Quickbooks Audit Trail: Fraudulent Behavior Detection

False Claims Investigation

When a whistleblower sounded the alarm on their employer that had allegedly violated the Anti-Kickback Statute and submitted false claims to the government, FSS was hired by the whistleblower’s attorneys to pinpoint evidence and determine the value of any identified claims.

Vulnerability Assessment – Cash Flow Shortages

FSS was hired by a company to perform a vulnerability assessment to determine if cash flow shortages were the result of financial mismanagement or asset misappropriation.

Vulnerability Assessment

FSS was engaged to perform a vulnerability assessment of a large construction company’s accounts payable and payroll.

Embezzlement – Nonprofit

FSS investigated allegations of misappropriation of assets and excessive spending by an employee of a federally funded nonprofit organization with reporting responsibilities to the Office of the Inspector General.

Computer Forensics

FSS was hired by the Board of Directors of a regional company to assist with an internal investigation amid questions of unexplained declines in cash flows and the lack of timely financial reporting.

Asset Tracing – Misappropriation of Assets

FSS investigated the alleged misappropriation of assets by two former employees of a multi-faceted conglomerate.

Internal Investigation

FSS was hired by a company to investigate whistleblower allegations to the IRS of underreported revenue.

Ponzi Scheme

FSS was hired by the bankruptcy trustee to determine if an investment run by a rogue money manager (“the Project”) was a Ponzi scheme and to testify before the bankruptcy court regarding our findings. New investors were promised unusually high rates of return. The payment of accrued interest to short term investors was paid current […]

Embezzlement

FSS investigated the allegations of misappropriation of assets from a medical practice amid concerns that the accounting clerk was embezzling funds.

Corruption and Conflicts of Interest

The Los Angeles Unified School District (LAUSD) is the second largest school district in the country with an annual budget in excess of $11 billion.  Mired with problems and a price tag estimated over $200 million, the LAUSD hired FSS to determine the sources and uses of funds for the Belmont Learning Center project. The […]

The Power of Advanced Data Analytics | Lindsay H. Gill

Lindsay H. Gill, director of forensic technology, explains the benefits advanced data analytics bring to financial investigations Advanced data analytics can provide unparalleled insights when attorneys enlist forensic investigators, helping to ensure vital information does not go undetected.

Analyzing the Variety of Data | Lindsay H. Gill

Lindsay H. Gill, director of forensic technology, discusses the differences between structured data – or “traditional” data – and unstructured data, which investigators use to help fill the holes or see the bigger picture within a case. Lindsay also explains how forensic investigators should use and compare structured and unstructured data.

Speech, Voice and Body Language as a Lie Detector | Kelly J. Todd

Kelly J. Todd, managing member and member in charge of forensic investigations, discusses how investigators can use vocal tone and body language as a lie detector. Kelly also outlines how statement analysis can help an investigator understand the meaning behind the words, and highlights body language red flags to look for in an interview.

Detecting Deception: Determining the Baseline | Kelly J. Todd

Kelly J. Todd, managing member and member in charge of forensic investigations, explains that everyone has a “norm”– a basic pattern of behavior that they exhibit under normal amounts of stress, which is also known as their baseline. In this video, Kelly outlines the steps to take to determine the baseline during an interview. She […]

Myths in Detecting Deception | Kelly J. Todd

Kelly J. Todd, managing member and member in charge of forensic investigations, discusses common myths in detecting deception. Contrary to popular belief, detecting deception can be a challenge, as people tend to focus on the wrong signals. Kelly explains misconceptions about the behaviors and body language of someone who is lying, and how to increase […]

Using Data to Tell a Story & Find the Answers | Kelly J. Todd

Kelly J. Todd, managing member and member in charge of forensic investigations, discusses how FSS uses advanced data analytics to ferret out the truth in fraud investigations via data visualization. Kelly explains how electronic evidence and data can be leveraged in forensic investigations, from verifying or challenging a plaintiff’s testimony to identifying trends and patterns […]

Defining Embezzlement & How to Prevent It | Kelly J. Todd

Kelly J. Todd, managing member and member in charge of forensic investigations, explains what embezzlement is and how it occurs. To prevent embezzlement from occurring, it is essential for employers to trust their employees, but verify their actions. In the video, Kelly provides best practices that employers should implement to accomplish this.

