April 30, 2025 • 25 mins
Jamie M. Lima is joined by Kelly J. Todd to delve into the role of forensic accounting in divorce cases. They discuss the importance of financial awareness and involvement in marriage, emphasizing the need for gathering financial information and understanding the forensic investigation process. The episode addresses challenges faced when working with attorneys during financial investigations and highlights common financial discrepancies found in divorce cases. Key topics include the technological and ethical aspects of forensic accounting, with tailored advice for both high-asset and low-asset divorce scenarios.
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Episode Transcript
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(00:00):
Welcome back to another episode of broke up,not broken.
(00:03):
I'm your host, Jamie Lima and founder ofAllegiant Divorce Solutions, where we help
people prepare for, navigate, and recoverfinancially from divorce.
This podcast is your one stop shop formastering your life and your finances
throughout the entire divorce process.
In today's episode of Broke Up Not Broken,we're delighted to welcome Kelly j Todd,
(00:23):
president and forensic investigator at ForensicStrategic Solutions.
With a profound passion for unveiling the truthbehind complex financial data, Kelly has a
storied career in forensic accounting,teaching, and serving as an expert witness in
courtrooms.
Her work not only involves intricate financialinvestigations, but also extends to educating
others through her contributions to theforensic strategic solutions blog where she
(00:46):
shares insights into the latest trends andtechniques in forensic accounting.
This conversation has been one I've beenlooking forward to for so very long.
It is so great to have you here with us, Kelly.
Thanks for joining us.
Great.
Well, I am you know, thanks for having me.
I'm I'm very happy to be here.
So, yeah, looking forward to getting started.
(01:06):
Yeah.
Absolutely.
Well, this is forensic accounting.
The forensic financials thing is something thatcomes up in pretty much every case that we work
at Allegiant Divorce Solutions for a variety ofreasons, all of which would we'd be, like, five
podcasts on all the different concepts andcases that we've we've seen over the years
doing this work.
(01:27):
But one of the things that I found is that, youknow, folks like you, you don't necessarily
need to wait to bring in a financial accountanteffectively to the to the mix if you're
considering contemplating divorce.
Right?
So there's there's a benefit of using youleading up to divorce and preparing for it, but
there's also a significant benefit of using youusing someone like yourself while you're going
(01:49):
through a divorce.
Right?
And so maybe talk a little bit more about that,like, kind of that beginning stages because a
lot of the people that we work with haven'teven thought about hiring someone like you, and
now they're in the throes of a divorce.
Well, you know, the the thing is, think, youknow, just kind of on the front end I mean,
stop and think about it.
Wherever there's money at stake, there islikely to be some kind of risk of deception.
(02:13):
Right?
And most people don't think like that, at leastin my experience.
And and, you know, you you know, when you'retalking about divorce, there are a lot of bad
things that are happening.
They're, you know, emotional, you name it.
And, again, when there's something at stake,the possibility of that deception occurring or
(02:33):
the exploitation of one of the partners from afinancial perspective is great.
You know, at least in my experience, find andand I know in my own marriage, one of us is
financially savvy and and knows what's goingon, and one of us does not.
And it's not because I'm hiding something frommy husband, but it just, you know, kinda
happened that way.
(02:54):
But over the course of my career and and likeyou mentioned, my my career has been focused on
what happens after and or what happens you'rein the throes of a divorce.
I'm the person that you call when you you know,when somebody needs to follow the money, when
(03:15):
we're looking for hidden assets, when it comestime to put the bad guy away.
Now that's that's a little bit different sideof my business.
That doesn't necessarily happen in divorce, buta lot of the work that I do, you know, does get
to that point.
But I I find myself at this point in my careernow where I can take my experiences and and
(03:37):
help raise awareness for others that are in thethroes of some kind of major financial event.
And help raise awareness to empower somebody towith tools to help prevent that kind of
exploitation or that financial betrayal beforeit actually happens.
(03:59):
You know?
So I'm I'm fortunate now to just to be able togo out and spread the word, essentially.
What are some of those tools?
Well, I I would say the the very first thing, Imean, just from a awareness perspective is
going back to the you know, there's usually onespouse who knows what's going on and one who
doesn't.
(04:19):
The very first tool is to be aware, is to makeit your business to know what's happening from
a financial perspective in your marriage.
Now that doesn't mean that you know everysingle in and out, but and and, also, it can be
sometimes that that's something that's easiersaid than done, but to to just make yourself
(04:44):
aware.
Because the types of things that we startseeing are hidden assets or, you know, money
going into you know, one very common way ofhiding now has become far more popular is
cryptocurrency.
You know, watching where your money is goingand being aware of accounts.
(05:04):
And even if it's as simple as listening toconversations that your spouse has about money
with others, if you're out to dinner or abusiness dinner or something of of that nature.
But it is truly about just being aware ofwhat's happening.
And, you know, like I said, make it yourbusiness.
(05:27):
Yeah.
And that that I mean, that goes for even peoplethat are not going through a divorce.
Right?
I mean, it's Absolutely.
I've I've been a financial planner for almosttwenty years now.
And even in even in the traditional financialplanning engagements that we have where we're
just working with, you know, families to helpthem figure out things like college planning
and retirement planning and insurance needs andthings like that, there tends to only be one
(05:53):
spouse that is truly, you know, the the pointperson.
