Unit 6Indirect Methods of Reconstructing Income 1. Investigation of the Suspect's Background, Lifestyle, Integrity and Financial Status --Basic Identifying Information --Information About the Suspect's Role in the Organization --Information About Personal Circumstances and Lifestyle --Information About the Suspect's Behavior and Integrity --Information About the Suspect's Financial Status --Off-the-Books Versus On-the-Books Fraud --Investigating Financial Status in Off-the-Books Fraud --Means of Hiding Stolen Funds and Assets --Obtaining Information About a Suspect --Legal Considerations --Company Sources --Government Sources --Private Sources and Publicly Accessible Databases --Informants and Confidential Sources --The Suspect 2. Analysis of Personal Financial Records to Obtain Evidence About a Suspect's Financial Status --Bank Statements and Related Documents --Signature Cards --Monthly Statements 1 --Deposit Slips and Credit Memos --Review of Checks --Loan and Mortgage Files --Safe Deposit Box Records --Currency Transaction Reports --Investment and Insurance Records --Tax Returns --Credit Card Records and Credit Bureau Reports --Telephone Records --Methods of Estimating Unexplained Income --Starting Point --Cash Hoard --Other Considerations --Net Worth Method Formula: minus equals minus equals plus equals minus equals Assets at end of year (at cost) Liabilities at end of period Net worth at end of period under investigation Prior period's net worth (net worth at beginning of period under investigation) Net worth increase during period Living expenses during period Income estimate Known sources of income Unexplained Income --Assets --Liabilities 2 --Income --Living Expenses --Estimated Unexplained Income --Expenditures Method Formula: minus equals Expenditures Known Sources of Funds Unexplained Income --Bank Deposits Method Formula: minus equals plus equals minus equals Total Deposits to All Accounts Transfers and Redeposits Net Deposits to All Accounts Cash Expenditures Total Receipts from All Sources Funds from Known Sources Funds from Unexplained Sources --Access to Banking Records --Cash Expenditures (Net Banking Disbursements) --Known Sources of Funds 3