Forensic Accounting in Colorado Divorce: Finding Hidden Income and Assets with Doug Chambers | Episode 241

Forensic Accounting in Divorce: Following the Money with Doug Cash

In this episode of Divorce at Altitude, Amy Goscha is joined by forensic accountant Doug Cash to discuss how forensic accounting fits into divorce cases, especially when one spouse knows far more about the finances than the other. Doug explains the difference between tracing and following money, how forensic accountants differ from business valuation experts, and why getting a forensic accountant involved early can make a major difference in a divorce case.

Guest Information

Doug Cash is a forensic accountant with Eide Bailly whose background is unusually rooted in law enforcement and financial investigations. He spent nearly three decades in law enforcement in New Mexico and Arizona, including work as a fraud detective with the City of Mesa, as a special agent for the State of Arizona investigating insurance fraud, and in anti-money laundering and anti-terrorist financing investigations for JPMorgan Chase.

Episode Highlights

Why forensic accounting matters in divorce
Amy and Doug discuss how many divorce cases involve a major imbalance in financial knowledge. One spouse may have managed the business, accounts, and records, while the other has little idea where the money went or what the actual financial picture looks like.

Doug’s unusual path into forensic accounting
Doug shares that his professional background began in law enforcement, not accounting. He started as a police officer at 18 later moved into fraud investigations, worked insurance fraud and anti-money laundering cases and eventually transitioned into forensic accounting.

The difference between a forensic accountant and a business valuation expert
Doug explains that a business valuation expert is usually working from financial statements profit and loss statements, tax returns, and other summarized documents to form an opinion about what a business is worth.

Why source documents matter
A recurring theme in the episode is that source documents are critical. Doug explains that tax returns and sworn financial statements are only numbers on a page unless someone checks the documents underneath them.

How forensic accountants can help shape discovery
Doug notes that forensic accountants can be useful before discovery is even served. By helping attorneys identify the right documents and requests early they can make the process more efficient and target

What is Divorce at Altitude? 

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado. 

To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here.  If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.

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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.

Transcript

Amy Goscha (00:00)
Hi, welcome back to another episode of Divorce at Altitude. I'm Amy Gosha, and I have the pleasure of having Doug Cash with me today. How are you, Doug?

Doug Cash (00:08)
You know, I'm doing fantastic. I'm seeing swimmers finally kind of arriving in Colorado and I'm a transplant from the desert. So I was kind of enjoying that weather, but I have to admit I was missing the snow.

Amy Goscha (00:18)
Yeah, if you could just give the listeners kind of a little bit of background as to who you are and how you got connected to the divorce world and then we'll jump into the topic for today.

Doug Cash (00:27)
Sure. My background is considerably different than a lot of the forensic accountants you'll talk to. My background is actually in law enforcement. I spent about 28 years as a police officer in New Mexico and Arizona started. I was actually one of the very young certified police officers in the country at 18 and a half. I started in 1978 as a police officer and ended up going into the fraud world in 1992 as a detective for the city of Mesa, Mesa, Arizona.

⁓ was one of the first original six detectives for that group. And we helped build that. I then left that, ⁓ left law enforcement, went to work for the state of Arizona as a special agent, working insurance fraud, and then also did money laundering and antiterrorist financing investigations for JP Morgan chase for a while and ended up finding I Bailey by accident in regards to it and came to them. It'll be actually be 19 years come March and got into helping people.

in regards to financial issues. And one of the big things we found ourselves doing was in the divorce matter, people having to understand what happened to the money, where did it go? There's a difference in tracing and following and helping people determine actually what their income is and what their expenses are and identifying when money's going places they don't have. And to be able to assist people with that, everybody kind of uses the term closure in regards to basically gaining an understanding.

One of the things we like to do is help bring clarity to what happened in regards to it. Did they actually hide money? Did they not hide money? In trust matters, are they being used correctly? In the states, the same thing. In regards to it, just making sure that the money is accounted for and is being used properly. Excuse me.

Amy Goscha (02:02)
Yeah, and I mean, everyone, I'm a divorce attorney and how a lot of people come and ask me, know, like in cases, a lot of times I find, and I don't know if cases that you work on, Doug, but a lot of times someone knows a lot about the finances and then the other spouse doesn't know much at all. ⁓

Doug Cash (02:20)
We find

that a lot is that ⁓ we trust. It's funny because in in a family society, you have to trust people. But unfortunately, sometimes people take advantage of that trust, just like they do in businesses. And to be able to understand it in regards to it kind of thing is that, you know, my wife's taking care of that. My husband's taking care of that. I've got a business to run, you know, those kind of things. So you kind of hoping that they're doing things right. And unfortunately,

When things start going bad ⁓ in a family situation, they can go bad in a hurry. And that's, unfortunately, folks like you and I get involved to try to help them get through that mess of what's happening. I get called on a regular basis, probably four or five times a week, in regards to, you help me understand what happened to our money? Can you do this? And we certainly can if the situation is right.

