Unraveling Complex Frauds
Forensic Accounting & Litigation Support
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SEC Accountant Warns of Heightened Fraud Risk Amid Recession Fears, Market Selloff
November 3, 2022
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Wall Street’s top watchdog is warning that the market selloff and fears of a recession could encourage more companies to cook their books, and it is pressuring auditors to catch them.
“The current economic environment is subject to significant uncertainties and, historically, that oftentimes leads to heightened fraud risk,” Paul Munter, acting chief accountant at the Securities and Exchange Commission, said in an interview. (cont.)
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During our 40 years of business providing forensic services, strategic insights and litigation support, we have uncovered billions of dollars in fraudulent financial schemes during good times and bad. These matters have involved partnerships, lenders and their debtors, private equity firms and Federal Equity Receiverships under the:
- U.S. Securities and Exchange Commission (SEC)
- Federal Trade Commission (FTC)
- Commodity Futures Trading Commission (CFTC)
Unraveling frauds is some of the most interesting work we do. Here are a few examples.
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Forensic Accounting & Litigation Support for Receiverships |
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Internet Marketing Scam - FTC Investigation |
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Numerous complaints to the FTC about unauthorized credit card charges by Internet-based retailers resulted in a formal FTC investigation of interrelated companies and the appointment of a Federal Receiver. As forensic accountant, we:
- Worked with the Federal Receiver to take control of the defendants’ multiple operating locations, recovering significant cash on hand, including $500,000 in a safety deposit box.
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- Conducted an investigation revealing a complex operation to defraud consumers involving over 30 merchant credit accounts 100+ aliases, 30+ shell companies, 60+ bank accounts and procedures to transfer monies to personal bank accounts.
- Identified over $20 million in profits. The defendants eluded associated tax payments.
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“In a federal equity receivership which included businesses involved in deceptive Internet-based sales schemes, Brandlin & Associates’ relentless efforts were key to unraveling an incredibly complex financial and corporate web.”
- Receiver
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Precious Metals Investment Scheme – CFTC Investigation |
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The CFTC accused the defendants of perpetrating a fraudulent precious metals investment scheme involving approximately 1,600 investors and more than $185 million in customer funds. The case is pending. As forensic accountant, we:
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Assisted the court-appointed Receiver with an asset freeze – including millions of dollars in cash at national financial institutions, business assets, personal property, and high-end automobiles - and marshaled estate assets. Saleable items were liquidated with funds transferred to the Receiver for safekeeping
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- Analyzed 16 bank accounts for up to 3 years. Recorded, sorted and catalogued all transactions for each account in an easy-to-use database.
- Provided an accounting of the entities’ sources and uses of investors’ funds to the Receiver.
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Attorney Embezzlement - State Receivership |
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Criminal charges were filed against two trust attorneys alleging multiple felonies: stealing and defrauding of money, real and personal properties of clients; and unlawful use of their personal information. The defendants allegedly gained control of clients’ estates via falsified power of attorneys and self-dealing wills and / or trust documents. |
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Clients were elderly and some were incapacitated. The case is pending. As forensic accountant, we:
- Supported the court-appointed Receiver, thoroughly investigating the purported embezzlement of client trust funds.
- Successfully recreated and validated the trust accounting activity and reconciled it to bank statements.
- Delivered a forensic accounting report and supporting exhibits to the District Attorney to assist in the criminal prosecution of the attorneys.
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I'm interested in your economic predictions and what you're doing to prepare for 2023. Please reply to this email or call to get in touch.
Jeff Brandlin
(310) 789-1777
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Brandlin & Associates is an exclusive provider of financial workouts and restructurings, forensic accounting, financial due diligence and litigation support for senior lenders, mezzanine funds, private equity groups, attorneys and middle market companies.
We pride ourselves on offering superior technical expertise, years of practical experience and unparalleled service to decipher financial and operational performance metrics. As a result, our clients are able to make informed decisions in a timely manner.
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