Conflicts of Interest: Educational Tools for Employers | Kelly J. Todd

Kelly Todd, managing member at Forensic Strategic Solutions, discusses how conflicts of interest can arise in the workplace and challenges associated with conflicts of interests that employers often face. She also discusses educating employees on conflicts and how to detect conflicts.

The Common Denominator of Corruption: Conflicts of Interest | Kelly J. Todd

Kelly Todd, managing member at Forensic Strategic Solutions, discusses the close relationship between conflicts of interest and corruption. She also discusses preventative measures that can be taken to minimize opportunities for conflicts of interest to morph into corruption.

Leveraging Social Media in Fraud Investigations – II | Lindsay H. Gill

Lindsay Gill, director of forensic technology at Forensic Strategic Solutions, shares insight into the benefits associated with attorneys hiring forensic investigators to uncover evidence on suspects’ social media accounts. She also discusses how to authenticate the evidence gathered and the methods to do so.

Leveraging Social Media in Fraud Investigations – I | Lindsay H. Gill

Lindsay Gill, director of forensic technology at Forensic Strategic Solutions, discusses social media and its role as a helpful tool to uncover fraudulent electronic evidence in an investigation. She also describes best practices for forensic investigators to collect, analyze and interpret findings to connect the dots.

What to do When You Suspect Fraud at Your Organization – II | Kelly J. Todd

Kelly Todd, member in charge of forensic investigations, discusses how to handle the alleged perpetrator, including notifying the perpetrator, conducting an admission-seeking interview and restricting the wrongdoing employee from company access. She also notes the importance of notifying your insurer when you think you might have fraud occurring in your organization.

What to do When You Suspect Fraud at Your Organization – I | Kelly J. Todd

Kelly Todd, member in charge of forensic investigations, discusses the prevalence of fraud in businesses and actions one should take when they suspect fraud in their organization, including assembling a team for the fraud investigation and securing potential evidence.

Data Analytics with a Focus on Technology | Lindsay H. Gill

Lindsay Gill, director of technology at Forensic Strategic Solutions, reviews the key areas in which technology has changed the landscape of fraud investigation and how data continues to become a growing risk for businesses.

Employee Fraud Awareness Training | Kelly J. Todd

Kelly Todd, member in charge of forensic investigations, gives fraud prevention tips aligning with the ACFE 2014 Report to the Nations research describing employee fraud awareness training as an extremely effective way to reinforce fraud policies, encourage anonymous tips from whistleblowers and establish compliance.

Fraud in Charitable Non-Profit Organizations | Ralph Q. Summerford

Ralph Summerford, president of Forensic Strategic Solutions, cites recent New York Times statistics to help reveal some reasons for the high frequency of fraud in non-profits, including high turnover, poor management and lack of tax audit enforcement. All of these issues make it increasingly difficult for the IRS and law enforcement to uncover and prosecute […]

Financial Fraud Investigations: Why an Employee’s Vacation is a Great Time to Detect Fraud | Lindsay H. Gill

Time off isn’t just a necessity to help employees recover and regroup, it’s also an opportunity for an organization to measure its efficiency and to uncover vulnerabilities it may face from fraud, waste, and abuse. Here are just a few of the ways an organization can leverage its vacation and time-off policies to help detect […]

In a Financial Fraud Investigation, It Pays to Follow the Digital Footprint | Lindsay H. Gill

Fraudsters often believe they have covered their tracks so well that their activity is untraceable, but they are increasingly running into a significant obstacle when attempting to hide their crimes: Their digital footprint. During the last decade, people have integrated digital tools into their personal and business lives at an astonishing rate. Since 2010, for […]

Unlocking the Potential of Electronically Stored Information to Determine Lost Profit Damages | Kelly J. Todd

