June 2018
In This Issue


We are grateful to have the opportunity to provide you 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 15 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 who the embezzlers are.

We want to write about topics that will assist you in prevailing with criminal IRS 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.  
Edmond J. Martin
Principal, Chief Investigator
Certified Fraud Examiner (CFE)
Texas Certified Investigator (TCI)
Who are Embezzlers?

Experience has shown that embezzlers are opportunists that find weaknesses in systems and exploit them. The Association of Certified Fraud Examiners issued their 2018 Report to the Nation a Global Study [1] . The study shows that employees commit the largest percentage of the occupational fraud for a lower dollar amount but the owner/executive level commit a smaller percentage for an extremely large dollar amount. The study also shows that as tenure in an organization increases the likelihood of a larger dollar amount embezzled increases greatly and there is a tendency for collusion with others to occur. Occupational fraud by departments showed that the largest risk of loss was in Executive / upper management, followed by accounting, then sales & operations. The greater majority of the fraudsters were male and caused larger losses than females. The age of the fraudster rises as the age and amount of the fraud increased, with the largest loss in the 56 to older age bracket. Again, the educational level tends to increase the risk of loss, with a college degree being the largest category. The study shows 85% of occupational frauds have not been prosecuted and instead 46% of the fraudsters were allowed to resign, or enter into a confidential private settlement agreement.

With this general information, it is imperative the business owners pay attention to who they are hiring and what is happening in their lives as they work for the company. The following are the main red flags that should be observed:
  1. Living above their means
  2. Financial difficulties
  3. Unusually close association with vendors or customers
  4. Control Issues, unwillingness to share duties
  5. Divorce or family problems
  6. Wheeler-dealer attitude.
  7. Irritability, suspiciousness, or defensiveness
Investigations conducted in the past revealed the following:
  1. A female controller in a financial institution compromised the Chief Financial Officer (CFO) with sex which allowed her to avoid internal controls and embezzle $600,000 via the use of multiple corporate credit cards. She was living above her means by driving vehicles and wearing clothing that were above her means. She was terminated and not prosecuted and the CFO was terminated and forfeited his partnership interest.
  2. A male CFO was having financial difficulties and thought he was underpaid by the charitable organization so he devised a scheme to create a fictitious vendor and bank account he controlled. After three months passed he started personally issuing checks to the vendor and not by having checks prepared by the accounts payable clerk. Finally, the accounts payable clerk brought the periodic check to the Controller's attention. The QuickBooks Enterprise system identified the missing checks and the investigation begun and the scheme unfolded. The CFO was terminated and ultimately prosecuted by the county.
  3. Former fraternity brothers extracted $10,000,000 from a technology company by... Read More

a[1] Report to the Nations - 2018 Global Study on Occupational Fraud & Abuse
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 the IRS, and other complex (forensic) financial fraud investigations both civil and criminal. 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 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

Email: info@SageInvestigations.com


Texas License #A10803



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