Litigation Support from a New Jersey Forensic Accountant
My name's Robert Bonavito, New Jersey Forensic Accountant. This video is part of a series of videos where I discuss forensic accounting topics for educational purposes only. If this was a litigated matter, I would take a different approach, have different conclusions based on different facts and circumstances. Today's topic is going to be "Litigation Support from a Forensic Accountant."
What do I mean by litigation support? Well, when you have a case, what we do is support the case and we're independent forensic accountants, we're brought in. You say, "Well, why would I need an accountant?" You know, a forensic accountant. Well, the main things we do, profit and loss claims, we defend against claims against accountants, against lawyers. We get involved in fraud cases, criminal cases, and valuing closely held businesses. Pretty much what I tell people is anything involving money issues in a case, we can get involved in.
You know, years ago I had a case, I don't know if you're a baseball fan, but the Phillie Phanatic, that costume you see on the field, they were fighting over the costume. And they wanted to... One side said they owned the costume and the other side said they owned the costume, but they needed someone to say, "Well, what is the costume worth?" And we were brought in to value the costume. Now, the interesting thing about the Phillie Phanatic, for example, is if I give you a little plastic toy, it cost, like, a half a cent or a tenth of a cent to make, I can sell that in the store for maybe a dime. But if I paint Phillie Phanatic on it and put a baseball in his hand, I can sell that for $1.50 or $2.00, make it a key chain.
So there, the value is 10 to 20 times or a 100 times, you know, from a half a cent to, you know, $1.50. That's a huge difference and when you multiply that by all the products, if you go to a Philly's game, they're being sold with the Phillie Phanatic on it, the costume's worth a lot of money. And, you know, in that case, what we did was we went into court, we valued the costume, and the judge made a ruling of who owned the costume. And, you know, if the other guy had it who was using it, they had to pay him the money that he lost from the royalties, and that's how we get involved in so many different cases with so many different issues.
With fraud, one of the largest real estate companies in the world, which we all know, they came to me and said, "Bob, we're losing, you know, $30 to $40 million and we don't know where it's going, every year." And so, what we did was we went into the company, we did an investigation and what we found out was one of the lawyers in the company, for this national builder who's listed on the New York Stock Exchange, was taking refunds from projects that weren't going through. Like, they would put down a $30 million deposit on a project in Manhattan and if it didn't go through, they'd get $20 million back.
And what this lawyer was doing was taking the $20 million and putting it in his attorney's trust account, and they couldn't figure it out, but we were able to go into the company, find out why they were losing this money. Unfortunately for them, all the money was gambled away, so they didn't get anything, but they were able to put this guy in jail and they were able to change their internal accounting controls. So, litigation support with a forensic accountant, we can help, like I said, with almost any issue involving money damages. Thank you very much for your time. If you have any questions, give me a call or visit my website.