ALL CASE STUDIES ARE SUMMARIES OF CASES MANAGED BY DIGITAL4NX GROUP, LTD.
(REFERENCES TO PERSONAL NAMES AND CLIENT FIRM NAMES ARE FICTIONAL)
While attempting to reconcile a secondary checking account, an internal auditor at Smyth & Smyth came across a large discrepancy. After a detailed analysis of the account, the auditor determines that over the past year nearly $170,000 could not be accounted for. Forensic accountants spent the next two days analyzing records and determined that critical financial records were missing.
Smyth & Smyth immediately called Digital4nx Group to request that they evaluate PCs for recovery of the missing records. All PCs potentially containing accounting data were ceased from usage until Digital4nx Group arrived. Digital4nx Group’s first forensic examiner arrived on the scene and determined a prioritized imaging plan; balancing the preservation of critical evidence with the need to keep Smyth & Smyth operating efficiently. Within one hour, four forensic examiners were imaging ten PCs and two servers.
The initial results from the analysis started rolling in. Server application logs indicated unapproved user rights modifications and the addition of three illegal user accounts to the Smyth & Smyth accounting system. Two PCs were identified to have used at least one of the illegal users accounts and a third PC was identified to have used at least two of the illegal accounts. Additionally, it was determined that all three accounts found on the server were provided with unrestricted access to most accounting functions.
Significant amounts of deleted accounting data were recovered from a total of four PCs and immediately provided to forensic accountants for analysis. Two users were identified to be using the illegal users accounts. Substantial evidence was accumulated indicating that two employees had a fraudulent check writing scheme that was systematically pilfering money from two of Smyth & Smyth’s checking accounts. Smyth & Smyth management was notified and both employees were put on mandatory absence with pay.
Digital4nx Group , in combination with forensic accountants, reported significant evidence implicating the two Smyth & Smyth employees, as well as one outside party with an embezzlement scheme. $134,721 was immediately recovered. Additionally, both employees were terminated and all three individuals have pending criminal charges.