Amy Goscha (03:09)
Yeah, and I think another thing that would be helpful for listeners is I think that sometimes people come in and say, OK, let's hire a business evaluator. The issue is that business evaluators sometimes will take on face value, like what does the P &L say? And they're not going to dig in like someone like you. So can you explain, just in general, just because I think it's something that is really important, what is the difference as to what you could do versus just hiring a business valuation expert?

Doug Cash (03:36)
You know,

I greatly appreciate that question, Amy, and because there's a big difference in it in regards to it. That what I do is based on data. It's based on facts. We build things from the bottom up, right? We have to be able to reconcile information in regards to business valuation looks at the profit and loss and the information that's provided to them in regards to that. Many times I'll walk into a situation and they'll hand us their tax returns or the profit and loss statements.

And this is going to sound really funny. That doesn't mean a whole lot to me, because I need to know where those numbers come from. I need to see, they actually put $10,000 into the bank? Is there a deposit slip? Is there withdrawals? How did that money was spent? Was there a spend down of that money in regards to it? So ours, as a forensic account, is rebuilding it from the bottom up to understand exactly what happened to money, whether you're tracing it or following it, which has two different aspects.

where evaluation is looking at the financial health. It's almost like a financial statement audit. You take the information that's there. You don't necessarily delve into it. And I can tell you that I have a colleague here that we work together on those matters a lot, is that he'll say, wait a minute. If you have concerns about, especially in a business, that you're not sure the money's right, I really shouldn't be doing your evaluation until you make sure the numbers are right. Because if the numbers.

What's the old saying, Amy? Garbage in, garbage out. If the numbers are bad going in, then their valuation is not going to be as good as it should be. So as long as you make sure the numbers are correct for somebody like us, you'll be to do that. Also, a business valuation, this is going to sound real funny. They're making an opinion on what they believe the business is valued at. They use different formulas. A forensic accountant, everything is based on the data. So it's not necessarily an opinion.

Amy Goscha (05:20)
Right.

Doug Cash (05:25)
Either it did take place or it didn't take place. So I'm not going to guess at what your money is. I'm going to tell you what it is. Where your valuation, that's why a lot of times you have two or three different opinions on an evaluation. And a lot of times I've seen dual, you have experts on one side, the other side. Each one of them has an opinion about it. And that's where they end up in court in regards to it. The vast majority of time the work we do stands on its own because there's data behind everything.

And yes, you made a million dollars, and no, you didn't make a million dollars, or yes, you spent it, or no, you didn't.

Amy Goscha (05:55)
Yeah.

And I think for listeners, what would be really helpful and kind of a scenario that Ryan and I use throughout the podcast is we use, their names are Eric Wolfe and Melanie Wolfe and they're a husband and wife and they're getting divorced and Eric Wolfe will say owns a business. So if Melanie Wolfe were to come to you, can you explain what's important? Are you coming in at the very beginning? Talk to the listeners.

about how important it is as to when you come, you know, when you get involved.

Doug Cash (06:29)
We need to

be involved as early as possible, right? Because obviously you have deadlines and you have the ability in that we need to be able to have the time to understand especially what's going on in the business. We need to talk to people. We need to understand it. The sooner we get involved, the easier it is for us to think. And if you've got time schedules and things that are deadlines, we need to be aware of those so that we can make sure we provide the product back to you at a time.

That also goes along in communication while this is going on. You can't leave the forensic accountant feeling like they're an island onto themselves. You just can't dump information on them and then not talk about it. One thing people make a mistake sometimes, and also this is attorneys at times, Amy, is they'll send you a, I'm gonna send you discovery, okay? Well, the issue is, if somebody like me, you send it, I have to look at everything, which means that I have to rename it and I have to go through it.

Amy Goscha (07:11)
Great.

Doug Cash (07:21)
which means it's going to cost you more money to do that. Because I can't get up on the stand and say, well, did you look at this PDF? No, I didn't. Why not? Because I didn't think it was relevant. Well, did you miss these pages? Because there could be one or two pages in a document that's relevant to what we're looking for and what we've been hired to do. And if we don't look at everything, then we can get that issue on the stand. getting right at the beginning, keeping us informed on deadlines.

hearings, those kind of things, and making sure that we have all the information that we need and setting that scope of work that we need specific. like for a forensic accountant, as you well know, and I'm sure most of your clients do, you can only go back seven years. It's expensive to go back seven years. Because every line on a bank statement, credit card statement, invoice is a transaction. Every one of those transactions has to be reconciled, which means you have to see where it goes to, where it went, and what documents, right?

