Our firm was asked to review and evaluate the case as built by the criminal investigator. Due to the
amount being claimed, the defendant
was facing mandatory incarceration as
governed by state statute.
Opinion: Flawed Analysis by
After reviewing copious amounts of
documentation, our opinion was that
the investigator’s analysis was flawed,
misleading, and ignored exculpatory
evidence without providing any justification. Based on our independent
analysis, we determined the amounts
that should be considered by the trier
of fact were significantly less than the
amount alleged by the investigator,
and ultimately less than the statutory
level for mandatory incarceration.
Threshold of Proof
The criminal case requires that the
proofs meet a high threshold. Ultimately, the role of the defense attorney is to
convince a jury that this threshold has
not been met.
The side that prevails usually does so
because they understand how a case
should be built and presented. Often, the
success of the case relies on the methodology employed by the criminal investigator, or fails based on the lack thereof.
Determining the amount involved in
an alleged financial crime can be complicated and time consuming. These types
of cases are often built on circumstantial
evidence involving multiple financial
How a defense attorney utilizes financial forensics in a criminal case
of alleged embezzlement involving forged checks made payable to
Financial Crimes: Defending Allegations
of Forgery & Embezzlement
DAVID SUTHERLAND, CPA/CFF, CFE, CLEA
EPPS FORENSIC CONSULTING PLLC
Dave specializes in financial investigations, forensic accounting, litigation
support, fraud examination, and law enforcement consulting services.
He also teaches Financial Forensics in Law Enforcement (FFLE®).
13880 N. Northsight Blvd., Suite 115, Scottsdale, AZ 85260
transactions. How effective the investigator is at building the case may depend
on the extent of their training in financial forensics. Unfortunately, many investigators have little or no training in
financial forensics. This may result in the
investigator developing a case without
an adequate foundation.
Under ideal conditions, the financial
forensic investigation includes three basic elements, which are as follows:
1) obtaining evidence,
2) analyzing evidence, and
3) presentation of findings.
Understanding Financial Documents
and Financial Theory
It is critical for the investigator to first
obtain relevant information and documentation. This requires an understanding of both financial documents and financial theory. It is the rare case where
every relevant document is produced.
Therefore, the investigator must be adept at understanding the impact of missing documents, and methods that can be
used to work around missing documents
where possible. If the investigator cannot demonstrate that they knew what
the relevant documents were and made
an attempt to obtain them, the case is
Analysis of Evidence
Once all of the available documents
have been produced, the analysis is performed. In most cases, there is some belief as to the nature of the alleged crime.
The analysis in such cases is therefore
geared to determine
1) if a crime did occur,
2) the magnitude of the crime, and
3) to identify the perpetrator(s).
Often the method used by the investigator is dictated by the nature of the alleged crime and the nature of available
documents. An experienced investigator may consider various methods before arriving at the most supportable
method. At that point, the investigator
must make an informed decision of
whether or not there is sufficient evidence to arrive at any supportable conclusions.
Presenting the Conclusion
When the analysis is complete and a
conclusion is reached, the evidence
must be presented in such a way that
people with limited financial knowledge
can understand what happened. The
most sophisticated analysis will fail if it
cannot effectively be explained to the
relevant parties. The relevant parties in
financial crimes cases are the prosecutor, the defense attorney and, ultimately,
the trier of fact.
The key point to glean from this case
study is that criminal investigators, with
the most honest of intentions, can arrive
at erroneous conclusions due to their
lack of technical knowledge of accounting issues. A financial forensic expert can
identify such errors and, if necessary,
testify in the trial for the defense.