Forensic Account Activities | RUSHMORE FORENSIC

Cost of a Divorce

13 March 2011 By Rushmore Forensic

When you are factoring in the cost of a divorce, it’s advisable to consider whether it’s in your interests to obtain a forensic accountant and/or business valuation expert to assist you and your legal counsel.

How can a forensic accountant help you?

Forensic accountants are experts at analysing complex financial information and presenting relevant information in a concise and helpful manner to the Court. In many cases, forensic accountants will analyse large quantities of documents (either hard copy or electronic) and either quantify a loss or in the case of a divorce matter, they can reconstruct financial records and provide a valuation for a business.

Business valuations can be an extremely important part of a property settlement and a separate article exploring this in further detail can be found here.

The cost of a forensic accountant can range from a few thousand dollars to over $20,000. It depends on the type of business being analysed or valued, the number of documents, the degree to which the documents are in an electronic form and many other factors.

While it’s useful to consider a forensic accountant in the cost of a divorce, it’s our experience that a good forensic accountant can save you much more than the cost of their services. Unravelling complex commercial structures can often have large tax consequences and expert advice in these types of matters will be in your best interests.

If you would like an obligation free quote to obtain the services of a Forensic Accountant then please don’t hesitate to contact us.

About the Author

Andrew Firth is a Forensic Accountant and expert valuation professional. He provides expert accounting reports for family law (divorce) and commercial disputes. Andrew is a former investigator with the Serious Fraud Office in the UK. He has also worked for KPMG and Deloitte during his career. Andrew is based in Sydney and provides forensic accounting services throughout Australia and overseas.

Filed Under: Family law, Forensic Account Activities Tagged With: assets in divorce, cost of divorce, Family law

New fraud prevention routine to detect false suppliers

13 December 2010 By Rushmore Forensic

Using data mining routines to detect fraud in corporate accounts payable data is a great way for organisations to protect themselves against fraud.

At Rushmore Forensic we have hundreds of data mining routines that can be implemented and we commonly run around 20 to 25 routines for each client.

Recently we added a new routine, which identifies all vendors that have been incorporated by ASIC for less than 2 years. Yes it’s that simple. The idea being that most companies our clients trade with would have been in existence for many years even if they had not been trading with our client directly.

A company that has only been recently created presents a much higher risk profile that the vendor is false. The forensic data mining routine uses the vendors name and ABN number from the Vendor Master File and compares this with the incorporation date from the ASIC website. Whilst this data mining routine hasn’t detected a clear cut case of fraud to date it has raised some potential conflict of interest and process issues.

Most of Rushmore Forensic’s engagements use custom developed databases, programming and other techniques to analyse corporate data. We have a suite of over 200 data mining and analysis routines. These routines can scan 100% of accounts payable, payroll, exployee expense reimbursement and other applicable data sources. This type of analysis commonly detects fraud, breaches of company policy and other anomalies. The reviews are regularly conducted for some of Australia’s largest companies.

About Rushmore Forensic

Andrew Firth is a Director of Rushmore Forensic. Andrew Firth specialises at using advanced data mining to detect fraudulent transactions and other improvements in an organisations processes. He is a forensic accountant based in Sydney.

Filed Under: Forensic Account Activities, Fraud Analytics, Investigation, Payroll Fraud, Preventing Fraud Tagged With: data mining, False Suppliers

Employee steals $1.5m to fund betting addiction

13 December 2010 By Rushmore Forensic

A lonely finance employee misappropriated $1.5 million from his employers, a major Australian charity organisation, to fund his pathological addiction to sports betting, a court heard.

The District Court in Brisbane was told while Dinesh Enoka Abeysuriya stole $1.5 million from the Uniting Church’s Blue Care organisation, the value of shortfall was about $900,000.

Blue Care is one of Australia’s largest non-profit organisations for health and care for the elderly.

A second charge arose because Abeysuriya would regularly use his on line account with sports betting organisation Centrebet where $1.88 million in bets was shown on his Commonwealth Bank credit card.

When Abeysuriya finally stopped gambling his credit card was overdrawn a further $223,409, the court heard,.

Abeysuriya, 29, pleaded guilty to aggravated fraud as an employee with a financial advantage of $1,534,967 between March 25, 2009, and April 9 this year.

He further pleaded guilty to fraudulently obtaining $223,404 from the Commonwealth Bank between March 5 and April 9 this year.

Prosecutor Jacob Robson told the court Sri Lankan-born Abeysuriya came to Australia from New Zealand in 2008 to work at Blue Care, where he was responsible for credit payments.

He said in virtually a 12-month period Abeysuriya misappropriated the money which he used to gamble online.

Mr Robson said Abeysuriya used three methods to misappropriate the money – inflating invoices and paying the extra to himself, paying invoices twice to legitimate creditors and himself, paying invoices to himself.

