We are Certified Fraud & Forensic Investigations (CFFI), an Indianapolis Forensic Accounting firm that has a passion for discovering hidden assets. Our company standard is to look under every stone, into every bank account and examine every document in order to provide the best service to our clients. Our goal is to provide a true and fair basis through our findings and expert testimony for the separation of assets during a divorce, child support modification or inheritance matter. Our findings are crucial when determining how assets should be divided on a fair and equitable basis. We have had several soon-to-be divorced client who have a reason to believe that their once-trusted spouse was hiding, concealing, stealing or flat-out committing fraud while married.
Recently we were engaged in a child support modification case that involved our client and former spouse we’ll call Chris. There were many moving parts in this case, which included a family-run company, business bank accounts (some provided in discovery and some not) and several personal and family commingled bank accounts. There were many challenges in this case, but in the end we were able to successfully trace, examine and document all of the provided financial statements and, in the process, discover several hidden and undisclosed personal and company bank accounts.
The family company, we’ll call Mama’s Market, had considerable revenue for three consecutive years leading up to this legal matter. This information was retrieved from the company’s tax return and reconciling to Mama’s Market’s bank accounts. From this review, it was clear that Chris had submitted to the court an understated amount of income from the proceeds of Mama’s Market. On top of this, Mama’s Market had been legally set up under another person’s name, thus removing Chris from the appearance of ownership. This was orchestrated intentionally to conceal the name of the rightful owner – Chris. Chris of course was attempting to hide income from legal counsel and the court by keeping the company in another’s name even though it was clear that the seed money to start the company was invested by Chris. We were able to locate the original investment of Mama’s Market by reviewing all of Chris’ personal bank statements.
Next, we were able to test the payroll and distributions to Chris from Mama’s Market by examining company bank statements and tracing them to Chris’s personal bank account. We were able to determine that several hundred thousand dollars of income distributions deposited directly into Chris’s personal bank account. These monies should have been recognized and reported as income not only to the court for child support calculation purposes but also to the tax authorities, which Chris failed to do.
I’ve only mentioned a few of the steps that we completed in order to successfully identify actual income that was intentionally concealed by Chris. The court and our client were relieved to learn of the actual income so that the child support calculation could be established in a fair and equitable manner.
Michael Hathaway, CFE, CAMS, P.I.