Right?
It it's that doesn't have to always be male feeyou know, the the the male in the relationship,
but a lot in many cases, it is it is the femalethat, you know, the the wife in cases.
And I I've been telling people for years andyears and years, if if you're the point person,
you owe it to your family to bring them in onthese conversations because it's it's not there
(06:17):
may be a time when it's maybe maybe it's notdue to divorce, but it's due to death.
Mhmm.
And you have to be involved in thoseconversations, and you're left to pick up the
but and but you're not, and then you're left topick up the pieces when when all is said and
done.
So, you know, for those that are listening outthere that are, you know, are maybe it's not
necessarily divorce that you're concernedabout, but also traditional finances, you have
to be involved.
(06:37):
Mhmm.
You know?
And I think it's like you said, it's just, youknow, being aware, asking some questions,
understanding if if heaven forbid somethingwere to happen, where do you go?
Who do you talk to?
Where is all the information?
And I think that's that's a solid first step.
Wouldn't you agree?
Yeah.
Absolutely.
And something as simple as just having aconversation on a monthly basis or a quarterly
(07:00):
basis.
You know, accounts that you've got, you know,where the money is being spent, that sort of
thing, investments.
Just and and and as you said, it's not justabout divorce because it's also any kind of
family situation, death, you name it.
Put putting those pieces of the puzzle togethercan be very difficult if you if you are
starting at zero.
(07:21):
Yeah.
One of the things that I found in my almostevery case that we work on, we start off with
about 60% of the information we need.
And, usually, it's the information that we havefrom our side of the case.
Right?
Like, the the other side isn't forthcoming.
They're not transparent.
They've they've tried to hide money, so they'renot they don't wanna share the information.
(07:44):
They don't wanna even things like tax returnsthere, it's very difficult to get access to.
So let's still sticking with the, you know,maybe leading up to the divorce and maybe in
the beginning stages of the divorce, what arethe most important things that you would say
you need to start thinking about gathering ifyou think there is some kind of financial
funkiness involved?
Yeah.
(08:04):
Bank statements, investment statements, taxreturns, anything of that nature.
And, you know, when you when you start havingdifficulty or if or if you see that there are
missing statements, you know, that can be anindication that something might be amiss.
But, also, just from the I guess, this goesmore into digging into the records as opposed
(08:27):
to just what you're gathering, but, you know,pay attention to transactions.
Are is it are there transactions that areoccurring that look unusual or money being
moved to an account you've never seen before?
You know, I I I tell people so often, don'tjust gather those bank statements.
Look at them.
You know, what what kind of what kind of thingswhat kind of transactions are you seeing in
(08:51):
there?
You know, can be very helpful.
Can you walk us through what the process is?
Like, what like, let's say somebody thinks thatthere's there's something going on and we wanna
we hire you and and you're working on, youknow, one of our with one of our clients.
What is that experience like?
Is is is there a lot of data gathering, or isit a matter of, let's just, like, start do you
(09:15):
start from the like like, I what what is everyeverybody that I've worked with has a different
different process or or seems to follow alittle bit of different process, but what's
what's your process?
Well, one one of the first things is we wewould wanna gain a little bit of information.
You know?
What's happening?
What have you seen?
What do you suspect?
And, yes, then it's it's gathering theinformation and putting the pieces of the the
(09:38):
puzzle together.
We start we build a database of transactionsand you know?
But let let me back up just a second too.
I mean, generally, we we get hired by theattorney one of the attorneys.
And and then just from the from the perspectiveof of gathering the documents, we don't
(10:02):
necessarily ask for the kitchen sink, but let'sfind a good starting place.
Because we you know, it as you you know, thistype of thing, this type of type of analysis
doesn't come cheap.
And so we don't want to run down a bunch ofrabbit holes and and and that sort of thing.
(10:27):
So we're we're we need to have an understandingof the core, an understanding of transactions
or things perhaps that you have that that the,you know, the the spouse has seen or heard,
that sort of thing.
And then start following we just startfollowing the money from there.
(10:48):
And, you know, I mean, I can give you plenty ofscenarios to where they thought there were only
three accounts, and we end up coming back with,you know, 30 extra accounts.
Like, well, what about this one?
And what about this one?
And, you know, that type of thing.
So
I I can see that happening all the time becausewhen even when we get into the to the
statements, you can start to see money shiftingaround and or, you know, the the tax returns is
(11:14):
a really good place to look at.
You know, there were maybe there's adistribution, and now it's like, okay.
Well, where did that money go?
Because we're not seeing it on any of the bankstatements, so on and so forth.
So but but one of one of the things that I thathas been a challenge for me personally, so I'm
gonna ask this question selfishly.
So sorry, listeners.
This is all about me in this moment, is dealingwith the attorneys.
(11:35):
The attorneys, I found, tend to feel likethey've got it all handled.
And and what I've seen in a lot of cases isthey're like, well, you know, like, they don't
really wanna work with us or they're kindalukewarm to the idea.
It's about fifty fifty.
You have about half of them that think that youknow, because they don't wanna give up the
billable hours.
(11:56):
Mhmm.
They wanna keep all the all the money tothemselves.