At many small businesses, it’s not uncommon to still find a mass of paper records, yellowing with age and haphazardly tossed in boxes, as well as old-school computers and dot-matrix printers with tractor feeds and green bar paper. Yet even the most unorganized and technologically unsophisticated small business may contain a trove of useful electronically […]

Fraud Examination: Protecting Your Business from Workplace Fraud  | Kelly J. Todd

Despite the distractions and upheaval the Covid-19 pandemic has had on your business, be careful not to overlook another threat that could be looming around the corner — fraud in the workplace. Occupational fraud is the misuse of one’s occupation for personal gain and includes anything from stealing office supplies to cooking the books to […]

What Beneficiaries Can Do to Help Spot Fraud in a Trust or Estate | Lindsay H. Gill

It’s an all-too frequent concern for people who are no longer managing their own finances: Are they being taken advantage of by a trustee, executor, or attorney-in-fact—and what can they do to spot and prevent such activity? At Forensic Strategic Solutions, we are often approached by beneficiaries or their loved ones to investigate possible trust […]

How to Prevent Workplace Corruption and Collusion? Think Like a Financial Fraud Investigator | Kelly Todd

When financial fraud investigators discuss corruption in the workplace, they are usually referring to a single employee who is exploiting their position for personal benefit. Collusion, however, involves multiple people working together to abuse their power. When a collision occurs, the damage to a company’s finances and reputation multiplies. And pinpointing the perpetrators and the […]

The Shift to Teleworking: Protecting Your Business Data from Fraud | Kelly Todd

The mass exodus of employees from traditional offices in the wake of the COVID-19 pandemic and the growing ease with which information can be moved and shared has made one thing clear: Businesses are facing a risk-filled new frontier when it comes to their data security. The rapid shift to telework has only expanded the […]

Eight Tips for Detecting Fraud in Accounts Payable | Lindsay H. Gill

According to the Association of Certified Fraud Examiners 2018 Report to the Nations, fraudulent disbursement schemes remain the costliest form of asset misappropriation fraud to threaten small businesses. Although this risk can seem overwhelming, it may be avoidable through taking proactive steps against fraud within your company. Here are eight tips to help you expose […]

The Power (and Variety) of Data in Forensic Investigations | Lindsay H. Gill

Time and time again, we trumpet the incredible value of advanced data analytics in forensic investigations – often, it is the key to finding the needle in the haystack. Fortunately, our firm remains at the forefront of utilizing data to identify unexpected patterns when investigating financial fraud – that red flag that tells us something isn’t as it should be – whether for a qui tam case involving kickback schemes or a case of underreported revenue.

Detecting Deception: Gathering Evidence and Seeking Admission | Kelly J. Todd

OPEN is a key word to remember when detecting deception. Open body language – and an open mind – are your best friends when looking for the truth. An open mind is going to help keep you in the “information-gathering” mode, which usually proves to be more effective than the gruff interrogation techniques you’ve seen […]

Detecting Deception: Body Language | Kelly J. Todd

Now that we’ve peeked behind the curtain of speech and facial expressions, it’s time to move on to body language. But before we focus on our subject’s nonverbal cues, let’s shine the light on our own body language. Remember: when detecting deception, we aren’t looking for the lie – we are looking for the truth. […]

Detecting Deception: Facial Expressions | Kelly J. Todd

THE FACIAL FAUX PAS Now that you have gathered your intel – you have your subject’s baseline squared away and you’ve peeked behind their words – it’s time to focus on the facial faux pas. There are many facial signs that are likely indicators of deceptive hot spots. When your subject’s expressions and gestures don’t […]

Detecting Deception: Speech and Voice as a Lie Detector | Kelly Todd

Once we’ve established the baseline, it’s time to drill down to expose the meaning behind the words. While body language has long been the focus of detecting deception, research has shown that the analysis of a person’s speech may be much more accurate than merely observing non-verbal behavior. No matter the lie, there will always […]

Detecting Deception: Calculating the Baseline | Kelly J. Todd

In my previous blog post, I noted that when assessing whether someone is lying, you must first consider the person’s baseline – their typical behavior. A LIAR IS CAUGHT… OR IS HE? Body language helps us identify a person’s stress signals of deception. The key word here is “helps” – body language is far from […]

