Excerpt from How to Write a Dick: Financial Investigations
Posted by Writing PIs on July 29, 2011
Financial investigators might be certified as financial investigators and fraud examiners and have clients who are commercial litigators and enforcement attorneys. Many financial investigators also do background checks (which include verification of employment, residences, schools, credit, criminal history, and so forth) for such people as employers and landlords. Financial investigators also perform asset checks (an examination of a business’s or individual’s assets) as well as conduct other information verification for domestic relations attorneys and others interested in performing “due diligence” assays. (Due diligence verification is done to confirm data relied on in securities offerings and in business acquisitions–translate this to big money, and the person doing the work better be right or be ready to be sued.)
A financial investigator’s services might include:
- Finding and recovering money owed
- Enforcing judgment and restitution in criminal and civil lawsuits
- Recovering financial loss through fraud, embezzlement, non-performing loans/leases
- Performing due diligence in pre-litigation, mergers and acquisitions, investments
- Investigating bankruptcy fraud.
A financial investigator might have one or more of following background/credentials:
- Certified Financial Investigator
- Certified Fraud Examiner
- Certified Protection Professional
- Certified Public Accountant
- Expertise in forensic accounting
- Expertise in computer forensics
- Expertise in health care billing and bill coding
- Expertise in questionable documents
- Expertise in banking
- Expertise in the law of real and personal property, taxation, securities and trusts.
One financial investigator claims that only 20 percent of civil cases actually collect, and the other 80 percent go uncollected. Of those who win restitution, only 3 percent collect. Almost sounds like a financial investigator’s job is like shooting fish in a barrel, doesn’t it? The field can be lucrative, but the work can be time-consuming and tedious.
Sample investigation methodology a financial investigator might use:
- Computer research
- Public records research
- Confidential sources
- Analysis of financial statements
- Interviews, witness statements
- Affidavits, depositions, and careful review of legal pleadings and lawyer’s files.
Where might a financial investigator look to find where people have hidden money?
- Limited Partnership
- Limited Liability Company
- Off shore accounts
- Combinations of the above (recently we discovered a man had created a corporation for his wife and had given her substantial property, which she then deeded to the corporation. She headed the corporation, which then sold the property, and she liquidated the assets, and returned them to her name)
What indicators of fraud might alert the financial investigator?
- Lack of reasonable consideration for the conveyance
- Transfer of the debtor’s entire estate
- Relationship between transferor and transferee
- Pendency or threat of litigation
- Secrecy or hurried transaction
- Insolvency or indebtedness of transferor
- Departure from the usual method of business
- Retention by the debtor of possession
- Reservation of benefit to the transferor
Writer’s Slant: If Your PI Is a Financial Investigator, Think About:
- Her background and education. Most financial investigators have training, if not a degree or certification, in some facet of the financial field.
- His tenacity
- Her research abilities and skills
- How well she knows and uses accounting, psychology, and related disciplines as a whole to uncover assets
- His knowledge of real-world business matters
- Her stake in the outcome, as many financial investigators work on a contingency, so they are often as motivated as the defrauding party.
- How she uses her own past to give her an understanding of the present situation
- Their understanding of when and how due diligence is performed or required.
Have a great weekend, Writing PIs
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