to determine if and when additional steps were necessary.
Retained as an expert witness by counsel and the investment group of a large real estate development project. After conducting a thorough analysis of the accounting records, we provided our expert opinion on the state of the records and identified significant accounting and internal control deficiencies along with potentially questionable transactions. Our forensic accounting expertise allowed us to provide a clear understanding of the current state of the project helping the investment group make informed decisions moving forward.
Fund Tracing Investigation
Engaged by a real estate association to conduct a funds tracing investigation in response to allegations of fraud, theft, and other misappropriation of funds by the association's developer. We analyzed the flow of funds across the developer's various trust accounts allowing us to provide a clear and concise picture of the flow of funds across the developer's accounts, and we were able to identify specific instances where funds intended for the upkeep and development of the property were misappropriated. We provided our findings and opinions to the real estate association and their legal counsel, and our analysis was used as evidence in a litigation against the developer.
CFO and Controller Terminated
Retained by a large healthcare facility that had questions about the activities of its former Director and several members of senior management. Understanding the potential litigation issues we recommended, interviewed, and aided in hiring attorneys to assist with the investigation. Our team performed extensive company interviews and analyzed bank and accounting records to establish the depth and breadth of the improprieties. We reported our findings to the Executive Director and the Board resulting in the termination of the CFO and Controller. We generated a proof of loss which was delivered to the insurance company and a detailed report for the US Attorney General’s office. We provided operational guidance to restructure the agency's accounting functions and built additional internal controls.
Improper Physician Practices
Engaged by outside counsel and the board to perform an investigation into allegations of accounting and reporting irregularities by members of management of a large physicians group. Our team investigated a wide range of issues, reviewed and analyzed documents and conducted interviews. Our findings included examples of upcoding, unbundling, and performing unnecessary services. We reported our findings to the board of directors and regulators.
OFAC Sanctions Investigation
Managed an internal forensic accounting investigation on behalf of a global manufacturer of carbon fiber into certain purchases of raw materials from OFAC-sanctioned entities that may have violated U.S. law. The team interviewed finance and procurement personnel, quantified the amount and value of product purchased from sanctioned entities, and performed transaction testing of the company’s supporting records for the related purchases. The results of the team’s analysis included a detailed report which was were provided to OFAC as part of our client’s disclosure report.
A multibillion-dollar manufacturing company’s Chinese acquisition showed indicators of potential violations of the Foreign Corrupt Practices Act (FCPA). We were asked by outside counsel to assemble and manage a team of e-discovery and forensic accounting professionals to help determine the company’s FCPA exposure, identify who was involved, and quantify the dollar exposure. We provided a report and presented our findings to counsel and the company’s board. We then designed and assisted in implementing compliance procedures and training delivered to all employees and outside vendors.
University President's Departure
Engaged by the University board and outside counsel after whistleblower allegations were received by the Board of Directors regarding inappropriate spending by the president. We discreetly collected all available documentation of expenses incurred by the president, his wife, and his staff to determine if they were incurred in accordance with the University guidelines.
In total $580,000.00 in expenses charged to the University were identified as lacking a University-related purpose including sojourns taken by the President and his wife, purchases of a personal nature, personal celebrations held at and paid for by the University, and staff performing services exclusively for the personal benefit of the President and his wife. As a result of our findings the Board of Directors sought and obtained the resignation of the University president. We identified gaps in University policy and procedures and recommended corrective actions.
Saved a One Hundred Year Old Organization
The U.S. Department of Justice Office of the Inspector General ("OIG") issued an audit report that questioned federal grant funds a national not-for-profit received. The OIG alleged that the nonprofit commingled the funds received and could not provide adequate support for how funds were used. They threatened to close down the organization after more than one hundred years in existence if the organization could not establish the validity of their use of the funds. Outside counsel engaged us to perform forensic accounting and investigative services. The organization had weak accounting procedures which required the team to recreate the flow of funds at the national level therefore providing support for the source and use of grant funds. The team worked with subrecipient agencies throughout the United States to rebuild their records, establishing that the funds received were used for the intended purposes. The team’s work identified and quantified the amount of grant-eligible and allowable expenditures that the National Office and the sub-recipients incurred to the satisfaction of the OIG. The team had numerous meetings with government agencies and communicated with the not-for-profit's board on a regular basis.
Money Laundering and Layering of Transactions
Retained as an expert witness by a law firm to perform forensic accounting services for plaintiff, a large pharmaceutical company, to establish the operational structure of the defendant, a purchaser of their product allegedly also selling counterfeit goods, and the rationale or lack thereof behind the flow of funds. We created an extensive database of banking records to determine the magnitude, the transactional flow, and the location of funds currently available. In analyzing the data we were able to establish the layering of transactions which showed illicit intent. Our courtroom testimony demonstrated the possibility of immediate and irreparable injury to the plaintiff and resulted in the request for an injunction being granted.