Amy Goscha (08:03)
Right.

Doug Cash (08:13)
So when you can set your scope, whether it's 18 months, three years, whatever it is, to understand this is what I'm going to look at, and anything outside of that is outside the scope. This is all we're going to look at. But yet, if you don't narrow the information down that you're sending us, and you give us five years worth of it, we've got to go through that five years to find that three years that you want us to look at.

Amy Goscha (08:33)
Yeah, yeah, exactly. And that is one.

A conversation I have with clients is that forensic accounting can be very expensive, but it is very necessary. So say that you get in, say I'm representing Melanie Wolf and I understand that she doesn't know anything about the finances of Eric and there's a business and call you and Melanie comes into your office. Can you just talk a little bit about your process and how getting involved early on, what does that actually look like?

Doug Cash (09:00)
Well, part of it is that we want to get to know the client just like you do. We need to understand what's going on behind the scenes, if you will. What are, for lack of a better word, what red flags did they see? What concerns did they have? What do they know about? What accounts do they know about? What are their everyday expenses? What are the normal activities they go through? If kids, what are their programs? What are the things they're involved in? What are they paying for? We need to understand all of that.

at the beginning so that we can narrow down and understand when we start looking at the transactions that this appears to be in a normal course of living in regards to it or why it does. One of the situations, this is years ago, that we talked to a client and in regards to it, we went through it, and it's going to sound real funny, we were going through the husband's credit card statements, we found one credit card transaction for $35.

And it's like, why is there one transaction for $35 to this storage company? And well, where is the storage company at? Well, it was in California. And I thought, that's really kind of weird. One of the things I got, huh, that's just strange. Why did it do it? Well, we provided that information to the client. Unbeknownst to us, the client actually went to California and found out that it was a climate control self-storage business.

Amy Goscha (10:03)
Yeah.

Doug Cash (10:22)
that her husband had rented a place and had been paying cash. But one month he didn't have the cash, so he put it on his credit card. And they were huge collectors. There was a huge amount of collectible memorabilia that he had hidden inside this storage unit that now she found. And it became a discussion that ended up being settled outside of court. And that was all uncovered from that one transaction of $35. went, this doesn't make any sense.

Why is this happening? So that's how detailed it can get in regards to it. And the other thing, people always think about, well, how much cash? And people have to remember that if you think about your own checking account, when you go to a bank, you go make a deposit at a bank, you can make a deposit and get cash back. That cash back is not going to show up in the bank because it's just going to show the deposit. And you're going to know that that cash has been received or siphoned off or however you want to put it.

Amy Goscha (10:50)
right.

Doug Cash (11:15)
unless you start looking at the documentation, which is the deposit slips and things like that, to understand it. It's all that piecing it together. So the sooner we can get involved to be able to do it, and a lot of times we can streamline things and understand directly, maybe we just look at this aspect instead of a huge aspect. Maybe you only need to have this much that we can do very quickly that reduces your costs in regards to it and understand it, as you said, that the deeper we get involved in it and the longer it goes on,

Amy Goscha (11:36)
you

Doug Cash (11:44)
the more expensive it can get. Because unfortunately, you're paying for our expertise and our understanding and to be able to get up and to be able to be your expert witness on the stand to be able to testify to it. As a certified fraud examiner, everything that I produce, I have to be prepared to get up and testify to it in court. I have to do it. Do we make mistakes sometimes? Everybody does. But you have to be honest about those mistakes. And you have to be transparent. So that's why you have to make sure you take the time to get it right. Hope that helps.

Amy Goscha (12:10)
Right. I think just

getting, yeah, that really helps. And I think, you know, to listeners, to attorneys and

Clients getting involved early just helps someone even like you understand the issues and to understand what you're looking for. Instead of like you said, being dumped with discovery. I'm guessing that you can, let's talk about the sworn financial statement. That's one of the first financial documents that I'm trying to get together. Like when Melanie's coming into my office, I'm like, do you have tax returns? Do you have this? Do you have that? Can you talk about the sworn financial statement and are there things that you get involved with?

Doug Cash (12:34)
Mm-hmm.

Amy Goscha (12:44)
with, you know, like regarding this one financial statement or no.

