Investigation

image42

Fox Forensic Accounting also provides forensic investigations on financial restatements and financial reporting fraud, asset misappropriation, regulatory investigations, assessing fraud risk, internal corporate investigations, employee conduct, whistle-blower, license and royalty rate compliance, construction cost overrun matters, related party transactions, and allocation of costs.


The members of Fox Forensic Accounting have significant experience in preparing written investigative reports and oral presentations summarizing work performed and findings to company fiduciaries and regulators. 

Shawn Fox’s Forensic Investigation Case Experience

Asset Misappropriation – Financial Fraud

Shawn has led numerous corporate and government entity investigations related to occupational fraud and asset misappropriation, including:


·  Theft, embezzlement, skimming, and cash larceny

·  Disbursement fraud

·  Vendor fraud

·  Payroll fraud

·  Expense reimbursements

·  Credit card

·  Misuse and larceny of an organization’s assets

·  Additions to the organization’s liabilities

·  Billing schemes


Shawn led a forensic investigation for outside counsel representing hundreds of investors involved with a multi-million-dollar fraud scheme related to fraudulent real estate deals. The company founder promised exceptional returns for investors who put money into his plans to buy and sell homes to the poor at a profit. He was accused of operating a classic Ponzi (or pyramid) scheme, using money from new investors to pay earlier investors without selling the properties. Shawn regularly testified as the court appointed Receiver, which including preparing analysis of real estate and other assets owned by the company founder and his businesses.

image43
image44

Financial Statement Misrepresentations

Shawn has led numerous financial statement misrepresentation investigations related to:


·  Revenue recognition schemes

·  Expense accruals

·  Asset inflation – improper capitalization of assets

·  Reserves and allowances

·  Improper classifications of financial statements (income statement and balance sheet)

·  Unreported and/or concealed liabilities

·  Improper asset valuations – fair value or net realizable value

·  Improper disclosures

·  Timing differences and subsequent events

·  Related party transactions

·  Misrepresentations in the notes to the company’s financial statements

·  Overstatement of earnings measurements in purchase price disputes

Banks and Credit Unions

Shawn has led numerous investigations for banks and credits unions. These projects were primarily regulatory investigations required by the Federal Deposition Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC), and Credit Union. and National Credit Union Administration (NCUA).  Some of the key issues in these cases included:


·  Investigate allegations of loan fraud by customers

· Investigate lending practices, loan losses, and non-performing assets 

·  Investigate alleged misrepresentations to the federal government

·  Investigate financial transactions

·  Investigate transactions involving related party transactions and self-dealing

·  Investigate alleged fiduciary fraud

image45
image46

Hedge Fund

This forensic investigation involved allegations of valuations of municipal auction rate securities held in the portfolio of the fund and resulting payments of management and performance fees based on these overstated valuations. The manager of the hedge fund earned its fees based on assets under management.


·  The valuations of the municipal auction rate securities were based on par value instead of fair value. 

·  Instances of transactions being recorded in the wrong time period were discovered. 

·  This project also included restating the hedge fund’s financial statements and unit prices used for redemptions from the date of the fund’s inception.