He said the frauds were uncovered when a Commonwealth Bank employee became suspicious of large amounts of money going through Abeysuriya’s account.

Eventually Blue Care called in auditors who uncovered the frauds, and after being confronted Abeysuriya fled to Sri Lanka.

Mr Robson said Abeysuriya returned to Australia and was remanded in custody in July.

He said Blue Care expected the outstanding money would be covered by insurance.

Barrister Steve Zillman, for Abeysuriya, said his client had been lonely when he came to Australia to work and took up gambling.

“He was young and lonely. He felt isolated and suffered from anxiety and depression” Mr Zillman said.

He said a psychiatrist’s report showed Abeysuriya had a pathological addiction to sports betting.

It was backed up by statements from his Blue Care workmates who often saw Abeysuriya’s computer open at sports betting sites.

Mr Zillman said Abeysuriya, who had returned to Brisbane of his own free will, was keen to be deported back to Sri Lanka once he had served his sentence.

(Source: Mark Oberhardt, The Courier-Mail, November 24, 2010)

About Rushmore Forensic

Andrew Firth is a Director of Rushmore Forensic. He has worked on a number of investigations relating to employee fraud. He has also given evidence in civil actions relating to employee misappropriation and money tracing.

He is a forensic accountant based in Sydney. Andrew can be contacted directly for a confidential and complimentary discussion.

Read more about how employee fraud can be detected.

Filed Under: Discovering a Fraud, Forensic Account Activities, Investigation, Payroll Fraud, Warning Signs Tagged With: Employee fraud, forensic accounting, Fraud Detection, Gambling addiction

Forensic Accountants? – The Who, What, Why and How

13 December 2010 By Rushmore Forensic

When I’m introduced to someone and they ask what I do, the most common response is “Wow, that must be really exciting!”. This is quickly followed by the question, “Well what exactly does a forensic accountant do?”

The actual job of a forensic accountant has always been in existence, but only in the last 15 to 20 years has the term “Forensic Accountant” become common.

Forensic accountants are experienced auditors, accountants, and investigators of legal and financial documents that are hired to look into possible suspicions of fraudulent activity within a company; or are hired by a company who may just want to prevent fraudulent activities from occurring. They also provide services in areas such as accounting, competition, damages, analysis, valuation, and general consulting. Forensic accountants have also been used in divorces, bankruptcy, insurance claims, personal injury claims, fraudulent claims, construction, royalty audits, and tracking terrorism by investigating financial records. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials (Source: Wikipedia).

As you can see, forensic accounting is a broad area with many different specialties. Forensic accounting can be broadly split between corporate investigations and expert witness work (such as divorce), but as you can see there are also many other tasks that don’t fit this neat distinction.

Most forensic accounting assignments are complex matters. The complexity can arise from:

the number of documents (often in the thousands or even millions of documents or computer records)
the type of documents (these can be faded, handwritten or lengthy legal agreements). Alternatively they can be snippets of information from say a call centre database.
the unstructured nature of information. It’s common for a forensic accountant to extract key pieces of information from emails, letters, and other correspondence. This information can then be cross matched to other records. These records may be financial records, phone records or internet activity.
The number of issues. When a forensic accountant is brought into a matter, often the client has up to 20 different issues or allegations. The Forensic Accountant will review the allegations and the potential evidence which supports each allegation. If the allegation can’t be supported, the forensic accountant will often cull the number of allegations into something that can be evidenced and has a reasonable chance of success when legal action is initiated. Most forensic accountants also find that many of the allegations are based on emotion, hearsay or are breaches in the organisations policies but are not fraudulent in themselves.

Most Forensic Accountants are trained as CPA’s or Chartered Accountants. There is no legal restriction on a person calling themselves a “Forensic Accountant” unlike other professional designations.

As corporate data is increasingly held in electronic forms, forensic accountants need to be capable of working with a wide variety of computer systems and be able to analyse large volumes of information. If you have a matter that involves a large amount of information, it is beneficial that you engage a forensic accountant who has these skills.

Another important factor when you consider engaging a forensic accountant is whether they have criminal investigation and or expert witness experience. There are many Forensic Accountants who have moved into the industry from auditing and other general accounting disciplines. There is a danger that these individuals can compromise an investigation through their handling of the evidence or other oversight.

About the Author

Andrew Firth is a Forensic Accountant in Sydney and Director of Rushmore Forensic. He has over 12 years experience in financial investigations, commercial disputes and other aspects of forensic accounting. Andrew is a former investigator with the Serious Fraud Office, London. He has also worked for KPMG and Deloitte during his career.

Andrew is based in Sydney and provides forensic accounting services throughout Australia. If you have a matter which requires expert advice, please don’t hesitate to contact Andrew Firth for a complimentary and confidential discussion.