Detecting Deception: Common Myths | Kelly J. Todd

THE MASTER OF DECEPTION Bernie Madoff infamously stole $65 billion reflecting 4,900 client accounts in a Ponzi scheme. All told, his investors lost approximately $20 billion of real principal. How was he able to look hundreds of people in the eye without arousing suspicion, all the while knowing he was robbing them blind? This man […]

Trust Your Employees, but Verify Their Actions | Kelly J. Todd

Our team recently wrapped up another sizeable fraud examination for a small business whose trusted bookkeeper embezzled hundreds of thousands of dollars. While the names and the faces of fraud change, the story remains the same: the employee you least expect, the most trusted of them all, takes advantage of their position – and you […]

Best Practices for Employers: Conflicts of Interest | Kelly J. Todd

In my last blog, I discussed why corruption in the workplace always requires a conflict of interest. Conflicts of interest arise when employees have interests that may make it difficult to maintain one’s duty of loyalty to their company in an objective and effective manner. Quashing all conflicts of interest within businesses would be difficult to conduct; therefore, it is important to know how to reduce the risks inherent in conflicts of interest.

Quickbooks Audit Trail: Fraudulent Behavior Detection | Lindsay H. Gill

The QuickBooks Audit Trail (or Audit Log, depending on the version) provides a log of each accounting transaction and denotes any additions, deletions or modifications affecting the integrity of the transaction. The tool captures every transaction from the time it is initially entered into QuickBooks, and tracks changes to the original entry, including transaction type, date, account, vendor/customer name, transaction amount, quantity, and price. The Audit Trail also reveals the User ID under which the entry, deletion or modification was made. The Audit Trail is a report built in the QuickBooks ReportCenter– all you have to do is click a button to generate the report.

Why Corruption Always Requires a Conflict of Interest | Kelly J. Todd

When it comes to corruption, there is almost always a common denominator: a conflict of interest. A conflict of interest exists when an individual or corporation has the opportunity – real or perceived – to exploit their position for personal or corporate benefit. Corruption occurs when the individual or corporation takes advantage of that opportunity and indeed abuses their position for private gain.

Social Media Evidence: Where to Look and Protocols to Follow | Lindsay H. Gill

As a digital technology expert, it is fascinating to observe how today’s technology-centric world obsesses over anything and everything digital – especially social media. From sharing locations on Instagram and Facebook to live tweeting events, people constantly update their friends – and strangers, if their account is public – on their every movement. Social media […]

The Digital Footprint: Where to Look | Lindsay H. Gill

The world of technology offers the opportunity for fraud experts to trace the “untraceable.” With technology becoming more popular and present in our lives by the day, people are conducting their lives more digitally, whether through email, texting, social media or Internet browsing. Collecting, analyzing and interpreting the electronic evidence of fraudulent activity is becoming more widespread in the fraud examination world, and will most likely soon become the standard.

Fraud Suspected in the Workplace? Employers, You Better Read This – Part Two | Kelly J. Todd

When you think of fraud within an organization, a newer employee may be top-of-mind, but according to the Association of Certified Fraud Examiners (ACFE), seven percent of perpetrators committed fraud during their first year and more than 53 percent had been with their organization for more than five years.

Fraud Suspected in the Workplace? Employers, You Better Read This – Part One | Kelly J. Todd

There’s no way around it—according to the Association of Certified Fraud Examiners, an estimated five percent of annual revenues are lost to financial crime. What do these numbers mean for you? Big or small, public or private – with statistics like these, there’s a good chance your business is more likely than not to fall victim to internal fraud.

Technology Talk: Active Data for Excel | Lindsay H. Gill

We all recognize budget is a constant concern for auditors and investigators. Oftentimes our technology budgets are just too tight. We find ourselves looking for powerful tools to add to our toolbox that do not break the bank. One of these tools is Active Data for Excel.

Identifying Fraud Symptoms: What Really Goes on Between the Balance Sheets? Part II | Kelly J. Todd

Identifying fraud symptoms in financial statements requires observation and recognition. If you don’t look, you’re unlikely to find it. Worse yet, if you do look, are you sure you will recognize the symptoms of fraud?