Doug Cash (12:47)
Well, of that

sworn financial statement, Amy, is almost like a tax return. It's just got numbers on it. If you're concerned about those numbers, for instance, for child support or income or whatever, that's just a number. You still have to tear that number apart to confirm it, right? So if they're turning a financial statement in and you're going like, wait a minute, he's claiming he only makes $3,000 a month. I know he makes $30,000 a month. OK, well.

Amy Goscha (12:54)
Right.

Great.

Doug Cash (13:14)
for us, we then have to go back and look at the source documents to show that, wait a minute, you're correct in regards to it. And this just popped into my head. A lot of people think, there are tax returns. Well, you have to remember tax accountants are designed to reduce the amount of your taxes. That's their whole job. Taxable income. Well, in our world, that's not necessarily what the actual income is. The actual income is different because your tax people are looking to reduce that so you don't have to the taxes.

Amy Goscha (13:29)
Great, you're excellent.

Doug Cash (13:41)
I don't like paying any more taxes I have to. don't either. Right. So that's kind of the issue with tax returns is that even if they're done correctly, it's not necessarily a true aspect of what the income and expenses are, just like your foreign financial statements. If you have concerns about that, the original documentation needs to be looked at.

Amy Goscha (13:41)
Right.

Yeah, and I think the other thing that I find is you know, like knowing what documents to ask for, but sometimes it's very difficult to get the other side to like Eric's attorney to, you know, get me the, you know, like the working papers on the tax return or, you know, like, so can you talk a little bit about that? Like, what are some, like, what are some things that are important to know about, you know, getting documents?

Doug Cash (14:12)
Yes.

Well, original documents or source documents are always the best, right? Because they can't be, they're not altered. Many times you have to go directly to the financial institutions, the bank, get them directly from them in regards to it. A lot of forensic accountants, if it's a business involved, and we've done it numerous times, we are able to go actually go out to the business and set up there and put a, we have portable scanners we travel with that we can scan information in regards to that.

Amy Goscha (14:36)
Right.

Doug Cash (14:52)
we can actually help them download information from the accounting system so that we can do our own exporting and run our own reports and try to limit the interruptions in the business in regards to that. But the source documents are always the best in regards to it because they're the ones that aren't going. What's the old saying? People lie, documents don't, which is true in regards to it. the more you can get it. And if that means that you've got to go through for us,

Amy Goscha (15:13)
Right.

Doug Cash (15:19)
You go sit in an office and go through file cabinets and pull out invoices for certain bills at a certain time. Or you help put a demand letter together or a request letter for vendors that you send out to vendors and say, could you be kind enough to provide us copies of all your receipts or invoices that you've been paid, blah, blah, during this time frame for them. And we're working on behalf of the client, this kind of thing. That works sometimes in regards to it. But a lot of times, it's just

going through that, unfortunately, the demand and the request and the submittal for you folks to the courts through discovery to be able to obtain that information. Because we have to have the original documents. And what happens sometimes is that pages here and there get lost. So we actually have to inventory all that to make sure we actually have all the pages, to make sure that they didn't miss a page someplace in regards to it. Because nothing worse than missing a page and then you get called on that on the.

Amy Goscha (16:04)
Right.

Doug Cash (16:11)
Stan's like, did you see this page? No, I didn't. Well, how did you miss that? Well, I missed it. You know, I'm sorry. You kind of think, would that change it? It could, you know, kind of thing.

Amy Goscha (16:20)
Right, yeah, absolutely. Can you talk about, like you said, it's not a good thing for attorneys or clients to dump discovery on you, because you have to go through everything. Can you or have you assisted in the drafting of discovery, along with an attorney to make sure that you're getting the right documents? Because I could see that being very helpful.

Doug Cash (16:39)
Yes, we have. And

in fact, it's nice to have that. That's being at the beginning, right? Maybe you have sales documents, closing documents for a mortgage. You have certain information from investment accounts, brokerage accounts, all those kind of things to make sure that you get all that specifically worded, talk about it. Maybe you have a question about, I think they're doing this.

Amy Goscha (16:51)
you

Doug Cash (17:01)
What kind of documents would you need to be able to show that? We can discuss that, go, hell, why don't you ask for that? One of the things, again, just popped in my head, a lot of times people don't think about this, is simply getting a copy of the individual's credit report, a lot of times can be very helpful to show where inquiries are, and those kind of things, because if it's associated with an address, or a name, or this individual, you may be amazed with what's there. So in discovery, if you can,

Amy Goscha (17:15)
Great.

Doug Cash (17:27)
We always strongly suggest that you get a copy of the credit report for the individual and the business, so that you can see what's associated with both. may be perfectly there. Wait a minute. Where did this account at Wells Fargo come from? I don't know anything about that. They admit there was an inquiry at a car dealership. Did he buy a car there? Kind of thing. Maybe they inquired on his credit, but then he paid cash for it.