And they feel like if they can handle itthemselves, then then they're gonna be the hero
at the end.
And in many cases, they just start spinningtheir wheels because they don't understand the
financials like, you know, folks like we do.
What has been your experience and kind of,like, what would you tell the audience if
that's, you know, some of the the feedback orthe pushback that you're getting from the
(12:16):
attorney?
You know, I've seen it all over the board.
A lot of times how we end up in a divorcesituation is because there's really two sides
of my practice.
Practice.
And one is the investigation side, which is myexpertise.
And then my partner's side of the practice isbusiness valuation.
So those divorces where there are privatelyheld businesses that need to be valued to
(12:41):
determine, you know, the the equitabledistribution.
So often, our divorce work starts from thatplace, from the business valuation place.
And then there may be suspicions something maybe going on.
For example, you know, unreported income or,you know, we oftentimes see some premeditated
(13:04):
we affectionately call it premeditatedpredivorce economic downturn syndrome where,
you know, the economy is going great, but allof a sudden this business right before divorce
happens suddenly has this, you know, downwardspiral.
But that's a lot where we get brought in.
And in those particular cases and a lot of thework that we do is in high net worth divorce
(13:29):
where it's very complicated financialsituation, we tend to see attorneys who are
more than willing to hire us for the help forthe business valuation aspect.
But we have run into those folks who eitherhave, you know, an accountant on staff, and
they wanna try to follow the money or, youknow, make the determination of you know, as
(13:52):
far as alimony goes and doing that kind oflifestyle analysis sort of a thing.
But when it gets complicated is when theytypically call us in.
And they they tend not at that point to wannahoard the work.
But you know?
And and I've seen it though from the otherperspective where I've had I've had folks call
(14:18):
me directly, not non attorneys, the person, youknow, going through the divorce call and say,
you know, I know this is happening, and and,you know, they're they're very emotional.
I mean, you you know this.
And Mhmm.
Emotional.
And we will typically say to them, because wecan't get access on our own, we don't have
(14:39):
subpoena power.
We're relying upon the attorneys to get usaccess to a lot of the information because
especially in in that kind of situation, it ismore likely than not gonna be the other spouse
that's got the access to the information.
So that's why I say that we're typicallybrought in by the attorneys.
But where I was going with that was that whenwhen I have been or when we have been contacted
(15:03):
directly by the divorcing spouse, You know,we'll say, go talk to your attorney.
Share this information.
We always recommend you know, if you if yoususpect that there's a there are there's funny
business going on, Document it.
Because documenting it not only helps you thinkabout it a little more clearly, and it might
(15:26):
jog your memory and and and that sort of thing.
It also helps communicate to the professional,to to me or to the attorney, you know, what
might be going on.
So again, we can we can make that, as as I liketo say, the the rifle shot to the problem as
opposed to just splattering and spending a lotof money that doesn't need to be spent.
(15:49):
But, you know, I I have had people contact meand then they go to their attorney and their
attorney's like, yeah, you don't need that.
And that's that's problematic, but, you know,that again, the attorneys that we work with, we
typically don't run into that problem.
Got it.
At that point, they're probably realizing howover their head with it.
(16:13):
Yeah.
Over their head it is.
I've seen that happen a lot.
So we've we talked a little bit about, youknow, preparing for the divorce and kind of in
the early stages of the divorce.
Now we've hired an attorney, and they'vethey've started to think about bringing you
into the mix or they've you know, the theclient has called you themselves and said,
like, we're kind of in this we're in it now.
Starts stuff starting to kinda surface, and I Ineed your help.
(16:34):
What are some of the most common discrepanciesthat you've found?
I I mean, I have my opinion on this, but you'reyou're the one doing this work.
So what are some of the most common financialdiscrepancies that you find in your
investigations?
Yeah.
Typically, it's gonna be hidden accounts.
That that is probably I wouldn't say I mean, Iguess from the investigation standpoint, that's
(16:56):
the thing that we run into a lot.
Our account hidden assets, unknown accounts,and or there is the, you know, underreporting
of income or the down the economic downturnthat I mentioned before, especially, you you
you know, in the where there is one or moreprivately held businesses in the marriage.
(17:20):
And, typically, one spouse has no access,doesn't really know it really what's going on
in the business.
You know?
Then then we start seeing monkey business goingon on in that business, whether it's you know,
one example is a a spouse who had multipleprivately held businesses, but was also had
(17:43):
some businesses with their in their with theirfamily.
And they were the spouse was movingunderperforming clients to his personal
business that that was under the umbrella ofthe marriage and moving the lucrative clients
to the other businesses so that hiding hidingthe income and and that type of thing.
(18:06):
So yeah.
I mean, it's all over the board, but hiddenassets, unreported income, things of that
nature.
How do you typically find that the work thatyou do impacts the outcome of the of the
proceedings?
What I'm sorry?
How do you how do you based on the work thatyou do, like, what what have you seen?
(18:26):
Like, you know, and and what is the impact tothe proceedings?
I mean, I presume that the when once you comein and you've been able to to to make a case
for these these hidden accounts and show thecourts, like, what all the all the findings
that you have, I presume that positivelyimpacts the client experience.
So, like, what what do you usually see?
