The Fraud Examiner
Cash Me if You Can
By Ken Stalcup, CFE, CPA
"If he be Mr. Hyde," he had thought, "then I shall be Mr. Seek." - Robert Louis Stevenson, The Strange Case of Dr. Jekyll and Mr. Hyde
Lawsuits and divorces have a strange effect on people. When faced with a big financial loss, otherwise honest and trustworthy people will begin to hide assets and lie about their cash.
In a fictionalized recent case, our client won a legal settlement and we were asked to help determine if the defendant had the ability to pay it. The defendant claimed they had no resources, no cash to pay the claim. Our client told us they were prepared to take a "haircut" but wanted us to find as many assets as we could. We knew that cash would be the quickest and easiest asset to satisfy the settlement. Working with our client's attorney, we were able request a long list of documents and we concentrated on locating the cash.
In your search for your target's cash, start with his or her monthly bank statements. Ideally, the bank statements will include all the receipts and disbursements from the account as well as images of the checks paid out of the account.
Start by looking at the disbursements and withdrawals. Ask and answer the following questions: Are there any electronic transfers to previously undisclosed accounts? Do any payments indicate previously undisclosed relationships? Did your target transfer cash or loan money to family members or friends?
In our case we could see recurring payments for various debts, obligations and ordinary expenses. We had to consider if this account and account activity covered all of our target's financial life. Some common items seemed to be missing. Our target had payments for groceries and restaurants, but the amounts spent were not enough to keep a household furnished or feed one person for a week. We also noted that there were no payments for certain common expected expenses for cable TV and insurance. We suspected there were other cash accounts. We asked how our target paid for his cable TV and we ultimately located another account.
If you suspect your target has an undisclosed bank account, you should review for transfers to other bank accounts. If you have access to check copies from a known account, look for transfers to other bank accounts. Keep in mind, bank routing information will be printed on the back of the paid check when it clears the payer’s account and this might indicate that your target has a second account.
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