Famous U.S. Legal Scams Solved By Accounting

While businesses and corporations are held to strict guidelines to make sure not a penny is lost, sometimes people get greedy and start embezzling from their own companies. Many times their tactics work effectively and they end up stealing from staff, the government, and investors, by lying or misrepresenting a company’s income, assets, expenditures and liabilities.

The good news is there are forensic accountants out there who can uncover all of these wrongdoings, hopefully before it’s too late.


Forensic Accountants to the Rescue!

Like all accountants, forensic accountants are tasked with keeping track of money. The only difference is that forensic accountants usually work with police and government agencies to help prove that fraud by the theft, hiding, or mismanagement of money has occurred.

It’s not only businesses that are investigated either. Forensic accountants are also called on during divorce proceedings when it is suspected that someone is hiding assets in order to avoid splitting them with their estranged spouse.

Forensic accountants have been involved in many high-profile cases. These cases show that forensic accountants don’t just sit on their desks all day. The best forensic accountants have a keen eye for detail, a mind ready for problem solving, and a tenacity that is a thorn in the side of any fraudster.


The Case of Ivan Boesky

Ivan Boesky was an experienced trade broker before he opened his own brokerage firm in 1975. His company, Ivan F. Boesky and Company, made its money by speculating on corporate takeovers and investing in relevant stock to take advantage of them.

In 1987, Boesky was sued for misleading partnership documents. Thanks to the paperwork reviewed by forensic accountants, as well as interviews they conducted with business executives, the U.S. Securities and Exchange Commission found that Boesky had made investments based on information given to him by business insiders, or also known as insider trading.

Boesky served three and a half years in prison after making a plea bargain. He helped put away other white collar criminals such as Michael Milken during his time in prison.


O.J. Simpson’s Hidden Millions

After a well-televised and controversial trial, O.J. Simpson was sued in civil court by the parents of Ron Goldman on the charges of wrongful debt. The victims’ families sought compensatory and punitive damages, or damages exceeding the individual’s crime to prevent others from committing it.

After a lengthy trial, the judge awarded the plaintiffs with $33.5 million. However, O.J. Simpsons contested that he was impoverished and could not afford to pay damages. In response, the plaintiff’s attorney called upon a forensic accountant to determine whether Simpson was telling the truth.

The accountant found millions in hidden assets and monies in offshore accounts. O.J. Simpson was charged for his lie, and the victims’ families got their court-ordered money.

Al Capone vs. the Forensic Accountant

Frank J. Wilson is perhaps the most famous forensic accountant in United States history. Wilson was 42 years old when he was recruited by Elmer L. Irey, head of the Treasury Department’s Special Intelligence Unit, to help bring down notorious gangster, Al Capone.

An agent working in Baltimore at the time, Frank J. Wilson had built a reputation for being an obsessive and thorough analyst and accountant. He was the perfect man to create a tax evasion case against Al Capone.

For years, Wilson and his team combed through millions of documents in an attempt to find any connection between Al Capone and his illegal and lucrative business dealings. In order to make a strong case, Wilson had to show a jury that Al Capone was spending copious amounts of money, and that the money had no defined source. Not only that, but he also had to show that money was indeed reaching Al Capone and was not being reported to the IRS.

After several dead-ends, key witnesses intimidated into silence, and even an assassination attempt, Wilson finally reached a breakthrough in the case. Wilson found three large ledgers that reported net income made from large, illegal gambling operations for three individuals referred to only as “A”, “R”, and “J.”.

On some of these pages Wilson found references to a person named “Al”. To prove it was Al Capone, Wilson tracked down and arrested one of Al Capone’s accomplices who admitted that the ledgers recorded money that went directly into Capone’s pocket. After this and with more evidence to build a strong case, Wilson and his team brought down Al Capone on 23 counts of tax evasion.

Forensic Accounting Isn’t Just Bean Counting

Forensic accountants are more than just bean counters. They help businesses and individuals ensure their money is safe and legal.

You don’t have to be rich, famous, or at the head of a massive corporation to utilize a forensic accountant. If you suspect that someone is siphoning or hiding money from you illegally then a forensic accountant like Chad Garland CPA can help you claim what is rightfully yours.

Leave a Comment