(18:46):
I mean, is it an increase in alimony?
Is it increase in asset?
Like, what what is what's what's been yourexperience?
Yeah.
So, I mean, all across the board.
You know, a lot of times we see things settlevery quickly for the good simply because, you
know well, then, you know, then then then thatmakes you ask, well, wait a minute.
Why they wanna settle so quickly?
(19:06):
Because there's something else we don't knowabout.
But but yeah.
I mean but, typically, it will it brings anopportunity to increased alimony, increased
child support, you know, division of assets,that sort of thing.
But but, yes, typically from a from a positiveperspective.
(19:27):
Nice.
Yeah.
I'm gonna ask another selfish question.
This is apparently this conversation isapparently all about me today.
I'm interested in understanding some of thetechnology that's involved because this can't
necessarily just be done with spreadsheets.
Right?
Because you you might deal with you know, youhave one account that could take you down a
rabbit hole that turns into you know, you found30 other accounts like you mentioned earlier.
(19:51):
What kind of technology are you using?
Is there like, are you using AI?
How is it what's what's this all look like?
Yeah.
So the primary technology and to answer thequestion, yes.
It is a lot of it.
A lot of it is spreadsheets.
And but we use technology that allows us youknow, back in the day when I first started, it
was all hand keying.
(20:11):
So there was it was a lot of work, and thenthere again, very expensive, you know, to build
a whole database of financial transactions andaccounts connected to each other and and all of
that sort of thing.
But now we use software that allows us thatwill take some of even the worst copy of a copy
(20:32):
of a copy of a bank statement that we feed intothe software and it will it will bring us back
a very nice clean spreadsheet of transactions.
So that helps to really alleviate the time thatgets put into the the manual labor of it.
We still have to use our own brains for our forthe actual analysis.
(20:57):
And as far as AI goes, the difficulty for usstill is confidentiality.
So we you know, it is there it's also new rightnow.
And someone will tell you, oh, yeah.
This is perfectly confidential and security isgreat.
And then in the next breath, it's like, well,no.
(21:20):
Hold on.
You know, your your client's bank statementsare out there and in the cloud and, you know,
so, you know, security issues, really.
I do foresee over time AI being very helpful inthis in this sort of situation.
But for us, the kind of work that we do, notyet.
(21:40):
I was gonna ask about some of the ethicalconsiderations that you have to deal with.
Yeah.
Yeah.
The and and and it for for us, it's primarilyconfidentiality, for sure.
But You
mean you don't wanna send somebody's bankstatements out to chat GPT?
You know, there's only so much you can redact,and and get away with it.
(22:03):
So yeah.
But not right now.
Not chat GPT for sure.
No.
No.
We use it for other reasons, but not forfinancial analysis.
A %.
I'm a I'm a big fan of ChatGPT.
I we we use ChatGPT for a lot of things, butsending bank statements to the to the wherever
it goes, which is above my pay grade for sure.
(22:23):
From a technology perspective, I I we certainlydon't trust it at this stage of the game.
Yeah.
Yeah.
This I would say this is kinda what we call thecarte blanche segment of our of our
conversation.
So if there's is there anything that I didn'task of you that I I should have asked or
anything you wanna share with our lit listenersthat would be important for them to to know?
(22:46):
Well, I I I don't know that it's it's, youknow, anything that you didn't ask, but I I
would say this, is that just from an awarenessperspective, fraud really financial fraud
really thrives in silence.
Bring that silence out into the open, and wetalked about that a little bit.
And and then the other thing is is that, youknow, you for your listeners is that they're
(23:09):
not powerless in this process.
I mean, the more that they know, the strongerthat they're gonna stand.
So like I said, make it your business to knowyour your your finances and or the accounts
that are out there and available.
Yeah.
It's a very good point.
I mean, I we we deal with that financial fraud,financial abuse all the time.
(23:33):
And, it's sad to see, but it the more work wedo in this space and and the more the more we
see it, it's just
it's Mhmm.
So many people have had that experience,unfortunately.
Yeah.
Yeah.
And and the other thing is too, I think, isthat you don't have to be a millionaire to have
(23:54):
this be a problem.
It it it can be the smallest amount of income.
It just doesn't matter.
Just make it your business.
Yeah.
We just wrapped up a case that was $18,000,000in assets with a couple jets and multiple homes
and all kinds of stuff involved.
And the and the reality is is that we saw thesame things in that case that we saw in the
(24:16):
case where I have a I have a gal who's livingin a shelter trying to, you know, rebuild her
life, and and we're trying to help her throughthe divorce side of thing divorce side of
things.
And, you know, there's not a lot of assetsinvolved, but she really needs the help and
support and a lot so many parallels in thosecases, and you're talking about, you know,
(24:38):
$250,000 in assets versus almost 20,000,000.
Yeah.
Insane.
Yeah.
It really is.
Well, Kelly, thank you so much for sharing yourinvaluable insights with us and all of your
experiences with us today.
For our listeners who wanna learn more aboutforensic accounting or need expert assistance
in their financial disputes, you can find moreinformation about Kelly's work by visiting
(25:00):
forensicstrategic.com.
You're navigating through complex financialchallenges in a divorce, remember that
Allegiant Divorce Solutions is here to supportyou all along the way.