Filed Under: Expert witness, Forensic Account Activities, Investigation Tagged With: Expert witness, Forensic Accountants, Fraud

Key points to remember when dealing with people in business

19 June 2009 By Rushmore Forensic

Key points to keep in mind when dealing with people in business:

Be particularly careful if you are approached by someone, rather than you being recommended to the person by someone you trust.
Doing business in an overseas country makes you vulnerable to fraudsters and scammers.
If it sounds too good to be true it probably is!
Ask to be taken around the business, and meet the staff. Be on alert if you only ever deal with one person in “the company” - maybe that’s all there is!
Keep asking questions and checking the facts.
Something as simple as an email address that does not work could be a clue that you are dealing with a fraudster

Always seek the advice of an expert Forensic Accountant. An expert Forensic Accountant can help you assess the situation and even recover money that you have invested.

Filed Under: Dealing With People, Forensic Account Activities, Preventing Fraud, Warning Signs

Who is a typical fraudster?

17 June 2009 By Rushmore Forensic

So who is a typical fraudster?

Research indicates that the typical corporate fraudster is:

Male
Well liked and respected
Greedy
Has pressing financial need e.g. has a gambling or drug problem
University educated
Close relationship with suppliers; and
Hardworking.

But don’t be fooled by people who don’t fit this stereotype! Don’t trust a person just because they are older, are female, appear to be wealthy, are well dressed, operate from an exclusive address, or promise you something of value. Notably, people that commit fraud understand human emotions and how to manipulate them.

Filed Under: Discovering a Fraud, Forensic Account Activities, Preventing Fraud, Warning Signs

What are the common warning signs of fraudulent behaviour that a Forensic Accountant looks for? (Part 2)

15 June 2009 By Rushmore Forensic

Continuing on from part 1 of this topic, listed below are a number of factors that should be considered when assessing whether a business is legitimate or not. If a business fails any of the following tests then you are potentially dealing with a fraudulent company or person:

Review a sample of invoices that the company has issued. Are the invoices tax compliant? That is, do they have the organisation’s Australian Business Number on the invoice, and do the words “Tax Invoice” clearly appear on the invoice. Also check that the GST on the invoice is clearly shown on the invoice or words to the effect that GST has been included in the total value of the goods or services provided
Be particularly mindful, if there are large amounts of cash either entering, leaving or being held on the business (e.g. in the company’s safe). Is the business being used to launder illegitimate money or is the business being used to finance some other business?
If in doubt seek professional advice. Be particularly careful, if you are rushed into making a decision, or there is any resistance raised when you start to investigate a business or perform a due diligence.
Many simple searches can be quickly and simply performed on the internet. For example the NSW Land Title Office can be searched to check if a company or individual owns any property. An Electoral Roll search (Adult Population Index Search) can be used to confirm an individuals personal details.
Don’t take anything at face value. Ask to see bank and trade vendor references. Talk to the accountant, the neighbours, or anybody who has anything to do with the business.

Filed Under: Discovering a Fraud, Forensic Account Activities, Preventing Fraud, Warning Signs

What are the common warning signs of fraudulent behaviour that a Forensic Accountant looks for? (Part 1)

14 June 2009 By Rushmore Forensic

Listed below are a number of factors that should be considered when assessing whether a business is legitimate or not. If a business fails any of the following tests then you are potentially dealing with a fraudulent company or person:

The letterhead has been typed on a personal computer.
The wording in an email or document has grammatical errors or spelling mistakes.
The company is not listed in the phonebook.
The Email address or web site address is invalid.
The company does not have its own bank account i.e. the bank account is in the name of an individual.
The company has a Post Office address and no physical address.
The phone number is continually engaged or diverts continually to a recorded message.
The business is being run as a sole trader e.g. “Joe’s Plumbing Services”, rather than a limited liability company “Joe’s Plumbing Services Pty Ltd”.
The business is being run from a private residence.
The Australian Business Number (ABN) or the Australian Company Number (ACN) is invalid or is not quoted on company stationery.
If the business is incorporated and uses the abbreviation “Pty Ltd”, check the Australian Securities & Investments Commission, National Names Index that the company exists, is registered, and the directors are who you think they are.
The business is registered in a foreign country. E.g. “KZT Telecommunications Inc.” (US company), “RTW Trading Ltd” could be an Australian public company (easily checked on the ASIC website) or maybe a UK limited liability company (which you can checked online at the UK Companies House website).

To be continued at Part 2 of article.

Filed Under: Forensic Account Activities, Warning Signs

Cost of a Divorce

New fraud prevention routine to detect false suppliers

Employee steals $1.5m to fund betting addiction

Forensic Accountants? – The Who, What, Why and How

Key points to remember when dealing with people in business

Who is a typical fraudster?

What are the common warning signs of fraudulent behaviour that a Forensic Accountant looks for? (Part 2)

What are the common warning signs of fraudulent behaviour that a Forensic Accountant looks for? (Part 1)

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