Forensic Team Compiles Compelling Criminal Case

Challenge

Skoda Minotti was contacted by a national law firm regarding a high profile client of theirs that, by sheer luck, learned that their trusted controller had been embezzling from an affiliated entity. While they were aware that he had misappropriated some funds, and that he had altered the actual names of a “few” payees in the accounting software (in order to conceal the crime), they were not aware of the magnitude of the embezzlement.

Solution

We met with the Company’s CFO, determined the scope of the engagement, secured numerous boxes of records and a backup copy of the accounting software. We began by examining thousands of disbursement source documents. We performed various sorts of the data first by check number, then by payee, and finally by amount. To further reconstruct the fraud, we compared the payees entered into the accounting software to the actual payees reflected on the thousands of cancelled checks.

Results

In comparing the actual payees to those entered into the accounting software, we identified approximately 1,000 altered entries over the seven-year period. It became clear that the controller was using frequently used, and commonly known payees, in order to conceal many of the fraudulent payments to himself and for his personal benefit. These payments were later traced to the controller, his personal credit cards, and for expenditures shipped to his residence. 

We identified hundreds of disbursements entered as “cash” and made payable directly to the controller. In addition, we were able to identify thousands of dollars of personal charges made by the controller directly on the CEO’s charge card (that he was entrusted with paying) that the CEO wasn’t even aware.

In summary, we identified approximately $2 million of misappropriated funds. Anticipating that the case would be criminally prosecuted, we compiled eight detailed and organized binders that identified and documented every unauthorized transaction. The individual was arrested and charged with theft.

Detailed Work Product Leads to Criminal Conviction

The investigating detective commented that he had never seen such a thorough forensic investigation, expert report, and logical and organized presentation associated with a multi-million dollar financial crime. Due to the overwhelming evidence and Skoda Minotti work product, the controller pled guilty.

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