Visit allegiantds.com for expert advice andavailable resources.
Don't forget to subscribe to our podcast formore enlightening discussions.
And until next time, stay informed andproactive, keyword there, be proactive in
(25:22):
managing your financial affairs.
Until next time.
Welcome back to another episode of broke up,not broken.
(00:03):
I'm your host, Jamie Lima and founder ofAllegiant Divorce Solutions, where we help
people prepare for, navigate, and recoverfinancially from divorce.
This podcast is your one stop shop formastering your life and your finances
throughout the entire divorce process.
In today's episode of Broke Up Not Broken,we're delighted to welcome Kelly j Todd,
(00:23):
president and forensic investigator at ForensicStrategic Solutions.
With a profound passion for unveiling the truthbehind complex financial data, Kelly has a
storied career in forensic accounting,teaching, and serving as an expert witness in
courtrooms.
Her work not only involves intricate financialinvestigations, but also extends to educating
others through her contributions to theforensic strategic solutions blog where she
(00:46):
shares insights into the latest trends andtechniques in forensic accounting.
This conversation has been one I've beenlooking forward to for so very long.
It is so great to have you here with us, Kelly.
Thanks for joining us.
Great.
Well, I am you know, thanks for having me.
I'm I'm very happy to be here.
So, yeah, looking forward to getting started.
(01:06):
Yeah.
Absolutely.
Well, this is forensic accounting.
The forensic financials thing is something thatcomes up in pretty much every case that we work
at Allegiant Divorce Solutions for a variety ofreasons, all of which would we'd be, like, five
podcasts on all the different concepts andcases that we've we've seen over the years
doing this work.
(01:27):
But one of the things that I found is that, youknow, folks like you, you don't necessarily
need to wait to bring in a financial accountanteffectively to the to the mix if you're
considering contemplating divorce.
Right?
So there's there's a benefit of using youleading up to divorce and preparing for it, but
there's also a significant benefit of using youusing someone like yourself while you're going
(01:49):
through a divorce.
Right?
And so maybe talk a little bit more about that,like, kind of that beginning stages because a
lot of the people that we work with haven'teven thought about hiring someone like you, and
now they're in the throes of a divorce.
Well, you know, the the thing is, think, youknow, just kind of on the front end I mean,
stop and think about it.
Wherever there's money at stake, there islikely to be some kind of risk of deception.
(02:13):
Right?
And most people don't think like that, at leastin my experience.
And and, you know, you you know, when you'retalking about divorce, there are a lot of bad
things that are happening.
They're, you know, emotional, you name it.
And, again, when there's something at stake,the possibility of that deception occurring or
(02:33):
the exploitation of one of the partners from afinancial perspective is great.
You know, at least in my experience, find andand I know in my own marriage, one of us is
financially savvy and and knows what's goingon, and one of us does not.
And it's not because I'm hiding something frommy husband, but it just, you know, kinda
happened that way.
(02:54):
But over the course of my career and and likeyou mentioned, my my career has been focused on
what happens after and or what happens you'rein the throes of a divorce.
I'm the person that you call when you you know,when somebody needs to follow the money, when
(03:15):
we're looking for hidden assets, when it comestime to put the bad guy away.
Now that's that's a little bit different sideof my business.
That doesn't necessarily happen in divorce, buta lot of the work that I do, you know, does get
to that point.
But I I find myself at this point in my careernow where I can take my experiences and and
(03:37):
help raise awareness for others that are in thethroes of some kind of major financial event.
And help raise awareness to empower somebody towith tools to help prevent that kind of
exploitation or that financial betrayal beforeit actually happens.
(03:59):
You know?
So I'm I'm fortunate now to just to be able togo out and spread the word, essentially.
What are some of those tools?
Well, I I would say the the very first thing, Imean, just from a awareness perspective is
going back to the you know, there's usually onespouse who knows what's going on and one who
doesn't.
(04:19):
The very first tool is to be aware, is to makeit your business to know what's happening from
a financial perspective in your marriage.
Now that doesn't mean that you know everysingle in and out, but and and, also, it can be
sometimes that that's something that's easiersaid than done, but to to just make yourself
(04:44):
aware.
Because the types of things that we startseeing are hidden assets or, you know, money
going into you know, one very common way ofhiding now has become far more popular is
cryptocurrency.
You know, watching where your money is goingand being aware of accounts.
(05:04):
And even if it's as simple as listening toconversations that your spouse has about money
with others, if you're out to dinner or abusiness dinner or something of of that nature.
But it is truly about just being aware ofwhat's happening.
And, you know, like I said, make it yourbusiness.
(05:27):
Yeah.
And that that I mean, that goes for even peoplethat are not going through a divorce.
Right?
I mean, it's Absolutely.
I've I've been a financial planner for almosttwenty years now.
And even in even in the traditional financialplanning engagements that we have where we're
just working with, you know, families to helpthem figure out things like college planning
and retirement planning and insurance needs andthings like that, there tends to only be one
(05:53):
spouse that is truly, you know, the the pointperson.
Right?
It it's that doesn't have to always be male feeyou know, the the the male in the relationship,
but a lot in many cases, it is it is the femalethat, you know, the the wife in cases.
