• Uncovered diversion of funds of approximately $29 million.
• Identified “bill and hold” invoices of $21 million.
• Discovered over-valuation of finished goods inventory of $30 million.
• Identified and quantified unprocessed credit memos of $8 million.
• Analyzed 53 bank accounts for preference payments, sources of deposits and other unusual transactions.
• Reconciled and verified borrowing base certificates provided by the Company to lenders.
• Established cash receipts projection system.

• Identified fraud totaling $1.2 billion and the various schemes to support this fraud.
• Provided evidentiary trail to the SEC, USPI, and the US Attorney resulting in arrest warrants of principals.
• Identified impact of fraud on lenders’ reported collateral.
• Assisted counsel with the identification of “insiders” and “outsiders” who participated in the fraud.
• Together with counsel, correlated discovered fraud into audit deficiencies.
• Worked with counsel to develop various theories and related documentation to maximize recovery from insurance company and outside auditors.
• Helped counsel to draft complaints against the company’s auditors.
• Participated in preparation for and deposition of auditors.
• Compiled underlying data and prepared insurance loss claim.

• Uncovered borrower’s 10-year scheme to defraud $50 million from lenders.
• Identified $7 million of funds diverted to principals.
• Analyzed management’s adjustment of $46 million of the total $58 million of accounts receivable and $12 million of the total $26 million of inventory presented in borrower’s borrowing base certificate.
• Assisted counsel in correlating discovered fraud into audit deficiencies related to financial statements provided to lenders.
• Together with counsel, drafted complaints against and prepared and participated in depositions of the company’s auditors.
• Assisted counsel in winning the largest recovery in the case, a settlement adverse to the Company’s auditors arising from the lender’s reliance on their negligent misrepresentations.

• Discovered and documented fraudulent activities conducted by majority owner whereby approximately $4 million was redirected to another company owned by majority owner.
• Provided affidavits to the courts explaining our findings.
• Assisted counsel with the preparation of their case and cross-examination of witnesses.
• Provided expert testimony on behalf of the minority owner and lender.
• Court ruled in favor of minority owner and lender resulting in the payoff of loans, accrued interest, buyout of the minority equity plus a normal return on investment.

• Provided expert testimony related to non-GAAP methods of revenue recognition used by defendant to defraud plaintiff.
• Provided expert testimony related to disclosures in defendant’s financial statements that support contractual positions taken by plaintiff.
• Provided expert testimony related to costs capitalized by defendant that support consideration provided by plaintiff under term of contract.

• Discovered, documented and proved $20 million of fraudulent activities by borrower, including: check kiting, inventory and accounts receivable cycling with collusive related parties, and iterative purchasing and selling of non-existent inventory.
• Identified $1 billion in fraudulent accounts receivable and related payments designed to defraud creditors to related parties of an aggregate $100 million.
• Provided comprehensive evidential packages and forensic analyses to counsel to prosecute claims against (1) the owners for fraud and (2) the debtor’s auditors for negligent misrepresentation.
• Provided expert testimony for a State Superior Court lawsuit and for core Bankruptcy Court matters.
• Provided trial exhibits to counsel to graphically summarize and simply represent the complex forensic findings of an extensive investigation into fraud, concealment and misrepresentation.
• Established that the debtor was insolvent when it entered into a loan and security agreement with lender, more than a year prior to its bankruptcy petition.
• Undertook a liquidation analysis. Performed a physical inventory and prepared the debtor for liquidation by auction.
• Organized and supervised security and private investigation activities producing extensive ex parte evidence of fraud and other bad acts including contemporaneous violations of Court orders, lawful stipulations and debt covenants.

• Uncovered methods used by owner to defraud lender of $20 million, including falsified Letters of Credit (L/C) purchases, sales and cash receipts.
• Located evidence to support claim against former lender.
• Discovered fraudulent inventory shipments and shipments at values inflated by at least 100% on borrowing base certificates.
• Developed evidentiary data and exposed auditing deficiencies to support claim against borrower’s outside accountants for opinions on prior years’ financial statements.
• Assisted counsel in drafting complaints against the company’s auditors.
• Provided litigation support services in lawsuits against auditors.
• Advised counsel regarding other third-party claims.
• Provided evidentiary support for the rejection or cancellation of open L/C commitments.
• Assisted in collecting over $1 million of accounts receivable.
• Liquidated FF&E and closed borrower’s premises.
• Inspected 3rd party warehouses and consolidated inventory to a neutral warehouse.

ACCOUNTING MALPRACTICE CASE STUDIES

• Uncovered borrower’s 10-year scheme to defraud $50 million from lenders.
• Assisted counsel in correlating discovered fraud into audit deficiencies related to financial statements provided to lenders.
• Together with counsel, drafted complaints against and prepared and participated in depositions of the company’s auditors.
• Assisted counsel in winning the largest recovery in the case, a settlement adverse to the Company’s auditors arising from the lender’s reliance on their negligent misrepresentations.
• Identified $7 million of funds diverted to principals.
• Analyzed management’s adjustment of $46 million of the total $58 million of accounts receivable and $12 million of the total $26 million of inventory presented in borrower’s borrowing base certificate.
• Evaluated sales documentation and related evidence to determine validity and collectibility of the $46 million of adjusted accounts receivable balances.

• Identified fraud totaling $1.2 billion and the various schemes to support this fraud.
• Provided evidentiary trail to the SEC, USPI, and the US Attorney resulting in arrest warrants of principals.
• Identified impact of fraud on lenders’ reported collateral.
• Together with counsel, correlated discovered fraud into audit deficiencies.
• Helped counsel to draft complaints against the company’s auditors.
• Participated in preparation for and deposition of auditors.
• Assisted counsel with the identification of “insiders” and “outsiders” who participated in the fraud.
• Worked with counsel to develop various theories and related documentation to maximize recovery from insurance company and outside auditors.
• Compiled underlying data and prepared insurance loss claim.

• Discovered, documented and proved $20 million of fraudulent activities by borrower, including: check kiting, inventory and accounts receivable cycling with collusive related parties, and iterative purchasing and selling of non-existent inventory.
• Identified $1 billion in fraudulent accounts receivable and related payments designed to defraud creditors to related parties of an aggregate $100 million.
• Provided comprehensive evidential packages and forensic analyses to counsel to prosecute claims against (1) the owners for fraud and (2) the debtor’s auditors for negligent misrepresentation.
• Provided expert testimony for a State Superior Court lawsuit and for core Bankruptcy Court matters.
• Provided trial exhibits to counsel to graphically summarize and simply represent the complex forensic findings of an extensive investigation into fraud, concealment and misrepresentation.
• Established that the debtor was nearly insolvent when it entered into a loan and security agreement with lender, more than a year prior to its bankruptcy petition.
• Organized and supervised security and private investigation activities producing extensive ex parte evidence of fraud and other bad acts including contemporaneous violations of Court orders, lawful stipulations and debt covenants.

• Uncovered methods used by owner to defraud lender of $20 million, including falsified Letters of Credit (L/C) purchases, sales and cash receipts.
• Located evidence to support claim against former lender.
• Discovered fraudulent inventory shipments and shipments at values inflated by at least 100% on borrowing base certificates.
• Developed evidentiary data and exposed auditing deficiencies to support claim against borrower’s outside accountants for opinions on 2000 and 2001 financial statements.
• Assisted counsel in drafting complaints against the company’s auditors.
• Provided litigation support services in lawsuits against auditors.
• Advised counsel regarding other third-party claims.
• Provided evidentiary support for the rejection or cancellation of open L/C commitments.
• Assisted in collecting over $1 million of accounts receivable.