Doug Betts, CFE, CPA, Inc.

Certified Fraud Examiner

Certified Public Accountant

Family Law Services

 

Divorce, unfortunately, is an all too common occurrence. Often a highly sensitive and emotionally

charged process, it can be an extremely difficult time for couples. Because of the nature of a divorce,

it is not uncommon for one spouse or another to be taken advantage of by their partner by

hiding assets and/or income from the courts in attempt to fraudulently keep assets or lower

future spousal or child support payments. 

 

When do you Need a Fraud Examination in a Divorce Case?

Just like a forensic medical examiner looks for clues to the cause of an individual's death and clues

that would identify criminals, a Certified Fraud Examiner performs an investigation to look for

evidence of hidden or undisclosed assets and income, and assists in determining the ownership

of marital assets. The goal of these investigations is to present a true picture of the family's

financial situation to the family court so that an equitable resolution can be achieved for all involved.

 

Often one spouse will own or control a closely-held business (the "owning spouse") of which the

opposing spouse has little or no involvement or knowledge. This situation is a perfect opportunity

for the owning spouse to use the business as a vehicle to hide income or assets from the courts.

If a valuation is to be done of the business as a part of the divorce, it may be necessary to

perform a forensic examination of the business prior to the valuation. A valuation performed with

misstated information is itself  misstated. A fair picture of the business' value is necessary to

insure an equitable settlement.   

 

Weigh the Costs and Benefits of a Fraud Examination

The emotions of divorcing couples often outweigh the potential value of what they are fighting

over. It is very important to initially determine what a divorcing spouse stands to gain by having

their spouse investigated and whether the potential gains in asset division and future support

outweigh the costs of the investigation. Generally, one should not have a fraud exam performed

unless one:

a) has reasonable suspicion that assets or income is being hidden;

b) one spouse has significant control over the management of a business or is a highly

    compensated wage earner with access and influence to potential business perks such as

    deferred compensation and/or income in a non-business situation such as real estate,

    hidden bank or brokerage accounts;

c) a valuation of a business is required where the reported business financial information

    is questionable;

d) the benefits likely to be achieved will be greater than the cost of a fraud examination.

 

Fraud Examination Services in Family Law

Fraud examination services can include any of the following:

  • Detailed analysis of personal lifestyles, spending patterns and cash flows

  • Investigate allegations of unreported income and hidden assets

  • Locate diverted funds or assets of the opposing spouse

  • Evaluation of  business owner's true compensation

  • Evaluation of assets and available income streams

  • Analyze monthly operating reports for for issues that warrant further investigation

  • Forensic examinations of closely-held businesses

  • Analyze questionable accounting practices of closely-held businesses

  • Provide expert analysis to support or refute filed legal motions

  • Provide expert testimony in court proceedings

 

Contact us today to determine if a fraud examination or computer forensics is appropriate for your

particular family law case.

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Fraud and Divorce
Divorce actions with small business owners and high net worth individuals are often marked by suspicious or unusual transactions. Certified Fraud Examiners are trained to "follow the money" and present a true financial picture to the courts and help achieve an equitable settlement for the disadvantaged spouse.

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