Recent Case:

Type of Matter:

The owner of a parking structure contracted out the management of the facility. The management services included collecting the parking fee and remitting the appropriate amount to the owners. At some point the owners began to suspect that money was being stolen. They did an investigation that included reviewing video surveillance evidence and determined that there was reason to proceed with a more formal investigation. They reviewed surveillance videos for several days and determined rather precisely how many cars entered the facility that were not reported as paying cars. With that evidence in hand they replaced the management company and called an attorney who contacted Arxis.

Arxis Work:

Arxis Financial initially reviewed the sampling of days that had been reviewed by management. There was little doubt that the amount of revenue actually collected on those days was materially understated. Based on the sampling we determined the methodology of the theft and, at least on those days, the amount of the theft. The methodology was confirmed by review of additional surveillance and documentation.

The next concern was to determine the period of time the theft took place so that the under-reported revenue could be quantified. Documents were reviewed and we found that the same company held the contract for several years and, additionally, the personnel hired by the management company to work at the parking structure had not changed since the beginning of the contract. The conclusion was that the loss period extended over the entire period of the contract.

Arxis Financial determined a ratio of reported cars to actual paying cars identified on the video surveillance and applied that ratio across the entire contact period to determine an amount of lost income. We compared our results with the actual results of income reported by the new management company and were satisfied that we had accurately estimated the lost income.

Result:

A jury trial was conducted at which we provided expert witness testimony. The jury came back with a verdict against the defendants and awarded damages based on the lost income calculations prepared by Arxis Financial.

Service Profile:

The Forensic Accounting practice is headed by partner Chris L. Hamilton, CPA, CFE, CVA. Mr. Hamilton is a Certified Public Accountant, Certified Fraud Examiner, Certified Valuation Analyst, and a Diplomate with the American Board of Forensic Accounting. Mr. Hamilton has published articles in several publications, and has made presentations at national conferences, training institutes and seminars on topics including forensic accounting, fraud and business appraisal.