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Supporting a PE-Backed Company With Fraud Investigation & Recovery Insurance Claim

When an employee of a private-equity-backed home services platform was caught conducting a fraudulent payroll scheme, the employee was terminated and the case was turned over to law enforcement. The company engaged FTI Consulting to conduct an internal investigation to determine the magnitude of the fraud and the resulting losses.

Our Impact

The investigation revealed that the fraud had gone undetected for more than six years, resulting in losses of more than $4 million.
The company was able to substantiate its insurance claim under its fidelity bond (employee theft) policy with a detailed loss analysis and supporting evidence.,
The company received a full, unadjusted insurance recovery covering the entire $4 million loss, plus all professional services fees.

Our Role

FTI Consulting’s team of investigators performed a comprehensive lookback of the company’s payroll system data and relevant accounting data spanning the previous seven years.
Our forensic accounting experts identified patterns of activity that uncovered dozens of direct deposit accounts and employee records used to carry out and mask the scheme.
The team prepared a detailed report for submission to the company’s insurance carrier describing the nature and scope of the scheme and the total loss identified.
Our experts provided follow-up submissions and participated in meetings with the insurance adjuster and the company’s legal counsel to defend the details of the report, ultimately leading to a full, unadjusted payout under the company’s insurance policy.