Analyzing Mitch's Case

It is my belief that one of the employees is removing the cash from the register. All of the three individuals have the pressure, the opportunity and the rationalization. However, I agree with Lourdes Lora about Mitch demonstrating the greatest opportunity to commit fraud. Nowadays, divorces can be extremely stressful and costly. Mitch is an individual who already has his wages garnished by a court order. Why? We are missing substantial facts. Therefore, as a Fraud Examiner I would suggest to:

1) Interview Mitch, Crystal and John and gather additional facts.
2) In Mitch’s case.
a) Request for court records. Review his F/A (Financial Affidavit) and FJ (Final Judgment) or MAS (Marriage Settlement Agreement).
b) What does his ex-wife make?
Request copies of her F/A.
c) If his ex-wife makes about $24,000 per year, she can easily receive more than $945.00 per month per child.
2 kids 1500 – 2000.
d) Investigate how much child support obligation is.
e) Was Mitch ordered to pay alimony?
f) Review the timesharing parenting plan. Who lives the majority of the time with the children? Who is head of household?
g) Requests for any financial evidence from his divorce hearing (bank statements & credit card statements).
h) Does he owe any monies to his divorce lawyer and what is the method of payment?
i) Does he use his checking account to pay his bills, including credit card bills or does he use cash to pay them?
j) Compare cash and check deposits reflected on bank statements. Total YTD deposits, and determine if the total matches with his net income reported on his YTD payroll stubs.
k) What is the monthly payment for mortgage and HOA for the new home?
l) Look up the purchase of the new house. How much did he buy it for? How much did he finance and how much money did he put down?
m) Does Mitch have excessive debts? Does Mitch have a drug addiction, gambling addiction or shopping addiction?
n) A 2014 Jag. = 439/monthly
o) Why were his wages garnished? Did Mitch violate a court order?
82,282/year -Taxes____
Monthly Net: $5,270.00/monthly - 439.00 (2014 Jag) - 2000 (HOA & Mortgage) 2,831.00

-court obligations (350 – 2000) *depending on ex-wife’s salary $ 831.00 – Does Mitch have enough money to cover other household expenses and other expenses (life style)?

3) In Crystal’s case. I do not suspect it is Crystal. Her husband has a full time job.
I would find out the following to see if she has any pressure in her life that will lead to commit fraud.
a) What does her husband earn?
b) Do any of the adults have an addiction?
c) Do her children attend private or public school (can they afford it?)
d) How much was the new house (can they afford it?)
e) Is everyone healthy?

4) In John’s case. Are the parents currently employed? Are they healthy? He does not pay rent and maybe food. He only uses his money to pay studies, car payments and maintain a social life. Does he have any addiction? I conclude that Mitch is probably the one experiencing a significant amount of pressure, in comparison to the other employees, from the information given. Divorces can be very difficult. Mitch was ordered to pay “x” amount of money to his ex-wife. Probably, he was sued to have his wages garnished because he did not respect the court order. Nonetheless, he drives an expensive car and bought himself a home. He still has money to party, which we don’t know how he can afford it. Does he have any addiction? What is his timesharing schedule with his children? Is his lawyer paid in full? How much does he owe his lawyer? Is he prompt with his mortgage payments and etc.? He has a significant amount of years with the company and knows his way around. Someone like him has the opportunity to commit fraud. Last but not least, he may think is “ok” to commit fraud.