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Certified Public Accountants
(805) 306-7890

Litigation Consulting


Forensic Accounting - Fraud - Business Valuation


January 2012

Recent Case:
"Family Law – Shareholder Income from an S Corporation"

In a recent family law matter, Arxis Financial, Inc. was retained by a spouse to establish her ex-husband’s income because he had petitioned the court for termination of spousal support. The husband claimed negative income (loss) of over $15,000 per month, while the wife claimed (based on our work) that husband’s income was over $11,000 per month, a difference of over $26,000 per month ($192,000 per year).

The difficulty in this case came from the fact that we were dealing with an S corporation. The husband is a shareholder and works for the business. Arxis Financial, Inc. showed total income that included salary plus cash distributions from the S corporation. The opposing expert showed total income (loss in this case) that included salary minus losses reported on the K-1. The only difference between the expert’s opinion was how the cash distributions from the S corporation should be handled.

The cross-examination was vigorous. It allowed Arxis to establish that our position in this case not necessarily applicable to every S corporation. Analysis of income from an S corporation is a facts-and-circumstances analysis.

Result: The court rejected the husband’s request to eliminate or reduce monthly spousal support. The court also indicated that, had the request been made, the evidence supported an increase in monthly support. (click here for further details on this case)

Upcoming Speech:
"Three Case Studies of Financial Fraud: Private Morality and Public Consequences"

Chris Hamilton will provide this presentation to the San Fernando Valley Bar Association's "Business Law, Real Property, & Bankruptcy Section" on January 11th, 2012.

Mr. Hamilton will discuss three fraud cases and demonstrate the impact of very "private" lapses of ethics and morality that had very profound public consequences. The first two cases are world-famous fraud cases and the third is a case of a fraud committed in a private company. The similarity between the cases is that small steps and compromises led to very public humiliation and far-reaching consequences. See the SFVBA website to sign-up to attend this event.

Practice Profile:
Forensic Accounting Services for Fraud

Embezzlement, misappropriation, cheating or stealing – whatever name you give it, corporate fraud is rampant. Fraud against a business includes the theft of physical assets including cash or inventory. Most fraud is committed by trusted employees who find a way to exploit that trust. Unfortunately, fraud is often undetected or under-estimated, since fraud, by its nature, involves concealment and deception.

Arxis Financial's "Forensic Accounting" practice is available to assist in determining the extent of monetary loss or damages from fraud and to help uncover how the loss occurred. Our services include reconstruction of accounting records, analysis of business transactions, document review and tracing, and expert witness testimony.

Our team of certified forensic accountants, certified fraud examiners and certified public accountants utilize various investigative and analytical procedures to support criminal or civil actions against an individual(s), form a basis for termination of a dishonest employee, and provide evidence for insurance claims

Partner Profile:
The Forensic Accounting practice is headed by partner Chris L. Hamilton, CPA, CFE, CVA, DABFA. Mr. Hamilton is a Certified Public Accountant, Certified Fraud Examiner, Certified Valuation Analyst, and a Diplomate with the American Board of Forensic Accounting. He is a licensed life and disability insurance agent and a General Securities Representative. 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.

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Copyright 2012 Arxis Financial. Articles may not be reprinted without permission.

Chris Hamilton Photo
Chris Hamilton, CPA CFE, CVA, DABFA
(805) 306-7890
Chris Hamilton Photo
Litigation Consulting
Forensic Accounting - Fraud - Business Valuation

Clients know us for results. Opposing counsel know Arxis for wishing they had hired us.