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The Most Well Known Forensic Accounting Cases

November 11th, 2013 by Andreas Xavier in Criminal records. Topics: , , , , , ,

Forensic accounting is a very important profession and the findings of these experts can really make a big difference in the verdict of a court proceeding. In fact, there are a number of famous cases in which forensic accounting played a very large role. Let’s take a look at what forensic accounting is and then some examples of this practice being employed in famous high profile court cases.

What is Forensic Accounting?

Forensic accounting is a very specific area of accountancy which deals with disputes and litigation. The term “forensic” means that the findings of this type of accounting are suitable to use in a court of law. Forensic accountants are also called forensic auditors or investigative auditors and they are responsible for giving their expert evidence within a trial.

Often a police and government agency will have a specialist have a specialist forensic accounting department and within this group, there might be accountants that specialise in specific areas of accounting such as fraud, personal injury claims or insurance claims.

An example of a case that might require a forensic accountant could be an owner of a company who thinks that his bookkeeper might be embezzling money from him, or a government employee looking to prove that a corporation has been money laundering. They might also be asked to assist in cases related to marital and family law, business valuation, bankruptcy, economic damages calculations and much more.

Famous Examples of Forensic Accounting Cases

 Most of the time, it is difficult to find examples of forensic accounting because the details of cases are usually kept private. However, there have been a few high profile cases in which forensic accounting has played a very significant role. Here are a few examples of the most well-known forensic accounting cases:

Sir. Paul McCartney and Heather Mills Divorce

When this famous couple divorced, there was a dispute over how much money the former Beatle was actually worth. He claimed to be worth approximately £400 million, however according to Heather Mills she thought he was worth a lot more – around £800 million. She hired a team of forensic accountants to investigate his assets, so that she could prove that she was correct.

However, the judge accepted that McCartney’s assets were £450 million rather than £800 million and Heather Mills was eventually awarded a lump sum of £16.5 million.

Al Capone’s Taxes

Al Capone was one of the most legendary gangsters of the 1920s and 1930s and he was able to avoid being caught by many of the best FBI agents and detectives of the day. However, the famous gangster was finally brought down by an accountant.

In 1931, a forensic accountant brought down Al Capone in 1931 by uncovering his tax evasion. The IRS tracked all of the earnings that Capone brought in from his illegal activities and then nailed him when he didn’t report them for tax purposes.

Robert Maxwell’s Embezzlement

Robert Maxwell, European publisher, had been embezzling funds from shareholders, clients and more for years when he died in 1991. As soon as he passed away, his entire company started to crumble as it was mostly built on deceit and lies and the games he had played with funding and loans. A team of forensic accountants spent 14 years figuring out the entire mess and discovered that Maxwell had embezzled approximately $1 billion.

O.J. Simpson’s Millions

After O.J. Simpson received a verdict of innocent, the families of his victims attempted to file a civil suit in order to get financial compensation. O.J. claimed that he was broke and had no money to give to the civil suit. However, forensic accountants investigated his finances and found that he was hiding away millions. The families of the victims were able to receive a $33 million settlement.

These are just a few examples of cases in which forensic accounting played a very important role. Forensic accountants are experts in investigating deep into every situation, looking where others didn’t think to look and meticulously tracking expenses, taxes and other important details. Most people would overlook these little details, but the forensic accountant knows that it’s their job to spot them. When these small details can affect the outcome of a course case and ultimately, the lives of others, they can be very important!

Mark Baker is a freelance writer and blogger. He is interested in history, literature and he loves watching old films. 

About the author
Andreas co-founded Xavier Media® in 1996 and has since been involved in all kinds of development, marketing and making money online.


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