Restatement of the Financials
Engaged by outside counsel to the oversight committee of a public company in the biopharmaceutical industry in order to ascertain whether or not the company properly and adequately disclosed all related-party transactions and followed appropriate GAAP accounting principles with respect to contingencies, and compensation. The team reviewed and analyzed the books and records of the company, as well as communications between the former CEO and various insiders. The results led to restatements in two periods and the unearthing of questionable activities by senior management.
We were retained by the trustee to assist with an investigation of an investment firm that defrauded investors out of $380 million through a Ponzi scheme. The team’s forensic accounting work included rebuilding the company books and records and corresponding bank information to establish the timing of deposits, disbursements, and commingling of assets, as well as to uncover any suspicious, unusual, or unsupported entries and transactions. We testified in Bankruptcy Court approximately 35 times as a forensic accounting expert, providing claw-back calculations in determining the ultimate distribution of funds, and in support of the trustee’s motion to consolidate related entities into a bankruptcy proceeding.
Established Sham Mechanism
Retained as an expert witness by a law firm to perform forensic accounting procedures for a large Chinese conglomerate to analyze a series of profit distributions made by an entity engaged in the sale of commercial aircraft and aircraft parts. We analyzed lending agreements and profit-sharing “side-letter” agreements and traced transactions through the company’s general ledger transaction detail and bank statements. We identified and quantified total profits distributed to owners and company insiders prepared several expert reports on our findings, and provided expert witness testimony at trial. Our courtroom testimony established the defendant intentionally enriched insiders at the direct expense of the plaintiff and a judgment was entered in favor of the plaintiff on all counts. The court ruled that we demonstrated various transactions were a sham mechanism to insulate assets from the judgment by moving them to the defendants. The court further ruled the defendants colluded with each other and in doing so committed the tort of civil conspiracy.
Attorneys General of New York and 17 Other States
Defendant violated the FTC Act, the Truth in Lending Act, the Electronic Fund Transfer Act, the Military Lending Act, the Holder Rule; and state laws in connection with jewelry sales and financing to members of the military. The Federal Trade Commission and a group of 18 states sued the national jewelry retailer to stop the company from cheating military families with illegal financing and sales practices. According to the complaint, the jewelry company deceptively claimed that financing jewelry purchases through their company would raise service members’ credit scores, misrepresented that its protection plans were not optional or were required, and added the plans to purchases without consumers’ consent.
Under an order with the FTC and multi-state group, the company was instructed to stop the collection of millions of dollars in debt, provide approximately $10.9 million in refunds for purchased protection plans, provide refunds for overpayments, and assist with the deletion of any negative credit entries pertaining to debt in consumers’ credit reporting file.
As required by the consent order we were hired by the defendant and approved by the Attorneys General of New York and 17 other states to monitor the distribution of funds to the more than 46,000 members of the military.
State of Tennessee Monitorship of Restitution Program
Defendant was found to have violated the Credit Services Business Act of Tennessee and The Tennessee Consumer Protection Act by operating an unlawful credit services business, making untrue, misleading, or deceptive representations related to credit services; failing to register a statutorily mandated bond; failing to provide proper disclosures and information statements to consumers; and engaging in the commission of deceptive, unfair, and illegal acts and practices in Tennessee.
Defendants were required to pay restitution to all consumers who had purchased any goods from their retail location in Clarksville, Tennessee between January I, 2016, and March 1, 2019. The Defendants were responsible for administering the required restitution program. To ensure compliance with the Judgment, Defendants, in consultation with the State's counsel, we were selected as independent monitor to audit this restitution program.
Of Special Interest
We strategized and served as an independent, objective investigator for the purpose of determining the facts concerning customer accounts maintained by the agency of a Swiss bank during the W.W. II era. We had a dual responsibility to both our banking client and to the New York State Banking Department (“the NY Banking Department”). We needed to maintain a balance between the needs of each of the clients and the necessity to remain objective and independent in this matter.
The primary objective was to conduct a detailed analysis of the complete document archives of the client bank. It was thought that all records had been destroyed but we miraculously located records dating back to the 1930s in the depths of a mine which had been converted into a storage facility. Using hundreds of staff members we reviewed millions of sensitive documents dating back to the 1930s. Our investigation included the examination of documents at the Holocaust Museum in Washington D.C ., Israel's Yad Vashem and the Swiss Archives in Basel Switzerland. From our analysis, we constructed a database profiling the bank’s W.W. II customers’ accounts from the date the account was opened in the US to date, showing the history of each account, such as dates of closure, termination, abandonment, escheatment or continuous operation.
We understood the concerns of the client financial institution and the NY Banking Department, as well as the interests of the potentially hundreds or thousands of account holders, their heirs and other potential beneficiaries. Accordingly, this engagement was conducted with the utmost care and confidentiality.
We uncovered over one thousand accounts from documents thought to have been destroyed years earlier. This information was delivered to the public through websites and other methods allowing family members to make claims for reimbursement. Our client and our firm were commended by the NY Banking Department for its level of thoroughness and cooperation.