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Following Fraudsters’ Money – 28th January 2013

Member: Nifa

With fraud of some sort or another being in the news almost every day, forensic accountants are being thrust into the limelight, with an article on the practice being used in divorce settlements even making it into the London Evening Standard this week. This is because forensic accountants specialise in following the money trail and are called in by lawyers and other investigators whenever a fraud is uncovered or when people are deliberately trying to hide their assets, as in the case of Scot Young, who was jailed for contempt of court last week in the long-running financial remedy proceedings with his former wife, Michelle.

Although financial misdemeanours often come to light through routine accounting checks, even very good accountants and auditors can easily miss clues when investigating fraud, which is where more specially trained forensic accountants come into their own. They will track fraud back years, scouring each deposit and expense in the fraudster’s businesses and personal life for clues as to when and where the money was taken and where it was spent and, in addition to searching through records, will interview employees, business partners and spouses.

According to the National Association of Forensic Accounting in America, the first known use of the practice was in the case that convicted Al Capone on tax fraud charges but since then the industry has burgeoned and fewer and fewer fraudsters are ‘getting away with it’. This is obviously filtering through to the criminally-minded, as in the past 12 months the number of cases perpetrated by professional criminals fell from 98 at the end of 2011, valued at £1.4 billion, to 79 in the 12 months to December 2012, valued at £414 million. Perhaps the thought of a forensic accountant on their trail has finally put the hardened criminal off.

Author: Roger Isaacs, 28th January 2013

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