Forensic Accounting - Our Cases

  • Anton Piller orders and Mareva injunctions

    These are two of the most significant civil remedies available in cases where there is wrongdoing that has caused financial losses.  An Anton Piller order grants the the right to search a suspect’s premises and seize evidence without prior notice, while a Mareva injunction freezes their assets. Neither is granted lightly and it is vital to have the supporting information in place and properly documented before applying to the court.

    Our team has considerable experience in preparing affidavits that outline financial findings in support of applications for Anton Piller orders and Mareva injunctions, as well as in executing orders and injunctions in the field. 

    Case Examples

    • Dummy Invoices
      A large publicly traded corporation retained us to investigate a possible procurement scheme after it became suspicious that one of its department managers was colluding with vendors to inflate invoices and create dummy bills. We uncovered the preliminary financial facts without tipping off the departmental manager or the vendors and giving them the opportunity to destroy evidence. Our findings formed the basis to apply for an Anton Piller order and a Mareva injunction. Both were granted by the court and searches were executed at dozens of banks, corporate offices, residences and safety deposit boxes.
    • Unauthorized Trades
      In this case we were hired by overseas clients to look into suspicions an investment manager was making unauthorized trades and improperly withdrawing funds from their accounts. We established and documented the preliminary facts, which were used to apply for an Anton Piller order and Mareva injunction. The court granted the applications and surprise raids were executed at multiple banks, safety deposit boxes, and residences.
    • Cash Theft
      We were called in to this cash-management case by a large private company that believed an accounting manager was stealing cash but was unsure as to how the theft was being covered up. We conducted a preliminary investigation, being careful not to alert the manager to suspicions. Our findings were persuasive for the court to issue a Mareva injunction as well as an Anton Piller order, which were executed at multiple banks and safety deposit boxes as well as a private home.
  • Fraud investigations (management and employees)

    A corporate fraud investigation is never a simple matter. With the potential for reputational damage and loss of value, internal inquiries into suspected wrongdoing by management or employees must be careful and discreet. Forensic investigators may be required to collect information on a variety of stakeholders ranging from senior managers, legal, accounting, HR and IT professionals to fellow employees, customers, vendors and shareholders. Our team has helped successfully quarterback many such investigations.

    Case Examples

    • Kickback Scheme
      This was a property-management case involving a $3 million overbilling and kickback scheme carried out by the purchasing manager of a large public company and colluding vendors. We we were retained to prepare an expert report, which was used as the basis for a fidelity insurance claim and an agreed statement of facts in criminal fraud proceedings.  The purchasing manager and vendors pleaded guilty to the fraud and for the amounts set out in our reports.
    • Inflated Costs
      CHS was retained by an insurance company to review potential losses for a claim filed under a fidelity policy. The policyholder, a transportation company, had discovered one if its US procurement managers was accessing the company’s server records to change orders and inflate costs, splitting the profits with the service providers involved. We analyzed the company’s Proof of Loss claim, conducted several interviews, and provided the insurer with a preliminary range of possible losses.  Our work helped the parties settle the matter.
    • Manager Fraud

      This case involved an accounting manager who was suspected of misappropriating $2 million in cash receipts. We were asked to prepare an expert report, which was used as the basis for both a fidelity insurance claim and an agreed statement of facts in criminal fraud proceedings. The perpetrator pleaded guilty to the fraud scheme and for the amounts outlined in our report.

  • Fraud investigations (vendors, advisors and other external parties)

    Fraud committed by a vendor, agent, advisor or other outside party can involve overbilling, price fixing, kickbacks or rigged valuations, which undercuts the company’s profitability. The investigation starts with examining the scope of the fraud and determining whether the suspect acted alone or in collusion with someone on the inside. The forensic team must discreetly consider all the potential participants and then define and track suspicious funds or transactions, sometimes going back decades.

    We have extensive experience in conducting expert forensic investigations into suspected wrongdoing by outside parties.