And I I've been telling people for years andyears and years, if if you're the point person,
you owe it to your family to bring them in onthese conversations because it's it's not there
(06:17):
may be a time when it's maybe maybe it's notdue to divorce, but it's due to death.
Mhmm.
And you have to be involved in thoseconversations, and you're left to pick up the
but and but you're not, and then you're left topick up the pieces when when all is said and
done.
So, you know, for those that are listening outthere that are, you know, are maybe it's not
necessarily divorce that you're concernedabout, but also traditional finances, you have
to be involved.
(06:37):
Mhmm.
You know?
And I think it's like you said, it's just, youknow, being aware, asking some questions,
understanding if if heaven forbid somethingwere to happen, where do you go?
Who do you talk to?
Where is all the information?
And I think that's that's a solid first step.
Wouldn't you agree?
Yeah.
Absolutely.
And something as simple as just having aconversation on a monthly basis or a quarterly
(07:00):
basis.
You know, accounts that you've got, you know,where the money is being spent, that sort of
thing, investments.
Just and and and as you said, it's not justabout divorce because it's also any kind of
family situation, death, you name it.
Put putting those pieces of the puzzle togethercan be very difficult if you if you are
starting at zero.
(07:21):
Yeah.
One of the things that I found in my almostevery case that we work on, we start off with
about 60% of the information we need.
And, usually, it's the information that we havefrom our side of the case.
Right?
Like, the the other side isn't forthcoming.
They're not transparent.
They've they've tried to hide money, so they'renot they don't wanna share the information.
(07:44):
They don't wanna even things like tax returnsthere, it's very difficult to get access to.
So let's still sticking with the, you know,maybe leading up to the divorce and maybe in
the beginning stages of the divorce, what arethe most important things that you would say
you need to start thinking about gathering ifyou think there is some kind of financial
funkiness involved?
Yeah.
(08:04):
Bank statements, investment statements, taxreturns, anything of that nature.
And, you know, when you when you start havingdifficulty or if or if you see that there are
missing statements, you know, that can be anindication that something might be amiss.
But, also, just from the I guess, this goesmore into digging into the records as opposed
(08:27):
to just what you're gathering, but, you know,pay attention to transactions.
Are is it are there transactions that areoccurring that look unusual or money being
moved to an account you've never seen before?
You know, I I I tell people so often, don'tjust gather those bank statements.
Look at them.
You know, what what kind of what kind of thingswhat kind of transactions are you seeing in
(08:51):
there?
You know, can be very helpful.
Can you walk us through what the process is?
Like, what like, let's say somebody thinks thatthere's there's something going on and we wanna
we hire you and and you're working on, youknow, one of our with one of our clients.
What is that experience like?
Is is is there a lot of data gathering, or isit a matter of, let's just, like, start do you
(09:15):
start from the like like, I what what is everyeverybody that I've worked with has a different
different process or or seems to follow alittle bit of different process, but what's
what's your process?
Well, one one of the first things is we wewould wanna gain a little bit of information.
You know?
What's happening?
What have you seen?
What do you suspect?
And, yes, then it's it's gathering theinformation and putting the pieces of the the
(09:38):
puzzle together.
We start we build a database of transactionsand you know?
But let let me back up just a second too.
I mean, generally, we we get hired by theattorney one of the attorneys.
And and then just from the from the perspectiveof of gathering the documents, we don't
(10:02):
necessarily ask for the kitchen sink, but let'sfind a good starting place.
Because we you know, it as you you know, thistype of thing, this type of type of analysis
doesn't come cheap.
And so we don't want to run down a bunch ofrabbit holes and and and that sort of thing.
(10:27):
So we're we're we need to have an understandingof the core, an understanding of transactions
or things perhaps that you have that that the,you know, the the spouse has seen or heard,
that sort of thing.
And then start following we just startfollowing the money from there.
(10:48):
And, you know, I mean, I can give you plenty ofscenarios to where they thought there were only
three accounts, and we end up coming back with,you know, 30 extra accounts.
Like, well, what about this one?
And what about this one?
And, you know, that type of thing.
So
I I can see that happening all the time becausewhen even when we get into the to the
statements, you can start to see money shiftingaround and or, you know, the the tax returns is
(11:14):
a really good place to look at.
You know, there were maybe there's adistribution, and now it's like, okay.
Well, where did that money go?
Because we're not seeing it on any of the bankstatements, so on and so forth.
So but but one of one of the things that I thathas been a challenge for me personally, so I'm
gonna ask this question selfishly.
So sorry, listeners.
This is all about me in this moment, is dealingwith the attorneys.
(11:35):
The attorneys, I found, tend to feel likethey've got it all handled.
And and what I've seen in a lot of cases isthey're like, well, you know, like, they don't
really wanna work with us or they're kindalukewarm to the idea.
It's about fifty fifty.
You have about half of them that think that youknow, because they don't wanna give up the
billable hours.
(11:56):
Mhmm.
They wanna keep all the all the money tothemselves.
And they feel like if they can handle itthemselves, then then they're gonna be the hero
at the end.
And in many cases, they just start spinningtheir wheels because they don't understand the
financials like, you know, folks like we do.