Amy Goscha (17:34)
busy.

Doug Cash (17:54)
So it doesn't necessarily show up as a bill, as a loan on it. But he had an inquiry that he was checked in it because they wanted to see if his credit was good to be in case he wanted to do a car or a home kind of thing. When I worked at Chase, I actually saw people buying cars and homes on their credit card because they wanted the points kind of thing. These people obviously have lots of money to be able to do that.

Amy Goscha (18:15)
⁓ yes.

Doug Cash (18:20)
But I mean, if you have a husband or a family that has a black card that has no limit on it, you never know exactly what's being done on that credit card until you look at it, right? They may have purchased something you don't know anything about kind of thing. Maybe they bought a property somewhere in Montana. it's like, wow, OK, you put it on your credit card. You don't want the mileage kind of thing. I've seen that happen too.

Amy Goscha (18:31)
Right. Yeah.

Right.

Yeah, and this is kind of getting into the nitty-gritty, but it's, I think, important. So when you're looking at credit reports and there's different bureaus, what's the best? What do you request? Do you request that it's like a credit report from all three bureaus? OK.

Doug Cash (18:54)
Yes. Yeah, try to get

all three. And a lot of times, as you go on, many times you can go on, creditreport.com I think is one of them. I think you can get it free. You can go on there and do it. But you always want it for all three. And the reason that is is they actually look at things differently. Each place does, right? That's why there's three different scores in regards to it. Because each one of them looks at things differently. They record it differently and things like that. Also, if you happen to see, I'm sure you thought about, if you're seeing loan

Loans, car loans, mortgage loans, make sure you get the applications for those loans. Because people are going to, normally they don't lie on an application where they're trying to get credit, right? They may actually embellish in regards to it because they want to make sure they get it. So a lot of times they will talk about collateral and stuff that they have that they didn't know about, but they wanted it on this application so they could get this loan.

Amy Goscha (19:47)
Right, yeah, no, I definitely have seen that and it's so helpful. Well, that's really helpful. We've talked about getting involved early, the of the sworn financial statement discovery. Can you explain the difference to people between what is tracing, following money versus tracing money?

Doug Cash (20:05)
Everybody

talks about, you always want to follow the money. Well, following the money is basically you're taking it from the bank account and going out. Tracing it is going the other way. You have an amount of money in an account. You want to see where it came from. So you start going backwards. One of them is starting from your account going out that's following the money.

Tracing it is finding money in an account somewhere and tracing it back to where it came from. So to see if it actually came back from your account or it came from some place else in regards to it. So following is from your account out, tracing it from the money back. There is a difference in that. And some of them are tracing money. A lot of times it is more time intensive than following it.

Because following it, you can follow it going out, right? Tracing it sometimes, if they're bouncing it between accounts and they're moving it around, you've got to follow that through that. And that also includes in cryptocurrency, that they may be bouncing it from wallet to wallet. So tracing it back doesn't necessarily always happen quickly. And you have to take the time. So it's just the opposite direction in them. Following it is from your money out. Tracing it's coming back.

Amy Goscha (21:21)
Yeah, and kind of talking about crypto, I'm glad you raised that issue, though, because we're now in an age where we have AI and we have cryptocurrency and cold wallets. Is there anything that you've seen recently in cases that's really different and something you want to highlight about crypto or just in general what you're seeing?

Doug Cash (21:43)
Well, I'm gonna be real honest with you. I don't have a lot of expertise in that. I have two colleagues that do that on a regular basis in regards to it. I understand it in regards to the complexity of it. In fact, I'm getting ready to go to some training on it. So I understand it even better in regards to type of deal. But I know that I used to think credit card numbers were long and then you get into these wallet numbers and they're huge and things that go about it. What I've been told is that it...

Amy Goscha (21:57)
Yeah.

Doug Cash (22:11)
What's happening is that people are bouncing on them around more than they used to be. They're actually moving them, kind of an investment kind of thing type of deal. And that is what's taking longer now to trace. And people used to just kind of put it there and to kind of leave it. Now they're bouncing it around trying to conceal where it's going kind of thing.

Amy Goscha (22:19)
Right.

Wow, that is interesting. just think that, yeah, it gets pretty complicated. These days, when someone engages you as a forensic accountant, ⁓ we talked about it's based off of data and opinion. But can you talk about broker value versus a profit and loss calculation or lost profit calculation?

