Fraud investigation

Preventing, investigating and measuring business fraud

Davie Kaplan has helped business clients and legal practitioners in a variety of fraud-related cases ranging from general internal control reviews to cases involving hundreds of thousands of dollars of embezzled funds.

When business owners or legal advisors suspect fraud, embezzlement or other criminal activity in a company, we are a resource to investigate the fraud and measure the damages. Businesses affected by criminal activity also need to understand how to prevent such crimes from happening again.

Is your company susceptible to fraud?

The main areas affected by fraud:

Accounts Receivable
Employees in the accounts receivable area can commit fraud against the company in various ways. For example, they can use various techniques to cover up a theft of cash.

Inventory
Employees have been known to steal inventory or the proceeds from scrap sales. They can also charge the costs of other embezzlement activity to inventory, where it is not readily discernible.

Purchasing
Payments to outside vendors or contractors could inadvertently be contributing to an embezzling employee's personal finances. For example, an employee may create fraudulent invoices for intangible services or products, participate in overbilling schemes, or set up fictitious contractors or suppliers to be paid by the company. In these cases, the payments may actually be going to the employee or other involved parties.

Payroll and Personal Expenses
Employees can also create fictitious payroll tax returns to substantiate claims of ghost personnel. Personal expenses are another area that can be subject to fraud. Businesses should have control systems in place that can verify the legitimacy of claimed business expenses.

Cash
A company's available cash can be an easy target for employee fraud. Businesses should have a system of checks and balances to ensure that available financial data accurately reflects the company's cash situation. A fraud examiner can help a company understand its cash-flow situation in terms of overall business operations, and can identify inconsistent industry or business practices within an organization.

Management-Level Fraud Schemes
Shareholders and other external stakeholders can also be victims of fraud caused by a company's management. Financial statements can be presented to report misleading financial information, fixed assets can be valued or classified inaccurately, revenue can be recognized prematurely or improperly, or expenses can be shifted to present misleading financial information.

If you think your company may be susceptible to fraud, contact Jeffrey M. Wexler at (585) 454-4161