How does Forensic Accounting works in Fraudulent Transfer Claims?

How does Forensic Accounting works in Fraudulent Transfer Claims?

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How does Forensic Accounting works in Fraudulent Transfer Claims?

 

The mix of corporate and bankruptcy litigation often includes forensic accounting for fraudulent transfer claims, the essentially business dispute claim at the heart of almost all bankruptcies. When one party in business or in bankruptcy claims that a transfer of funds – debt, a property or even a business – is fraudulent, the transaction is not valid. The claim may be that a corporate insider, such as an officer or director, improperly removed money from the company balance sheet. Or, a debtor or defendant in a business dispute argues that payment of money was improper, given the circumstances or the timing. Engel & Engel has senior-level CPAs (Certified Public Accountants) skilled in fraudulent transfer claims.

 

Understanding Fraudulent Transfers

 

Fraudulent transfers occur when a person moves or hides assets to avoid paying their debts or to deliberately mislead a creditor. These circumstances require the analysis of fraudulent transfers that include an insolvent company (or a company at risk of being insolvent,) as well as situations where a person hopes to undetectably hide assets from legal claims. Identification and proof of fraudulent transfers are inherently complex legal processes requiring a high level of understanding of the nuances of finance and law.

 

The Expertise of Engel & Engel

 

The skills needed to win fraudulent transfer cases are on full display in Engel & Engel, whose expert testimony help in complex business and bankruptcy matters. They’ve honed their skills across a wide range of courts, from state and local jurisdictions through the US federal system to other US jurisdictions and foreign courts.

 

  • Accreditation in Business Valuation (ABV): Ability to appraise business assets such as shares, lines of code or recipes – a critical qualification if a transfer was a sham, not a real sale.
  • Master Analyst in Financial Forensics (MAFF): Specializing in financial forensics, this professional can examine complicated financial transactions to expose fraudulent activity.
  • CFEs, Certified Fraud Examiners: As members of the Association of Certified Fraud Examiners, Engel & Engel professionals have trained to identify and investigate fraud, including using a variety of methods to trace fraudulent transfers.

 

Research and Publications

Engel & Engel’s academic writing on fraudulent transfers is sui generis as well. Engel & Engel have published four academic pieces on the subject, showing awareness of new developments in fraudulent transfers and keeping current with new developments in the law. Engel & Engel’s mastery of contemporary thinking in fraudulent transfers is also to be commended.

 

Forensic Analysis in Fraudulent Transfer Cases

The process of analyzing fraudulent transfers involves several critical steps, including:

  1. Transaction Scrutiny: This is where our forensic accountants identify the patterns and outliers in financial records and transactions that suggest that fraud has occurred. They may trace assets and check the timing and character of transfers, to name just a few.

 

  1. Valuation of Assets: It is crucial to establish the proper business value for assets transferred in an effort to understate their value. Was the transfer done at a fair value? Or was it an attempt to understate value to decrease liability to creditors?

 

  1. Legal Analysis: Findings from forensic analysts fit within legal and statutory frameworks, as the analyst is not addressing the legal analysis directly but needs to be aware of the key premises. The key for the forensic economist is understanding the relevant statute and case law for fraudulent transfers.

 

  1. Expert Witness Testimony: Getting the chance to go to Court to be an expert witness and present your findings in a way that may not be easily understood if not explained in the right way. Credentials and experience can go a long way to making the findings understandable to a Judge or Jury thus clarifying the complex financial matters involved.

 

In fraudulent transfer cases, forensic accountants are needed to discern the allegedly fraudulent transfers. Engel & Engel are not only qualified to do this (they have multiple credentials, including CIRA, ABV, MAFF and CFE, as well as published academic materials), they also insist on holding themselves to the strict standards of the profession and, with their depth of forensic analysis, they ensure their finding of fraudulent transfers are defensible and reliable. Representing plaintiffs and defendants, Engel ˗ Engel’s expertise and services make them vital for litigators to use in depositions and trials.