Colleen Vallen, a partner in Citrin Cooperman’s Valuation and Forensic Services practice, discusses fraud analysis in COMMERCE magazine’s special coverage on how forensic accountants are helping to identify fraud and white collar crime.
By Colleen Vallen, CPA, CFF, Partner, Valuation and Forensic Services
Citrin Cooperman was engaged by a client who received an anonymous tip that an employee was stealing money. Our initial analysis included reviewing company bank statements and canceled checks. There were checks which appeared to be made out to vendors, but the endorsements on canceled checks revealed that the checks were deposited into the employee’s personal account. We also analyzed checks made out to credit card companies and found checks issued to a credit card company that was unrelated to the client. Further research revealed that these payments were used to pay the employee’s personal credit card, and not business-related. In the course of our investigation we determined that, over a three-year period, the employee took more than $1 million from the client. The employee was terminated and criminally prosecuted. Through various means, including reimbursement from the ex-employee and insurance compensation, the client was able to recoup some of their losses.