Fraud Investigation Case Study

Challenge

A corporate officer at an area medical laboratory noticed an unusual and excessive payment to an unknown vendor. He engaged Skoda Minotti to examine several years of books and records to determine if fraud had taken place.

Solution

While the accused corporate officer was on vacation, a team of Skoda Minotti litigation support specialists and forensic examiners secured and removed all of the internal corporate records. They analyzed over 12,000 canceled checks and corresponding check stubs as well as seven years of bank statements, credit card transactions and payroll records.

It was readily apparent from the evidence secured that fraud had been occurring for several years.

Results

After examining all 12,000 cancelled checks and then comparing them to the internal accounting records secured, we were able to identify over $6.5 million dollars of corporate funds that were misappropriated. We were also able to identify that source documents were altered and miscoded to hide their true identity. We ultimately determined that hundreds of corporate checks were issued to pay for the lavish lifestyle of the company president.

As a result of the civil lawsuit that was filed, (and additional personal financial records that became available to our investigators) we were able to construct the complete audit trail of many of the misappropriated corporate assets directly to the thieving corporate officer’s personal bank and investment records.

We identified family members (not employed by the company) that were inappropriately included on the company’s payroll while at the same time having been provided with several corporate vehicles, corporate credit cards and cellular telephones.

Payroll padding schemes were identified, documented, and provided to legal counsel.

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