    Case Examples

    • Policies Inflated
      A large insurer turned to CHS when it suspected one of its agents was working with others to inflate insurance policy values and make improper withdrawals. Our forensic accountants traced 20,000 deposits and withdrawals through various records over a 17-year period. We prepared an expert report and testified at trial. The judge found for the company based on the findings of our report.
    • Questionable Deals
      CHS was retained to investigate an oil explorer and producer suspected of accounting improprieties and carrying out non-arm’s length transactions and transactions oppressive to its own minority shareholders.  A team of CHS investigators travelled to certain Caribbean countries to review documents and interview key individuals.  Our forensic accounting report was entered into evidence at the trial and was accepted without restriction by all parties involved.
    • Misappropriated Funds
      An investment bank called on our professionals after becoming concerned about the actions of one of its investment advisors. The forensic investigation required combing through every one of the adviser’s many client accounts to identify potentially questionable transactions. We ultimately identified several clients who had suffered a misappropriation of funds, which helped them recover their losses.  Our report was also used to support the brokerage’s Proof of Loss claim with its insurer and as the basis to bring charges against the rogue investment adviser, which led to criminal conviction.
    • Unauthorized Trades
      We were called in to trace the actions of an investment broker who had been making unauthorized trades and withdrawals on client accounts. Our forensic specialists traced more than $60 million of investors’ funds through 50 investment and bank accounts. The complex findings were presented at trial, and judgment was granted adopting the findings of our report.
  • Government Inquiries

    Government Inquiries and Royal Commissions are struck when allegations of wrongdoing are very serious. The issues can be wide-ranging, from assertions of corruption involving government employees or public officials to tracing the source of a public health problem. With the investigation and results often in the media, this is highly sensitive work requiring the utmost discretion and expertise.

    We have experience as expert forensic accountants in several high-profile government inquiries. 

    Case Examples

    • Gomery Commission
      CHS professionals were members of the investigative team for the Commission of Inquiry into the Sponsorship Program and Advertising Activities, struck to look into allegations of corruption within the Canadian government. The investigations centered on the actions of senior public officials and the flow of sponsorship and advertising funds between the government and certain recipients.
    • Listeriosis Investigation
      CHS professionals were members of the investigative team asked to look into an outbreak of Listeriosis that cost 22 Canadians their lives and left another 35 people gravely ill. Retained by the lead investigator, we helped gather and sift through over six million pages of data from various sources to define the parties, actions and chronology of events that led to the outbreak.
    • Oliphant Inquiry

      The Oliphant Inquiry Commission was struck to look into financial dealings between German-Canadian businessman and lobbyist Karlheinz Schreiber and former prime minister Brian Mulroney after he left office. CHS professionals were members of the investigative team providing forensic accounting support to help determine the flow and chronology of financial facts.

  • Special committee and regulatory investigations, financial statement irregularities

    These complex and high-profile investigations often involve issues that go to the heart of a corporation’s business and reputation.  These mission-critical investigations require broad and disciplined investigative capabilities while shareholders, debt holders, regulators and the media are among those closely tracking the results.

    Case Examples

    • Accounting Questioned
      When a large publicly traded company was accused of improprieties in its financial reporting, counsel to the special board committee investigating the matter needed investigative assistance. The allegations focused on the accounting treatment of certain expenses and the possible inadequate disclosure of related-party transactions. We were members of the investigative team that identified and analyzed the questionable transactions and accounting entries. The team reported its findings to the special committee, helping them deal with the various regulatory and enforcement agencies in Canada and the US.
    • Overstated Earnings
      Our professionals were retained to investigate allegations of fraud and financial statement misrepresentation involving a $100 million acquisition in the transportation sector. It was determined that the company had overstated its reported earnings over a number of years, and had successfully managed to conceal it from the external auditors and a due-diligence review despite a number of red flags. Our professionals reported on the facts underlying the financial statement fraud and the economic loss that resulted.  We helped legal counsel and the client reach a settlement with the various parties involved.
    • Funds Diverted
      This case involved the alleged theft of mortgage funds from a lawyer’s trust account. We were called in to investigate the accuracy of recorded accounting entries and trace the flow of funds.  Our investigation confirmed that the money had been misappropriated and we also put a figure on the amount that was wrongfully diverted. Our findings were used in successful settlement negotiations with clients whose funds had gone missing.

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Cohen Hamilton Steger & Co. Inc.

www.cohenhamiltonsteger.com

First Canadian Place, Suite 7011
100 King Street West, P.O. Box 11
Toronto, ON M5X 1A9

tel: 416 304 1595
fax: 416 304 7025

343 Preston Street
11th Floor
Ottawa, ON K1S 1N4

tel: 343 291 1095
fax: 416 304 7025