12 BWD | Fall/Winter 2018-2019
By Bill Kowlaksi, JD
Notes from a fraud investigation
Bill Kowalski, director of Rehmann’s Corporate Investigative Services division and former FBI special agent,
investigates fraud and embezzlement cases for private and governmental clients.
o a
:20 p.m.
we could d
to
4.20.18 – 3
nt asking if
lie
c
st wanted
u
m
“j
o
e
fr
h
ll
a
— said
r
e
p
e
Received c
e
k
k
o
ng.
d on his bo
thing is wro
backgroun
’t think any
cords for
sn
e
re
o
d
rs
—
”
cess cove
ro
p
make sure
and
d
n
u
ro
associates
our backg
ptcy, liens,
ru
k
Explained
sked
n
a
a
b
e
H
y,
.
red flags
il, propert
iv
le
c
ib
l,
a
ss
in
o
p
m
cri
king for
morning.
BAs — loo
e following
th
e
relatives, D
ic
ff
o
y
meet at m
if we could
ldn’t call
id they cou
0 a.m.
a
:3
S
9
r.
–
e
n
18
rt
1.
a
4.2
rhear
ness p
r would ove
e
d with busi
p
e
e
iv
e
k
rr
k
a
o
t
o
n
Clie
use the b
office beca
from their
ink she
ation.
nd don’t th
a
n
the convers
o
rs
e
p
l
wonderfu
ed she is a
They insist
d.
ir
g really ba
prompt the
did anythin
recently to
d
e
g
n
a
h
c
d
nything ha
I asked if a
.
s
n
they
io
ic
sp
5 years —
call and su
ether for 2
g
to
les
ss
sa
e
n
—
si
well
been in bu
doing very
re
a
ed
d
rr
n
They have
u
a
c
n
c
io
cidents o
the recess
rs some in
a
ye
weathered
w
fe
t in the last
way up. Bu
seem right.
s
that didn’t
duction wa
t in new pro
n
e
not
m
w
st
o
h
ve
e
e in
ere som
w
s
d
n
2015. A larg
fu
se
lained she
yed becau
keeper exp
k
o
o
b
almost dela
e
h
T
.
and hadn’t
ly available
e purchase
th
r
immediate
fo
g
in
ed at
lculated tim
rtner is skill
ht.
had misca
Neither pa
t.
be that tig
ye
s
ld
d
u
n
o
fu
funds sh
k
in
transferred
th
’t
n
id
but they d
0K .
financials,
ly about $5
n
o
per
s
a
w
se
a
h
e bookkee
rc
u
p
The
round on th
g
k
c
om
a
fr
b
e
a
c
e
referen
ey had don
hey had a
T
.
d
ve
e
I asked if th
ti
a
rk
g
o
e
w
N
since
was hired.
o. She had
g
a
g
when she
n
lo
y
n
.
the compa
purchasing
a friend in
P, payroll,
A
h
g
u
ro
th
cials.
her way up
h the finan
worked wit
e
ls
e
e
n
nyo
ooks. Then
I asked if a
kept the b
e
if
w
e
”
’s
“A
ner
— everyon
inning, ow
r part-time
e
p
e
e
k
In the beg
k
e
o
if
o
t b
go, w
the curren
ive years a
they hired
d quickly. F
e
rn
a
med all
u
le
ss
e
a
nd sh
ew one
n
e
th
liked her a
d
n
a
ns
xpenses,
dical reaso
banking, e
,
g
in
p
left for me
e
e
k
k
verything.
ties — boo
dernized e
o
m
responsibili
…
g
n
s, purchasi
payroll, taxe
I asked if there
is any oversight
of financials.
Owners said th
ey used to do a
little but didn’t ha
and she had it un
ve time
der control. Bo
okkeeper like fa
pitches in — po
mily —
sitive — knows
everyone — birth
Cookies.
days …
February 2018.
Rush project on
a weekend; need
unique part and
ed a
called their supp
lier. The supplie
worked with them
r
had
for years and w
as on friendly te
But he was very
rms.
upset on the ca
ll and demande
up front. Very aw
d cash
kward. They aske
d why — he said
they owed six m
onths back invo
ices — $70K —
wouldn’t float th
and he
em any longer.
They were shoc
ked.
They opened bo
okkeeper ’s desk
for checkbook.
Underneath the
checkbook, face
down, found a co
check for cash
mpany
made out to the
bookkeeper pe
The date and do
rsonally.
llar amount wer
e blank. They di
what to do.
dn’t know
I asked if two sig
natures were re
quired on checks
“most of the tim
. Said
e” with some ex
ceptions like va
travel — then th
cation/
ey sign some bl
ank checks in ad
vance.
I asked if this w
as one of those
checks — affirm
ative.
I asked if they re
view checking ac
count statemen
sometimes but
ts —
mostly not.
I suggested we
do background
plus preliminary
accounting — lo
forensic
ok at books/reco
rds just in case
something is am
iss.
They agreed – sa
id review must
be done on wee
bookkeeper is no
kend so
t aware.
4.26.18 – 1:30 p.
m.
On site to copy
physical record
s/make forensic
ledgers and othe
image of
r digital devices
.
4.28.18 to 5.13.18
Forensic accoun
ting/records re
view/backgroun
intelligence gath
d
ered.