Doug Cash (22:50)
Okay, that's

another aspect of forensic accounting that is based on an opinion in regards to formulas and stuff they do in regards to if it's a lost profit, know, valuing in regards to what was the revenue in stream and those kinds of things. That's another type of opinion. We have colleagues that do, I have colleagues that do that. That's not necessarily what I do on this type of thing, but that's another one of those opinion based things that you have to understand.

is that it's going to be based on the information that they're given in regards to it. They're not necessarily going to go look at the source documents or confirm the numbers themselves are real. They're going to take what they have in your profit and loss statements, your income sheets, those kind of things, your balance sheets, and that's what they're going to base their calculations on. They don't normally go back and rebuild it. Just like an evaluation, it's based on the information they're given in regards to it. That's where another, those folks are the ones that are in court more.

about their opinion because they're making an opinion. I think they would have earned this amount of money or their loss was this. And the opposite says, no, we disagree because you should have used this formula or not. Where ours is, well, this is how much money came in. This is how much money went out. You can't argue about that. Now, you can argue about whether it was right or wrong in regards to it or whether it was invested correctly, those kind of things. That's another opinion in regards to it. But that's another realm of forensic accounting.

Amy Goscha (24:08)
Yeah, one, we have listeners who are.

you know, attorneys, listeners who are clients, other experts. One thing that I think would be helpful even for me to understand is, I mean, I think at some degree, every single divorce case could benefit from like a forensic accountant or someone that has your expertise, but I know it can be very expensive. you know, as an attorney or someone who is about to go through a divorce, what are some things that, do you have any like advice as to like, you know, like things that you should be looking

for when you're like, okay, I really do need to involve, you know, someone like you.

Doug Cash (24:45)
Well,

probably the biggest thing is if you're not sure what's happening to your money, all of a sudden you think that you have money and it's not there in a business or litigation or whatever, is that, a minute, I don't understand what's happening, right? I don't know where it's going. Those are those questions that you should look at in regards to it. And yeah, it can get expensive, but also you have to remember is that you can tailor that. We do something we call categorization and summarization, which is basically what we do is just take like the bank statements.

Amy Goscha (25:10)
Okay.

Doug Cash (25:13)
We use technology, and all we do is sort it and categorize it by category and give that back to the client so they can see this is how much money came in, this is how much money came out, and these are the areas that it was spent in. And they can look at that and go, well, that all looks normal. I can understand it. So you have that. But then you can start peeling that onion away and go, wait a minute, I want to know more about this vendor. I want to know more about that vendor, those kind of things.

So now you start peeling it, right? All of that can be done very quickly, and it's not real expensive to summarize it and categorize it for you. And you just give it back to the client and go, hey, here you go. Is there a specific area you want us to look at more? Is there specific transactions and all kinds of that? Maybe that's enough for you and your client to go, wait a minute. We see how much is coming in. It's obviously coming in. So now it's gone out. This is how we spend it. Now we want to ask him about this. We want to ask him about that.

Those kind of things. Maybe that gives you enough for your deposition and your discussions. OK, why did you send $5,000 to this company? Where is, wait a minute, you spent $10,000 at K's. Where's that jewelry? What did you buy at K's? Those kind of things. You can see that very quickly by just summarizing and categorizing that information. Maybe that's a start. Maybe that's all you need. And many times, that is a lot less expensive than a full-blown engagement.

Amy Goscha (26:14)
Right.

Right, yeah.

Doug Cash (26:34)
and delving into and report writing. Maybe that provides enough.

Amy Goscha (26:37)
That's great. mean, because I think that at least among attorneys who don't deal with working with someone like you on a regular basis, we just assume that it's super expensive. So that's really great to know that there are things that you can do that can really help us that can be tailored. that's really. And like you said, getting involved in the beginning to tailor that.

Doug Cash (26:58)
Right.

I'm going to kind of get an example. I'll use this, right? When you talk about a bank statement, and let's say that you have 10,000 transactions. You have 10,000 lines, right? The normal individual, if you do it by hand, can do 80 to 100 transactions an hour by spreading it, right? So you figure if you've got 10,000 transactions and you're doing 100 an hour, how many hours is that going to take before you get through it manually, right?

Amy Goscha (27:25)
Mm-hmm.

Doug Cash (27:25)
And that's where people are doing it kind of on their own. Now, if you hire someone like a forensic accountant that can take those bank statements, use technology, instead of doing 100 transactions an hour, they can do 1,000 transactions every five minutes to be able to get through it. You can see the time that it's going to save and the money it's going to save. Yes, you're going to pay for that time. But instead of spending 120 hours yourself, you spend 30 hours for someone to go through it.

