Forensic Accounting:Tools for Financial Exploitation
InvestigationsOctober 26, 2021
Jason Olson, MBA, CPA/CFF, CFE, CFI, Eide Bailly, LLP Douglas Cash,
MBA, CFE, CFI, Eide Bailly, LLP
Disclaimer The National Adult Maltreatment Reporting System (NAMRS)
and the Adult Protective Services Technical Assistance Resource
Center (APS TARC) are a project of the U.S. Administration for
Community Living, Administration on Aging, Department of Health and
Human Services, administered by the WRMA, Inc. Contractor’s
findings, conclusions, and points of view do not necessarily
represent U.S. Administration for Community Living, Administration
on Aging, Department of Health and Human Services official
policy.
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About the APS TARC The mission of the APS TARC is to enhance the
effectiveness of state APS programs by:
Supporting federal, state, and local partners’ use of data and
analytics,
Applying research and evaluation to practice, and
Encouraging the use of innovative practices and strategies.
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Peer to Peer Calls
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Have you ever wished that you could tap into the expertise of other
APS workers, supervisors or state administrators who are struggling
with the same issues and concerns that you deal with daily? The APS
TARC provides Peer to Peer calls for workers, supervisors and
managers/state administrators.
Workers’ Call: The 2nd Wednesday of each month
Supervisors’ Call: The 3rd Wednesday of each month
Administrators’/Managers’ Call: The 4th Wednesday of each
month
Register via the link sent out at the end of each month by the APS
TARC or email us in order to receive the registration link!
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Housekeeping • You may ask questions of our presenter at any time
by
typing them in the "Questions" box. We will relay as many as we can
to the speaker when we pause for questions.
• This webinar is being recorded and all registrants will receive
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FORENSIC ACCOUNTING Tools for Financial Exploitation
Investigations
PRESENTERS
Jason Olson, MBA, CPA/CFF, CFE, CFI Partner, Fraud & Forensic
Advisory
Services Eide Bailly, LLP
[email protected]
612.253.6554
Douglas Cash, MBA, CFE, CFI Sr. Manager, Fraud & Forensic
Advisory
Services Eide Bailly LLP
Eide Bailly LLP
• Top 25 CPA firm in the nation (Est. 1917) • 350+ partners, 2,500+
professionals, 40+ offices in
14 states
PRESENTATION DISCLAIMER
These seminar materials are intended to provide the seminar
participants with guidance in financial exploitation investigation
matters. The materials do not constitute, and should not be treated
as professional advice regarding the use of any particular forensic
technique or related consequences associated with any forensic
technique.
Every effort has been made to assure the accuracy of these
materials. Eide Bailly LLP and the author do not assume
responsibility for any individual's reliance upon the written or
oral information provided during the seminar.
Seminar participants should independently verify all statements
made before applying them to a particular fact situation, and
should independently determine the consequences of any particular
forensic technique before recommending the technique to a client or
implementing it on the client's behalf.
AGENDA
• Background
• Case Examples
Using your “questions” box, let us know:
• What is the number one thing you want to learn from this
session?
POLLING QUESTION NO. 2
Using your “questions” box, let us know:
• What do you believe is your biggest hurdle when performing a
financial exploitation investigation?
POLLING QUESTION NO. 3
Have you ever engaged a forensic accountant to assist you with a
financial exploitation investigation?
A. Yes B. No
DEFINITION OF FORENSIC ACCOUNTING
An attempt to piece together or reconstruct a past event or events
using financial information where that reconstruction is likely to
be used in some judicial proceeding.
FORENSIC ACCOUNTANTS & EXPLOITATION INVESTIGATIONS
• What types of cases do we handle? • Fraud detection and
investigation • Financial exploitation • Litigation support •
Economic damage calculations
• What types of agencies have we assisted? • Sheriff’s Offices •
Prosecutors/County Attorneys • Adult Protection Services • Local
Law Enforcement
FORENSIC ACCOUNTANTS & EXPLOITATION INVESTIGATIONS
• How does one go about hiring forensic accountants? • Contact
us
• We will let you know what information we need, get an engagement
letter put together and request the records we need
• Yearly contracts with states, counties, and others are
case-by-case
WHAT FORENSIC ACCOUNTANTS NEED FROM YOU?
• Access to medical and financial records
• Interpretation of medical records • Timeline of cognitive
impairment (if any)
WE NEED TO BE THINKING ABOUT…
• Compentency
• Capacity
• Consent
CAPACITY, CONSENT AND UNDUE INFLUENCE ISSUES
• If victim had capacity, was consent obtained by undue
influence?
• If victim’s capacity is impaired, to what degree was it impaired
at the time of the taking or giving of consent?
• Your prosecutor should be able to help you with getting to the
bottom of these questions.
AUTHORITY?
• Guardianship
• Conservatorship
• Depending upon state laws and case facts, you may need to look at
charges of larceny, theft, embezzlement, elder financial abuse,
forgery, financial exploitation or fraud.
REMEMBER…
• May need to rely on the totality of circumstances
INVESTIGATION PROCESS
Document Findings
IDENTIFYING ASSETS
• Identify all assets of the vulnerable adult • Gathering of the
evidence
• How do you identify the assets?
