Background

FRP was engaged by a large national charity to investigate suspicions of financial irregularities at one of its branches, following the identification of discrepancies between its accounting records and a supplier ledger.

The branch was primarily managed by two volunteers, one of whom also performed the role of treasurer. We were advised by the charity that the treasurer had admitted misappropriating charitable funds by paying cheques into their own bank account and by cashing cheques.

We were instructed by the charity to forensically investigate the financial irregularities at the affected branch, and determine the amount of funds misappropriated, how they were taken, who was involved, and the likelihood of recovering the money.

Action

Our Forensic Technology team used Encase to forensically image the laptop of the individual concerned, process the data (including deleted data) held on the device, and upload it into Relativity, our in-house document review platform.

We developed keyword searches to identify relevant email correspondence, and performed digital forensic analysis to uncover deleted documents and access the internet history of the individual.

We performed a reconstruction of the branch’s annual reports of profit, incorporating relevant adjustments, and assessed the recoverability of the misappropriated sums. We utilised corporate intelligence services and our contentious insolvency team to perform background checks and asset searches on the key individuals subject to our investigation.

Outcome

We identified three key methods used to extract funds, and estimated the total value of misappropriated funds to be more than double the amount admitted by the individual. Our investigation report detailing our findings was provided to the police to assist with criminal proceedings.

The treasurer was charged, convicted and sentenced to five years in prison. In addition to the financial investigation we assisted the charity in developing a more stringent control framework in order to mitigate the risks of financial crime.