Asset recovery is not just a legal process — it is an investigative one. Before assets can be recovered, they must be found. Finding assets that have been lost, abandoned, hidden, or misdirected requires forensic accounting: the application of accounting, auditing, and investigative skills to trace financial transactions and identify assets.
Poulson Law has represented some of the largest financial institutions in the world in connection with resolving forensic accounting, asset recovery issues, and reclaiming unclaimed and abandoned property.
What Is Forensic Accounting?
Forensic accounting examines financial records to identify, trace, and document assets and transactions. Unlike a traditional audit — which verifies accuracy — forensic accounting is investigative. The forensic accountant looks for what is hidden, misstated, or missing.
In asset recovery, forensic accounting serves three functions: identification (finding assets), tracing (following movement through accounts and entities), and documentation (building the evidentiary record for legal claims).
How Assets Become Hidden
Corporate Complexity
Complex corporate structures scatter assets across the corporate family. After mergers and restructurings, assets may be held under entity names no longer in active use — invisible to standard searches. Our approach begins with corporate reconstruction — mapping the full family tree.
Commingling of Funds
When funds from different sources are deposited into the same account, tracing individual assets becomes extremely difficult. Forensic tracing techniques can follow commingled funds and establish which portion belongs to the claimant.
Transfer Disguising
Assets may be transferred through multiple accounts, entities, or jurisdictions to disguise origin and location. Our forensic expertise peels back the layers and follows the money.
Record Destruction or Loss
When records are lost through employee turnover, relocations, or disasters, institutional knowledge is lost with them. We use bank records, tax returns, public records, state databases, litigation records, and industry databases to reconstruct lost records.
The Forensic Accounting Process
Phase 1: Information Gathering
Gather all available information — corporate records, financial statements, tax returns, bank statements, contracts, and other documents. Use alternative sources to fill gaps.
Phase 2: Corporate Reconstruction
Reconstruct the full corporate history — name changes, mergers, acquisitions, restructurings, predecessor entities. This creates a comprehensive list of entity names under which assets might be held.
Phase 3: Systematic Search
Using the entity list, conduct systematic searches of state unclaimed property databases and other public records. Our specialized technology and information sources go beyond public databases.
Phase 4: Documentation and Claim
For each asset, compile documentation to prove ownership and file claims. Our experience with state offices ensures claims are prepared correctly the first time.
Phase 5: Recovery and Distribution
Coordinate recovery and distribution. We maintain documentation for each claim, tracking progress and providing regular updates.
Forensic Accounting in Litigation
Beyond asset recovery from state trusts, forensic accounting is essential in fraud claims (quantifying damages, tracing proceeds), breach of fiduciary duty (tracing misappropriated funds), bankruptcy (identifying undisclosed assets, tracing preferential transfers), and divorce/partnership disputes (ensuring complete asset accounting).
The Intersection of Forensic Accounting and Law
Forensic accounting is most effective when integrated with legal strategy. The forensic accountant identifies and traces; the attorney uses that information to pursue legal recovery. Poulson Law's unique advantage is the integration of these disciplines.
Frequently Asked Questions
How much does a forensic investigation cost? Depends on complexity. In many asset recovery cases, we work on a contingency — you pay nothing unless we recover.
How long does it take? Straightforward searches may take weeks; complex investigations can take months.
Can forensic accounting find assets hidden offshore? International recovery is more complex but not impossible. We have experience recovering assets across national jurisdictions.
Can you find assets hidden decades ago? Yes. We recently recovered an asset valued at $1.4 million unclaimed for 30 years.
Find What's Been Lost
If you suspect your company has lost, abandoned, or hidden assets, forensic investigation is the first step. Contact Poulson Law at 607-547-1195.
