P.I. Tips: Answering Writers’ Questions About Fraud Investigations

Writer’s Question: What makes fraud different from an average garden-variety argument over a broken-down business deal?

Answer: We look for signs of one person (or several persons) who hide important information or who abuses his/her position in a business relationship.  An example of this would be an accountant who knowingly misrepresents the financial condition of a company.  Another example is a business manager who willingly hides lawsuits against his/her company from a potential purchaser.

Writer’s Question: Can someone be guilty of fraud in a divorce proceeding?

Answer: Yes.  When one partner hides income or assets, or even hides the fact of remarriage (when that remarried partner is still receiving maintenance from the former spouse), you find fraudulent misrepresentations that can be the subject of a separate civil lawsuit for fraud.  Keep in mind that any divorce proceeding is the dissolution of a marriage partnership that mimics a business partnership.  In both instances, you can have misrepresentation and reliance on those misrepresentations.

Writer’s Question: As investigators, what do you look for when you are asked to find fraud?

Answer: Like most investigations, a fraud investigation begins in public records, where we look to uncover business acquisitions and acquisitions of personal property that show an unusual amount of income that the partner investigated is otherwise unable to access.  For example, if a business owner who is selling a corporation that’s in financial trouble, has recently purchased a new car, a new house, and a boat — information we’ve dug up through property, vehicle and boat ownership records — we know that he/she is likely to have emptied corporate assets to make these purchases in his/her name.  What did the owner think h/she was accomplishing by purchasing these personal property items?  Hiding money.  Why didn’t h/she think they’d be caught?  Well, sad to say this, but often people just do dumb things, probably because they’ve gotten away with such acts in the past, too.  The flip side is people often don’t think someone else, such as a law firm/investigator, is going to dig for this information.

Have a great week, Writing PIs

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