What has been your experience and kind of,like, what would you tell the audience if
that's, you know, some of the the feedback orthe pushback that you're getting from the
(12:16):
attorney?
You know, I've seen it all over the board.
A lot of times how we end up in a divorcesituation is because there's really two sides
of my practice.
Practice.
And one is the investigation side, which is myexpertise.
And then my partner's side of the practice isbusiness valuation.
So those divorces where there are privatelyheld businesses that need to be valued to
(12:41):
determine, you know, the the equitabledistribution.
So often, our divorce work starts from thatplace, from the business valuation place.
And then there may be suspicions something maybe going on.
For example, you know, unreported income or,you know, we oftentimes see some premeditated
(13:04):
we affectionately call it premeditatedpredivorce economic downturn syndrome where,
you know, the economy is going great, but allof a sudden this business right before divorce
happens suddenly has this, you know, downwardspiral.
But that's a lot where we get brought in.
And in those particular cases and a lot of thework that we do is in high net worth divorce
(13:29):
where it's very complicated financialsituation, we tend to see attorneys who are
more than willing to hire us for the help forthe business valuation aspect.
But we have run into those folks who eitherhave, you know, an accountant on staff, and
they wanna try to follow the money or, youknow, make the determination of you know, as
(13:52):
far as alimony goes and doing that kind oflifestyle analysis sort of a thing.
But when it gets complicated is when theytypically call us in.
And they they tend not at that point to wannahoard the work.
But you know?
And and I've seen it though from the otherperspective where I've had I've had folks call
(14:18):
me directly, not non attorneys, the person, youknow, going through the divorce call and say,
you know, I know this is happening, and and,you know, they're they're very emotional.
I mean, you you know this.
And Mhmm.
Emotional.
And we will typically say to them, because wecan't get access on our own, we don't have
(14:39):
subpoena power.
We're relying upon the attorneys to get usaccess to a lot of the information because
especially in in that kind of situation, it ismore likely than not gonna be the other spouse
that's got the access to the information.
So that's why I say that we're typicallybrought in by the attorneys.
But where I was going with that was that whenwhen I have been or when we have been contacted
(15:03):
directly by the divorcing spouse, You know,we'll say, go talk to your attorney.
Share this information.
We always recommend you know, if you if yoususpect that there's a there are there's funny
business going on, Document it.
Because documenting it not only helps you thinkabout it a little more clearly, and it might
(15:26):
jog your memory and and and that sort of thing.
It also helps communicate to the professional,to to me or to the attorney, you know, what
might be going on.
So again, we can we can make that, as as I liketo say, the the rifle shot to the problem as
opposed to just splattering and spending a lotof money that doesn't need to be spent.
(15:49):
But, you know, I I have had people contact meand then they go to their attorney and their
attorney's like, yeah, you don't need that.
And that's that's problematic, but, you know,that again, the attorneys that we work with, we
typically don't run into that problem.
Got it.
At that point, they're probably realizing howover their head with it.
(16:13):
Yeah.
Over their head it is.
I've seen that happen a lot.
So we've we talked a little bit about, youknow, preparing for the divorce and kind of in
the early stages of the divorce.
Now we've hired an attorney, and they'vethey've started to think about bringing you
into the mix or they've you know, the theclient has called you themselves and said,
like, we're kind of in this we're in it now.
Starts stuff starting to kinda surface, and I Ineed your help.
(16:34):
What are some of the most common discrepanciesthat you've found?
I I mean, I have my opinion on this, but you'reyou're the one doing this work.
So what are some of the most common financialdiscrepancies that you find in your
investigations?
Yeah.
Typically, it's gonna be hidden accounts.
That that is probably I wouldn't say I mean, Iguess from the investigation standpoint, that's
(16:56):
the thing that we run into a lot.
Our account hidden assets, unknown accounts,and or there is the, you know, underreporting
of income or the down the economic downturnthat I mentioned before, especially, you you
you know, in the where there is one or moreprivately held businesses in the marriage.
(17:20):
And, typically, one spouse has no access,doesn't really know it really what's going on
in the business.
You know?
Then then we start seeing monkey business goingon on in that business, whether it's you know,
one example is a a spouse who had multipleprivately held businesses, but was also had
(17:43):
some businesses with their in their with theirfamily.
And they were the spouse was movingunderperforming clients to his personal
business that that was under the umbrella ofthe marriage and moving the lucrative clients
to the other businesses so that hiding hidingthe income and and that type of thing.
(18:06):
So yeah.
I mean, it's all over the board, but hiddenassets, unreported income, things of that
nature.
How do you typically find that the work thatyou do impacts the outcome of the of the
proceedings?
What I'm sorry?
How do you how do you based on the work thatyou do, like, what what have you seen?
(18:26):
Like, you know, and and what is the impact tothe proceedings?
I mean, I presume that the when once you comein and you've been able to to to make a case
for these these hidden accounts and show thecourts, like, what all the all the findings
that you have, I presume that positivelyimpacts the client experience.
So, like, what what do you usually see?
(18:46):
I mean, is it an increase in alimony?
Is it increase in asset?
Like, what what is what's what's been yourexperience?
Yeah.
So, I mean, all across the board.
You know, a lot of times we see things settlevery quickly for the good simply because, you
know well, then, you know, then then then thatmakes you ask, well, wait a minute.