• Real estate • County tax records, closing documents,
property
deeds etc. • Financial accounts
IDENTIFYING ASSETS
• HR documentation • Items at home
• Cash, collectibles, jewelry, vehicles, etc. • Search of
computer
• .csv, .qbb, .qdf, .qif, .xls, .xlsx., etc.
IDENTIFYING ASSETS
• Determine what documents the vulnerable adult signed to place
assets in someone else’s control • POA, signature cards
• Wills and trusts
• Interview vulnerable adult, witnesses and perpetrator if possible
• Preservation of testimony (audio/video tape)
OBTAINING RECORDS
• Obtain electronically if possible • Save statements as .PDF file
to computer from online banking, etc. • Download electronic
transactions to database if possible (i.e. bank transactions
to
Excel)
• Organize and Inventory by: • Account • Date order - oldest to
newest
OBTAINING RECORDS - BANK ACCOUNTS
OBTAINING RECORDS - BANK ACCOUNTS
OBTAINING RECORDS - BANK ACCOUNTS
OBTAINING RECORDS - BANK ACCOUNTS
OBTAINING RECORDS - BANK ACCOUNTS
OBTAINING RECORDS - TAX RETURNS
OBTAINING RECORDS - TAX RETURNS
OBTAINING RECORDS - TAX RETURNS
OBTAINING RECORDS - CREDIT REPORTS
• Bank/investment account records • Statements • Cancelled checks •
Deposit tickets/deposited items
• What do you look for? • Patterns of unusual spending for
vulnerable adult • Signatures and forged signatures • Purchases
that do not make sense • Checks to cash (endorsements on back of
checks) • Compare and contrast (spending before/after allegation) •
Unknown accounts • Withdrawals/ATM withdrawals
EXAMINING FINANCIAL RECORDS
• Loan documentation • Detailed loan statements documenting loan
disbursements and payments • Source documentation related to loan
disbursements
• Maybe advanced into a related checking account or disbursed
through a cashier’s check(s)
• What to look for? • What was the purpose of the loan(s)? • Were
the loan proceeds used as intended? • How were payments being made
and by whom?
EXAMINING FINANCIAL RECORDS
• Credit Cards • Statements • Supporting receipts (if
available)
• What to look for? • Patterns of unusual spending for vulnerable
adult • Purchases that do not make sense for the vulnerable adult •
Cash advances or ATM/cash withdrawals • Compare and contrast
(spending before/after allegation)
EXAMINING FINANCIAL RECORDS
• Compare and contrast between spending from the perpetrator’s
financial accounts versus vulnerable adult’s accounts to which the
perpetrator has access to
• I.e. - No gas/grocery purchases from perpetrator’s accounts,
however numerous gas/grocery purchases from vulnerable adult’s
accounts
DOCUMENTING FINDINGS
• Use of Microsoft Excel (or similar) to quantify type, frequency
and dollar amount of fraudulent transactions
• Consider using tables and graphs to depict fraudulent
transactions • Visual objects are worth a thousand words • Seek out
online training in Excel/with pivot tables
DOCUMENTING FINDINGS
• Narrative/report of the case and the facts identified (who, what,
when, where, why and how) • Include charts and/or graphs when
possible to summarize the financial data
• Workpapers reflecting the suspect financial transactions
• Copies of the actual financial documents to substantiate the work
papers
DOCUMENTING FINDINGS
• It is important to have as much information clearly documented
and substantiated as possible • Victim testimony may not be
reliable or possible
• Age • Health • Mental capacity • Death
• Victim may be unwilling to testify • Embarrassment • Fear of
being perceived as unable to care for themselves
Investigation Process – “Old Method”
INVESTIGATION PROCESS – “NEW METHOD”
FORENSIC ACCOUNTING PROVIDES CLARITY
SUMMARY OF OUR PROCESS
Initial Meeting and Discussion
Examination Procedures
Questions
Testify (If Necessary)
Report – Narrative outlining the documents we examined, our
procedures and our findings
Workpapers – Detail our findings
WHERE TO BEGIN?
This Photo by Unknown Author is licensed under CC BY-NC-ND
NO SMOKING GUN…NO PROBLEM
CASE EXAMPLE
CASE EXAMPLE
$0.00 $5,000.00
2009 2010 2011 2012 2013
Not Suspect
• Start “following the money” – obtain documentation and examine
the transactions
• Summarize your investigation by preparing a report with
supporting workpapers and original source documents
• Forensic accountants can assist you!
THANK YOU
Jason Olson, MBA, CPA/CFF, CFE, CFI Partner, Fraud and Forensic
Advisory Services
[email protected] 612.253.6554
Doug Cash, MBA, CFE, CFI, CFCI Senior Manager, Fraud and Forensic
Advisory Services
[email protected] 303.586.8504
Questions?
Contact & Follow Us https://apstarc.acl.gov/
[email protected]
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Authority?
Remember…
Case Example
Case Example
Case Example
Authority?
Remember…
Case Example
Case Example
Case Example