Question

Specialized Fraud Areas

Case 2

Christina and Jose Garza are in the process of getting a divorce. Christina suspects that Jose is hiding assets to keep them from being considered in the divorce settlement. She has hired a forensic accountant, Rick Harris, to investigate the possibility of hidden assets.

Christina suspects that Jose owns a property in Mexico that he has kept secret from her. Jose has traveled to Mexico on business for years. Several months ago she received a phone call from a man in Mexico who claimed to be a property manager for a property she and Jose owned in Mexico. The man gave only his first name, Julio. Julio mentioned the location of the property, but it was not a place that was familiar to Christina. She has forgotten what it was. When Julio realized that Christina knew nothing about the property, he hung up.

Christina’s divorce attorney deposed Jose and asked detailed questions about the property in Mexico and the property manager, but Jose denied knowing anything about them.

During their marriage of 25 years, Jose has had high-level jobs with a multi-national corporation. Christina knew he made a lot of money, but she never knew exactly how much or about any details of the family’s finances. Now she feels unprepared to negotiate in the divorce proceedings because she knows so little about the important financial information.

Write responses to the following:

1) Explain how the forensic accountant should proceed with his investigation for Christina.

2) If Jose owns a property in Mexico that he has kept secret, what do you think is the probability that the forensic accountant can discover it?

Answer 1

Forensic accountant may proceed in the following manner :-

1. First of all Jose was in a highly paid job in a multi national corporation, in such a case detailed analysis of bank statement of Jose can reveal if he has made any purchasing of asset or where he has expanded his money.

2 .secondly, Christina received a call from the property broker from Mexico, the phone number would be in her phone call history or even if it is not in her phone call history due to passage of time, they can obtain it from Telecom company, in such a case they ccan call back to the property broker and can find out whether there is any property registered in her or her husband's name. Property broker will not sent to tell her because the property is registered in the name of both of them as mentioned above in the question.

3. Further they can also enquire about any such property from the local registrar of property in Mexico since the property is registered in both of their name thus he will not sent to reveal about any such property.

4. If presently Jones and Christina are living in the same house then they can search availability of any property ownership document in the cubbard or any such hidden place.

Finding any hidden asset by forensic accounting or auditing cannot be guaranteed. A forensic accountant can only make his best efforts to find out details about any such property by adopting standards on procedure.

It also depends upon the facts of the case, prevailing or underlying situation and the level of the parties involved. For instance if the party of whom assets are to be find out is a high level influentual person then he would be having good connections and had already made proper arrangements so that his assets cannot be revealed.

This, by adopting even the standard procedures finding out the hidden asset cannot be guaranteed.