Why they wanna settle so quickly?
(19:06):
Because there's something else we don't knowabout.
But but yeah.
I mean but, typically, it will it brings anopportunity to increased alimony, increased
child support, you know, division of assets,that sort of thing.
But but, yes, typically from a from a positiveperspective.
(19:27):
Nice.
Yeah.
I'm gonna ask another selfish question.
This is apparently this conversation isapparently all about me today.
I'm interested in understanding some of thetechnology that's involved because this can't
necessarily just be done with spreadsheets.
Right?
Because you you might deal with you know, youhave one account that could take you down a
rabbit hole that turns into you know, you found30 other accounts like you mentioned earlier.
(19:51):
What kind of technology are you using?
Is there like, are you using AI?
How is it what's what's this all look like?
Yeah.
So the primary technology and to answer thequestion, yes.
It is a lot of it.
A lot of it is spreadsheets.
And but we use technology that allows us youknow, back in the day when I first started, it
was all hand keying.
(20:11):
So there was it was a lot of work, and thenthere again, very expensive, you know, to build
a whole database of financial transactions andaccounts connected to each other and and all of
that sort of thing.
But now we use software that allows us thatwill take some of even the worst copy of a copy
(20:32):
of a copy of a bank statement that we feed intothe software and it will it will bring us back
a very nice clean spreadsheet of transactions.
So that helps to really alleviate the time thatgets put into the the manual labor of it.
We still have to use our own brains for our forthe actual analysis.
(20:57):
And as far as AI goes, the difficulty for usstill is confidentiality.
So we you know, it is there it's also new rightnow.
And someone will tell you, oh, yeah.
This is perfectly confidential and security isgreat.
And then in the next breath, it's like, well,no.
(21:20):
Hold on.
You know, your your client's bank statementsare out there and in the cloud and, you know,
so, you know, security issues, really.
I do foresee over time AI being very helpful inthis in this sort of situation.
But for us, the kind of work that we do, notyet.
(21:40):
I was gonna ask about some of the ethicalconsiderations that you have to deal with.
Yeah.
Yeah.
The and and and it for for us, it's primarilyconfidentiality, for sure.
But You
mean you don't wanna send somebody's bankstatements out to chat GPT?
You know, there's only so much you can redact,and and get away with it.
(22:03):
So yeah.
But not right now.
Not chat GPT for sure.
No.
No.
We use it for other reasons, but not forfinancial analysis.
A %.
I'm a I'm a big fan of ChatGPT.
I we we use ChatGPT for a lot of things, butsending bank statements to the to the wherever
it goes, which is above my pay grade for sure.
(22:23):
From a technology perspective, I I we certainlydon't trust it at this stage of the game.
Yeah.
Yeah.
This I would say this is kinda what we call thecarte blanche segment of our of our
conversation.
So if there's is there anything that I didn'task of you that I I should have asked or
anything you wanna share with our lit listenersthat would be important for them to to know?
(22:46):
Well, I I I don't know that it's it's, youknow, anything that you didn't ask, but I I
would say this, is that just from an awarenessperspective, fraud really financial fraud
really thrives in silence.
Bring that silence out into the open, and wetalked about that a little bit.
And and then the other thing is is that, youknow, you for your listeners is that they're
(23:09):
not powerless in this process.
I mean, the more that they know, the strongerthat they're gonna stand.
So like I said, make it your business to knowyour your your finances and or the accounts
that are out there and available.
Yeah.
It's a very good point.
I mean, I we we deal with that financial fraud,financial abuse all the time.
(23:33):
And, it's sad to see, but it the more work wedo in this space and and the more the more we
see it, it's just
it's Mhmm.
So many people have had that experience,unfortunately.
Yeah.
Yeah.
And and the other thing is too, I think, isthat you don't have to be a millionaire to have
(23:54):
this be a problem.
It it it can be the smallest amount of income.
It just doesn't matter.
Just make it your business.
Yeah.
We just wrapped up a case that was $18,000,000in assets with a couple jets and multiple homes
and all kinds of stuff involved.
And the and the reality is is that we saw thesame things in that case that we saw in the
(24:16):
case where I have a I have a gal who's livingin a shelter trying to, you know, rebuild her
life, and and we're trying to help her throughthe divorce side of thing divorce side of
things.
And, you know, there's not a lot of assetsinvolved, but she really needs the help and
support and a lot so many parallels in thosecases, and you're talking about, you know,
(24:38):
$250,000 in assets versus almost 20,000,000.
Yeah.
Insane.
Yeah.
It really is.
Well, Kelly, thank you so much for sharing yourinvaluable insights with us and all of your
experiences with us today.
For our listeners who wanna learn more aboutforensic accounting or need expert assistance
in their financial disputes, you can find moreinformation about Kelly's work by visiting
(25:00):
forensicstrategic.com.
You're navigating through complex financialchallenges in a divorce, remember that
Allegiant Divorce Solutions is here to supportyou all along the way.
Visit allegiantds.com for expert advice andavailable resources.
Don't forget to subscribe to our podcast formore enlightening discussions.
And until next time, stay informed andproactive, keyword there, be proactive in
(25:22):
managing your financial affairs.
Until next time.
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