The time saving and the ability to be able to do it and the clarity of it is a huge difference in regards to it type of thing and you get a clearer picture of it. So that's kind of the way to look at it.

Amy Goscha (28:02)
Yeah.

Yeah, that's that is helpful. I think what would be like, I think what would be helpful to listeners as well as I've been talking about kind of the hat of I'm saying Melanie Wolf, who doesn't have a lot of knowledge on the finances, but say that I'm representing Eric Wolf, who owns the business. And I come in and, know, like we have cases sometimes where they maybe haven't filed taxes or they're like, you know, they don't have a PNL that is a good working PNL. Do you ever come in and help?

Doug Cash (28:13)
Hmm?

Amy Goscha (28:32)
you know, with that portion of it. Like I know you're not like us with that portion of it, I guess.

Doug Cash (28:38)
Right. I guess

that's the easiest way to put it is yes, we have Amy, but what we would call that is basically reconciling their accounting to make sure that they have all the records, make sure the numbers are correct so that their real accountant, I hate to use that term, but the people that going to do their actual bookkeeping and things like that know that the information is correct, right? We can make sure that it's inputted into the accounting system correctly, that they didn't miss a deposit somewhere, that all of that information is correct.

A lot of times we'll get called in and go, hey, I just want to make sure that I didn't miss something. Did I not put something or type of deal? And we can certainly go in and do that in regards to it. And sometimes we've actually been hired is that they're claiming that I make x amount of money, but I don't. Can you confirm what I've made? That's where we go through the same process either side and said, OK, we want to look at you're running this business. We need to see all your bank statements.

Amy Goscha (29:22)
Yes.

Doug Cash (29:32)
We need to see all your invoices. We need to see all of this. We need your accounts payable, printouts, things like that, to make sure that everything matches up. then you go that we're seeing that you're not taking cash out, or not seeing that your distributions are going out that you're not telling anybody about. This is the amount of money you're having. So now you're saying that you took $30,000 out of your business. We can show that that $30,000 went into your personal account.

It didn't go someplace else, right? So now we're showing that, your business is exactly the way you said it was. I'm not hiding anything.

Amy Goscha (30:07)
Yeah, because I'm thinking about taking a proactive approach as Eric Wolff's attorney and coming in. And I'm about to do a sworn financial statement. And then the other attorney is going to be Melanie Wolff's attorney is going to be asking me, well, where are these source documents? So I think it would be really helpful to have someone like you come in and help me with that.

Doug Cash (30:26)
Yeah,

I mean, either side, we're able. We always say conversations are free. We can tell you either side what we can do in regards to it. We can either confirm all the information that you're providing is true, or we can go back and say, well, yeah, the information you gave is true, right? One side, it doesn't matter which side it is in regards to this is what happened, and this is what's there. And they're being honest or they're not being honest. They're being transparent or they're not. We just talked about earlier.

I did presentation on transparency and embezzlement. It's transparency in a divorce. Are you being transparent or not? Are you hiding things or not? Right? No, I'm not hiding anything. Here you go. Yes, they are hiding things. Where are they? Right? So either you are or you aren't.

Amy Goscha (30:58)
Right. Yeah.

Right, yeah, exactly. you talked about, you you testify in court. We know that you can come in as an expert. Do you also help out, a lot of, most cases go to mediation. Do you ever help attorneys or clients prepare for mediation? You know, like, what type of...

Doug Cash (31:21)
absolutely. Yeah, absolutely.

Because we talked about the summarization. That works great in those discussions, right? In regards to it, look, this is what's going on in your accounts. This is where you might want to ask your questions. Look at these areas here that are concerning. Let them explain it to you. Remember, it's questionable, so question it. You're not saying it's right or wrong. It's like, wait a minute, this doesn't make any sense to me. I need you to explain this to me. Why did this happen?

There could be a legitimate reason that they forgot to talk about or something else. But look, I need to understand this. Let's look into it in regards to it. And things that we might see and go, you know, this is kind of weird. We don't see a lot of this going on. Maybe you need to ask about that. And I'd ask about this. And I'd ask about that. And then maybe that helps you set out in your mediation and go, OK, we have questions. We'd to have some answers. Kind of thing.

Amy Goscha (32:10)
Right. Yeah.

Other question I have is, ⁓ you know, like when I'm going to court, I have summary exhibits and then I have to have all the source documents. Otherwise the summary exhibit is going to get thrown out, you know, and it's not going to get admitted unless it's like demonstrative. My question is, is do you help with preparing summary exhibits? Because if I, you know, how my paralegal do it, like you're saying 80 transactions or 80, yeah, transactions an hour, you know, like I could see a utility and

you know hiring someone like you to help me with like those summer exhibits.

