President Trump single-handedly will make forensic accountants sexy

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Recently, the Washington Post reported that New York Attorney Cyrus Vance Jr., the Manhattan District Attorney, had hired a forensic accounting firm to help with the criminal investigation, which first started in 2018, on former US President Donald Trump. Mr. Trump’s real estate transactions are at issue; two discreet payments to women with whom he allegedly had extramarital affairs; and allegations of bank, tax and insurance fraud.

Read that last sentence again.

This is the (former) President of the United States we are talking about! The very fact that we have reasonable grounds to investigate a president is patently shocking and shameful.

This investigation is more like a big screenplay by Aaron Sorkin, produced by Jerry Bruckheimer, for a must-see movie or TV series. As a tax lawyer and accountant, I volunteer to help with the research and intricacies of offshore accounts, black money and the difference between (legal) tax evasion and (illegal) tax evasion.

Maybe Sorkin or Bruckeimer will do what TV shows like “NCIS” (now in its 18th season on CBS) and “Criminal Minds” (now in its 15th season on CBS) have done for forensic examiners – make them. sexy forensic accountants.

Or maybe the “witch hunt” depends on which side of the clearly divided political line you stand on. The use of forensic accountants should definitively settle this question.

In many ways, forensic accounting is akin to one of the main tenets of investigative journalism: Follow the money. But more than that, forensic accounting is broken and dirty – and respondent With money.

Accountants and bookkeepers are responsible for recording transactions in the books of a business. Auditors verify that these books are correct. Audits by regular auditors are usually carried out on behalf of public enterprises or on behalf of banks that wish to audit the books of their borrowers.

Tax auditors are employed by tax authorities such as the Internal Revenue Service in the United States, the Canada Revenue Agency or Inland Revenue in the United Kingdom to ensure that there are no tissues in the books that would deprive the government of tax revenue. .

The rarest breed is that of forensic accountants. The new sexy is methodical.

For example, an accountant will show that a million dollars has been spent to pay for the services. Company auditors will verify that this amount was spent by examining the wire transfer or voided check and the bill for services.

But a forensic accountant reviews the details of the transaction and the vendor to make sure the expense was legitimate. The forensic accountant will look at the vendor’s property and can trace where that million dollars went after being paid to the vendor.

Great books may or may not lie – and sometimes they hide the truth.

My very first audit engagement was with a client in the shmata (confection) in Montreal. I was responsible for reviewing the credit scores. A client from Jamaica had consistently high credit scores. As it turned out, the client was overcharged and received credit notes in order to evade Jamaican currency controls. The client traveled to Montreal several times a year and received the balance of the credit note in cash.

These are called “hosting bills” and can be as simple as this example, or slightly more sophisticated, with a dummy company set up that charges for non-existent services.

The American International Group fraud that took place from December 2000 to March 2001 was a hosting bill fraud where AIG entered into a series of fraudulent transactions with Gen Re Corporation in order to create a bogus reinsurance policy to increase l ’emergence of reserves for losses on the balance of AIG. leaf.

The reverse of this strategy is commonly used to pay bribes to government officials. A supplier, domestic or foreign, will outbid and overcharge, then pay bribes, into an offshore bank account, to a government facilitator. This happened, for example, with Odebrecht from Brazil, who is still involved in multiple corruption cases.

For forensic accountants, it might be time for a makeover. And remember, forensic accountants brought down Al Capone on tax evasion.

With this much-publicized investigation of Mr. Trump, I think designers Tom Ford and Hugo Boss would be seriously interested if a TV series premiered. And there are plenty of production talent working for all streaming services to make it worth it.

Popcorn, anyone?

David J Rotfleisch, CPA, CA, JD, is the founding tax lawyer of Rotfleisch & Samulovitch PC, a Toronto-based tax law firm. He appears regularly in print, radio and television. With over 30 years of experience as a lawyer and chartered professional accountant, he has assisted start-ups, resident and non-resident business owners and corporations with their tax planning, with will and estate planning. , voluntary disclosures and the resolution of tax disputes, including tax litigation before the Tax Court and the Federal Court. Visit www.Taxpage.com and email David at [email protected]

Photo (left) by Capturing the human heart. on Unsplash. Photo (right) courtesy of David J Rotfleisch.



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