Hemming Morse’s white collar crime experts regularly conduct forensic consulting and fraud investigation services in the areas of embezzlement and corporate fraud – both internal and external. Our clients benefit from the investigative expertise of a staff of seasoned professionals, including Certified Public Accountants (CPAs), Certified Fraud Examiners (CFEs) and a former Special Agent with the Federal Bureau of Investigation (FBI).
Our professionals possess the necessary skills and experience to conduct investigations of accounting and business records utilizing statistics and electronic data, as well as to report findings, consult with counsel, and testify in both civil and criminal proceedings.
Investigation of Securities Fraud
Hemming Morse was retained by the SEC to investigate a multi-million-dollar securities fraud scheme against a large wireless company and several of its officers. The investigation involved analysis of the ownership of millions of shares of company stock used for sales to outside investors, including analyses of the sources and uses of funds in dozens of bank and brokerage accounts, totaling over 40,000 transactions. The investigation evaluated whether the company’s former chief financial officers sold shares and identified the process used to complete the transactions.
Investor Fraud Investigation
Hemming Morse was engaged to conduct an investigation into the utilization and disposition of $100 million of investor funds. The general partner formed two private equity funds each raising approximately $50 million from numerous investors throughout the U.S. Of the $100 million raised, to date only $5 million has been returned to the investors. The investigation determined that the general partner entered into numerous self-dealing transactions with the investor funds to the detriment of investors, including allocating successful transactions to himself, while assigning unsuccessful transactions to the funds, including unpaid liabilities and losses.
Bank Fraud Investigation
Hemming Morse was engaged to conduct an investigation into a loan transaction in which the bank suffered a loss of more than $9 million. An apparel company obtained a $9 million revolving line of credit from the bank. This loan facility required the monthly submission of Borrowing Base Certificates (“BBCs”). The borrower was required to certify each month on the BBC the value of its inventory and accounts receivable, along with other financial information. After several years and the drawdown of the entire $9 million available line of credit, the borrower defaulted on the loan with loan balance remaining unpaid. Efforts by the bank to foreclose on the collateral were unsuccessful. Hemming Morse’s investigation found that the inventory value was materially overstated, the real property that secured the loan had been transferred to a family member, and the accounts receivable balances were fictitious.
