Why You Need a 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. And today's topic is gonna be why you need a forensic accountant. When I started out in this business 20, 30 years ago, there was no such thing as a forensic accountant. Most people didn't know what a forensic accountant is.
When I went to attorneys to talk about what I could...how I could help them, they'd say, "No, I already have someone doing my bookkeeping." I'd say, "No, I'm not a bookkeeper, I'm a forensic accountant." And I had explain to 'em that you give me a case and I can go in and testify if I think there's merit for damages. Now, most people know what a forensic accountant is because they're on TV, they're in books, and, you know, you turn on the news, you hear...and forensic accountants are being interviewed. But people still don't understand why you need a forensic accountant. If someone's an expert and are recognized by the court as an expert, they can go and testify in court. And we're there to help the judge or the jury understand the facts, okay, because this is a pretty technical issue and not everybody can understand a business valuation. Not everybody can understand a lost profit analysis. And you need an expert to go in and testify. And they have to be...they can't be biased. They can't be your brother, your father, your accountant, you know, you can't have your accountant and go in and testify in court that your company's worth X amount of money. First of all, he's not properly trained, but second of all he's not independent, and a judge is not gonna put a lotta weight on that opinion. But if you hire a true expert, someone who really studies this, understands he has to be independent, knows what techniques to do and knows how to explain it in court, that can help your case a lot.
A couple years ago, three or four years ago, a young lady walked in my office. She had a bandana and she had a child who was like three years old. And she said, you know, "My name is," you know, "Colleen so-and-so." And she said, "I am the illegitimate heir to so-and-so's fortune." And I knew this family because there was a family that passed away in New York, very wealthy family, extremely wealthy. And the father, the guy who passed away, had no relatives, so all the money was divided up, hundreds of millions of dollars, between his sisters and his brothers. And I said, "You know, I know a little bit about that estate," to where I said, "but he had no children." She says, "I am his only child. You know, I was a illegitimate child, but I was treated as a child by him. And the family accepted me as a child. I was involved in all the family functions and all the sisters and brothers knew me. But when he was sick, I had terminal cancer. And they thought I was gonna die, but I didn't die. I came out and went into...you know, they told me I was gonna get the assets. The will clearly said if he had any child, I was to get everything. I then got pregnant, my cancer came back." And she said, "That's why I've never gone to anybody before and tried to fight this." This is, you know, three or four years later, it was quite a while after his death. And I said, "Well," I said, "is anybody gonna say that? You know, are sisters and brothers gonna say that you are their, you know, the illegitimate?" "No." And I said, "Well, we're gonna have to exhume the body and we're gonna have to do a DNA test, and if the DNA test comes back, we'll be able to prove that you are his child."
And we did the test, and it did come back positive. So we were able to say this is his child. We went to court, but guess what? All the assets were dispersed by now, all the sisters and brothers had taken 'em, the money was all over the world, castles and you name it, jet planes, vacations, all over. So what we as forensic accountants had to do working with attorneys, what we did, we were able to go back to when her father died, reconstruct all the assets, okay, and say, "This is how much money she would've received." And then we went and got the money for her. You know, she was lucky, we were able to recover most of it because even though a lot...almost all of it was spent, the assets they bought appreciated because the economy's doing well.
And so as forensic accountants, we can go to court and testify, okay? Because we had other experts too, because other people did the DNA analysis who testified to prove that that was his daughter, and then we were able to testify based under these court rules I just read to you that we're...I'm an independent expert, these are the assets, this is where the money was, this is where the money went, and this is the value of the money, okay, and these assets have to be sold if she wants to sell it, or she can, you know, just take the assets and keep 'em. And, you know, when I testified, of course, they try to challenge your credibility. There's all kinds of rules and regulations I'm not gonna go into, but as an expert, you have to prepare.
One's called a [inaudible 00:05:32] challenge, where they try to throw me out as an expert because they don't want me testifying to this, okay? They wanna delay, delay, delay. But if I'm able to withstand that attack, my testimony stands. The judge and the jury can then make a decision and, you know, we had a very good outcome. She was able to get all her money, and, you know, everything went fine, at least for her. Thank you very much for your time. If you have any questions, give me a call or visit my website.