Forensic Accounting Case Studies

The Challenge

A mid-sized manufacturing company suspected vendor fraud after noticing discrepancies during a routine audit. The company had 5 years of procurement data spread across multiple ERP systems and legacy databases. Previous manual investigations had found isolated issues but couldn't identify the full scope of the problem.

MAIA's Approach

• Integrated with all financial systems within 4 hours
• Analyzed 2.3 million transactions using behavioral and statistical analysis
• Identified vendor entities with fraud-indicative characteristics
• Traced fund flows to reveal hidden relationships between vendors and employees
• Generated court-ready documentation with complete audit trails

Key Findings

• Shell company network: 4 vendor entities controlled by a procurement manager's relatives
• Duplicate payment scheme: 847 duplicate payments totaling $1.2M over 3 years
• Price manipulation: Systematic overcharging of 15-40% on contracted goods
• Kickback indicators: Unusual payment timing and round-dollar amounts linked to employee bank deposits

The Challenge

A private equity firm had a 5-day window to complete financial due diligence on a $85M acquisition target. The target company's financial records were spread across multiple systems with inconsistent data quality. Traditional due diligence methods would require 3-4 weeks minimum.

MAIA's Approach

• Deployed rapid integration with target's ERP and accounting systems
• Performed comprehensive transaction-level analysis across 7 years of data
• Applied revenue recognition fraud detection algorithms
• Identified undisclosed liabilities through payment pattern analysis
• Generated executive summary with supporting evidence for deal negotiations

Key Findings

• Revenue timing issues: $3.4M in revenue recognized prematurely in final two quarters
• Undisclosed liabilities: $2.1M in warranty obligations not reflected in financial statements
• Related party transactions: Unusual payments to entities linked to management
• Compliance gaps: Multiple revenue recognition policy violations under GAAP
• Working capital manipulation: Artificial extension of payment terms with key vendors

The Challenge

A publicly-traded financial services company needed to demonstrate SOX compliance across 15 business entities. Manual control testing was consuming 40% of the internal audit team's capacity, and periodic testing meant violations weren't detected until audit cycles.

MAIA's Approach

• Implemented continuous control monitoring across all 15 entities
• Automated segregation of duties testing with real-time alerts
• Configured transaction-level authorization monitoring
• Established automated evidence collection for audit readiness
• Created executive dashboards for compliance status visibility

Results Achieved

• Immediate detection: Segregation of duties violations flagged within minutes vs. quarterly discovery
• Reduced audit prep: Automated evidence packages reduced preparation time by 70%
• Proactive remediation: Control weaknesses identified and addressed before external audit
• Resource reallocation: Internal audit team shifted to high-value advisory work

The Challenge

A regional insurance carrier was experiencing increasing claims fraud but lacked the analytical capability to identify organized fraud schemes. Special Investigations Unit (SIU) was overwhelmed with referrals and couldn't distinguish sophisticated fraud from legitimate claims.

MAIA's Approach

• Analyzed 3 years of historical claims data to establish fraud patterns
• Implemented real-time scoring for incoming claims
• Applied network analysis to identify connected claims and claimants
• Cross-referenced claims data with external data sources
• Prioritized SIU referrals by fraud probability and potential impact

Key Findings

• Organized rings: 12 distinct fraud networks involving staged accidents and inflated claims
• Provider collusion: Medical providers systematically overbilling for treatment
• Repeat offenders: Claimants filing under multiple identities across carriers
• Processing improvement: Legitimate claims processed 50% faster with automated verification