Identifying Fraud Symptoms: What Really Goes on Between the Balance Sheets? | Kelly J. Todd

Fraud, unlike acts of terror, murder, or bank robbery, is rarely observed. Instead, only symptoms or indicators, most often exhibited through changes in the financial statements, are present.

Technology Talk: Excel Shortcuts | Lindsay H. Gill

I was recently surprised to learn at a team meeting that my peers were not as familiar with the many Excel shortcuts that I apparently take for granted. Urged by our team to share more, I decided I should share a few of the more frequently used Excel shortcuts with you:

Cyber-security: Minimizing Internal Threats | Kelly J. Todd

Like a magician’s sleight of hand, the barrage of headline news related to hackers and cyber criminals may divert attention away from the equally dangerous, but perhaps less obvious, threat to your corporate assets: employees. While trusted employees are moving, sharing, and exposing corporate data just to do their jobs, the malicious employee may be deliberately taking confidential information for personal gain or other nefarious reasons.

When Should You Start Looking for Fraud? | Kelly J. Todd

Larger organizations are more likely to experience fraud by an employee’s misuse of influence in a business transaction in order to gain a direct or indirect benefit. Small organizations, however, typically fall victim to the rogue employee who directly steals the organization’s assets or misuses its resources.

B.Y.O.D. | Lindsay H. Gill

“Bring your own device,” or “B.Y.O.D,” is a concept that an increasing number of companies are implementing. B.Y.O.D allows employees to use their personally-owned devices in the work place. These devices can range from laptops and tablets to cell phones and flash drives. While B.Y.O.D may be a good plan in theory – employees can work with devices they are comfortable using – It is important for employers to thoroughly consider the implications and potential pitfalls before implementing a B.Y.O.D policy. Consider, for example, the following key areas regarding the security of corporate information and infrastructure:

Social Media in Fraud Investigations | Lindsay H. Gill

There’s no denying it: social media has changed the way we interact with each other. People are tweeting live from events, “checking in” on Facebook, posting pictures to Instagram and commenting on, liking or sharing just about everything. The amount of personal information that social media users willingly put “out there” is staggering.

Computer Forensics v. E-Discovery: What Every Expert Should Know | Kelly J. Todd

Increasingly, the answers to the most fundamental litigation questions – the “who, what, where, when, and why” – are contained in electronically stored information (ESI), which can be retrieved through electronic discovery (e-discovery) and/or computer forensics.

How to Find Electronically Stored Information | Kelly J. Todd

In our case study, gas station owner, Morris, has alleged that Green Fuel, a small gasoline distributor, overcharged him. Both parties had inadequate and unsophisticated documentation, making determining losses very difficult.

Electronically Stored Information: The Case Study | Kelly J. Todd

You might not think that a small business would have useful or accessible electronically stored information (ESI). Consider this example of identifying and obtaining relevant forensic evidence to determine lost profit damages with this particular small business.

Unlocking the Potential of Electronically Stored Information | Kelly J. Todd

Think twice before you assume that an unsophisticated small business cannot possibly have any useful or accessible electronically stored information (ESI).

Time off to discover fraud | Lindsay H. Gill

Regardless of the time of year, employees will always have reasons to come and go in the office. Vacations, conferences and meetings are a regular part of most employees’ daily schedules.  So rather than worrying about the empty chair they leave behind, take advantage of the time they take off to measure efficiency and expose […]

Preventing fraud during the holidays | Lindsay H. Gill

As we discussed in last week’s blog post, there can be more fraud during the holiday season for a variety of reasons. A few quick steps you can take to reduce your vulnerability to fraud include: Be present – The perception of detection is often one of the strongest controls against fraud.  Business owners need […]

Why is there more fraud during the holidays? | Lindsay H. Gill

Fraud happens all the time, but the holiday season provides situations that people may try to take advantage of. The “fraud triangle” has three points to it: Need or Greed Opportunity Rationalization During the holidays, we often see changes in two of these points: increased need or greed and increased opportunity. People want to be […]