October 2018
In This Issue

 

 
We are grateful to have the opportunity to provide you with this valuable information via our monthly e-newsletter and our unparalleled forensic accounting and fraud investigative services.

The goal of this e-newsletter is to provide you critical, inside information that will help you "follow the money" in business disputes, divorce cases, fraud cases, estate matters, corporate embezzlement and to prevail when defending an IRS criminal case. We will do this by sharing the knowledge we have from our 25+ years of experience as an IRS Special Agent and 16 years as a private investigator / forensic accountant.

We take special care to ensure the information we provide you in "The Beacon" is the latest and most current information available. 
In this edition, we talk about why business partners steal money.

We want to write about topics that will assist you in prevailing with fraud, divorce, estate and probate, and IRS criminal cases. Please e-mail us your topics of interest to Thebeacon@sageinvestigations.com
 
We encourage you to share our e-newsletter with others in your sphere of influence.  
 
Sincerely,
 
Edmond J. Martin
 
Principal, Chief Investigator
Certified Fraud Examiner (CFE)
Texas Certified Investigator (TCI)
Why Did My Partner Steal from Me?

Experience has shown that individuals steal from their partners for a number of reasons including to support a habit including drugs, gambling, women. But the main reason is greed for money and easy access to the proceeds of the business when control systems are weak. One of the keys to why your partner will steal from you is he/she perceives that he/she does all the work. From construction to operating a bar individuals steal from their partners especially if they are absentee owners. They steal services of a vendor, health insurance for their estranged wife, fees paid for an ATM machine, proceeds from the sale of an asset, materials from a job site and many other means. The theft is indirect most the time except in the direct embezzlements of money.

Psychological studies show that people steal because they have a psychological disorder, kleptomania, depression, low self-esteem, a desire to fit in, or the feeling of being financially deprived. In the case of embezzlement, the reasoning could be that he/she has lots of money anyway and will not miss it. The fraud triangle is appropriate here because it includes opportunity, motivation, and rationalization to justify the theft. Regardless of the reason our clients must deal with the aftermath of the theft and determine how to recover.

Scenario:

A prominent businessman was approached by a friend with an idea of providing framing crews for the lucrative housing market. The businessman (Partner #1) established a partnership with proper legal documents but without a partnership agreement. Partner #1 made the initial capital investment and purchased the tools for the workers, obtained permits, and negotiated the contracts with a major home builder. Partner #2 was responsible for organizing the crews for the jobs. Partner #1 had a thriving primary business that needed his attention, therefore he was an absentee owner of the framing business. Quickly, Partner #2 became known as the boss among the framing crew. Partner #2 organized two crews and could frame two homes per week and the profit margin was 36% on each job which was very profitable for the partners. Partner #2 hired his son as foreman and his son organized additional crews and things changed. The costs of the framing crews increased, and the profit margin decreased to 8% and Partner #1 continually contributed capital to meet the payroll. At first Partner #1 did not realize what was taking place. The son of Partner #2 was
... Read More  
About Us
Serving your needs is our priority.
   
At Sage Investigations we are dedicated to serving our clients nationally, to help them navigate the difficulties of dealing with fraud, divorce, estate and probate, the IRS Criminal Investigation, and other complex (forensic) financial fraud investigations. By narrowing our focus to our primary strength of following the money, we steer our knowledge, efforts, and experience to financial issues. We help our clients propel their cases forward by assisting in the review, acquisition, and organization of financial records, evaluating the elements of their cases, and helping create winning strategies. Through the use of our proprietary advanced financial investigative technology we trace and analyze complex financial data quickly, easily and efficiently, saving our client's time and money.
 
Sage handles all cases with altruism, professionalism, honesty, integrity, passion and respect. When you hire Sage, you hire a team of professionals with skill and knowledge that helps you have more effective solutions. We are innovative with our DIO cutting edge technology, and perform every investigation in an orderly and organized manner to develop a clear investigative roadmap and deliver a quality work product. The compass that guides us is strong leadership and accountability. Learn more ...
 
Contact Us

P.O. Box 160161
Austin, TX 78716
Phone: 512-659-3179
Fax: 512-328-6878
Texas License #A10803

 

© 2018 Sage Investigations. All rights reserved.