Doug Cash (32:45)
Basically,

what we would do is, any time for a forensic account, they're going to put a spreadsheet together. But if there's any specific thing that deals with that, they will attach exhibits, usually bait stamped, in regard to. For instance, if a check or an information is put into a report, we actually have a copy of that also attached to the report. And we have that set aside that if they say, OK, well,

This is what you did. This is where we got it from, right? That's why we have copies of it and be able to do that. And we can help, know, bait stamp those, those kind of things to be able to do that. But any time, any forensic accountant that provides you a report that you're going to use in court should have all that information attached to it that they can then testify to. Yes, this is that the information I use. This is the information I transcribed from here. This is where I got it. And this is how we say this is where it was secured. No one else has access to our information.

and it's all safe and this is what we provided.

Amy Goscha (33:42)
Yeah, yeah, that's really helpful. Because I'm finding I spend a lot of time on like summary exhibits and having staff like try to put those together. And I think that it would be really helpful, you know, because if it's your expertise looking at all of these statements, you know, it might be helpful to work with some.

Doug Cash (33:58)
In

my former life, I had the pleasure of spending three days on the stand in federal court once. And I found out very quickly that as the investigator in the federal court, it was my job to put all of those exhibits together, three of them, right? One for the defense, one for the court, and one for the prosecution, right? So I spent a lot of time making sure all three matched and all the numbers were the same and all those kinds of things, which as you know is time consuming in regards to it.

Amy Goscha (34:24)
Yeah.

Doug Cash (34:25)
I mean, if you're talking about a large dollar dispute or those kind of things, it might be best if we get someone like us in regards to it. also, again, that could end up being expensive.

Amy Goscha (34:34)
Yeah, yeah, that makes sense. Well, great, Doug. It's a pleasure. Thank you for coming on today. Do you have any last, I guess, things that you think could be helpful, you know, to someone who's looking to hire you? And then I want to end with, how can people get in touch with you?

Doug Cash (34:51)
Sure. Always get the first indication that you're concerned that something's wrong. Have a conversation with a forensic accountant. Most of us will tell you conversations are free. We'd rather tell you we can't help you or this is what you're going to need than getting dumped on and say, I need this by tomorrow and we can't do it. We're busy just like everybody else is. And the one person.

Amy Goscha (35:13)
Right.

Doug Cash (35:15)
and say, you hire me, Amy, you're not going to be my only client. So we have to put it together. The one thing we talked about, I should have mentioned earlier, is that please don't piecemeal things to us. The more you can give us at once so we can work on it, the cheaper it is for you and it's faster for us. Because if you send us a bunch of information and it's missing stuff, we have to put that aside till that new information comes in.

Amy Goscha (35:18)
Right.

Doug Cash (35:40)
So then we have to reorganize ourselves back to the mindset of where we were at the time, which takes time, which delays things. So the more accurate and complete the information you can give us at the beginning to be able to do that, it works faster. It actually enhances the flow of information. But any time that you have a question, call a forensic accountant, talk to them, say, want to understand this, they're going to be up

All the ones I know are going to be upfront with you about what their retainer is, what their hourly rate is, because we're independent. We have to continue our independence. We can't look as a hired gun, which means we can't work for contingencies, those kind of things, that type of thing. And if you find a good one, in regards to it, they're going to be very upfront with you about what's going on. And if you're looking to talk to me, I work for Ida Bailey, been here almost 19 years now. It's idbailey.com. And you just put decash in front of that. You can email me.

I'm on LinkedIn, I believe Amy, you and I are connected on LinkedIn. In regards to all my contact information is there in regards to it. I'm not hard to find people say, they ask me many times, well, aren't you concerned about your information? I go, I'm in every database in the country in regards to what I've done for a living and kind of things. So I'm not difficult to find if you just Google my name. Now there is a Doug Cash out there that's a professional tennis player, that's not me in regards to it. Just type in forensic account.

I'm pretty easy to find in it. Like I said, it's pronounced I-de Bailey, but you can call us Edie Bailey. don't care. Whatever you just, you know, just call us. We'll be more than glad to help you.

Amy Goscha (37:07)
⁓ Doug, thank you. to all of you listeners out there, Doug is great. His firm is great. ⁓ Hope this episode has been helpful and has given you some thoughts about ⁓ when to contact a forensic accountant and to do it early on. Thank you for listening today.

Sorry. Just a cut off part of it. Thank you, Doug, for being here today with me on Divorce at Altitude. I really appreciate your expertise as a forensic accountant. And to the listeners, thank you for listening today at Divorce at Altitude. And we'll talk next time. Thanks.