Fidelity insurance policies protect the insured against loss of money or other assets resulting from fraudulent actions committed by an employee, including theft and forgery among others. Certain fidelity insurance policies will cover a portion of the costs that were incurred through the course of investigating the wrongdoing, in addition to some or all of the misappropriated funds.

Toronto forensic accountants nagel + associates possess the knowledge and experience to provide thoughtful and effective assistance for either the insured organization or the insurer when a fidelity insurance policy exists and wrongdoing is discovered, particularly to support a claim.

laptop-figure

For Insured Organizations

When an organization with fidelity insurance coverage suspects or uncovers an employee fraud, nagel + associates can assist that organization by conducting an investigation and compiling the relevant evidence in order to seek a favourable resolution of a fidelity insurance claim. To this end, the specific tasks that we carry out include:

  • Collecting and reviewing potential sources of evidence. This includes banking and accounting records, as well as email and text message correspondence
  • Conducting witness interviews
  • Preparing deliverables including expert reports and schedules which quantify your losses
  • Providing expert testimony
  • Reviewing and compiling documentation to support your claim

For Insurance Companies

When an insurer receives a claim in respect of a fidelity insurance policy, we can assist the insurer by investigating and substantiating the claim. Specific tasks that we carry out include:

  • Collecting and reviewing documentation which may, or may not support the claim of the insured
  • Conducting interviews with witnesses, management of the insured organization or investigators hired by the insured organization
  • Preparing deliverables including expert reports, schedules and critique reports, which are prepared in response to the other expert reports that are introduced
  • Providing expert testimony in court

Red Flags:

  • Incomplete, missing or non-standard documentation
  • Prior track record of sloppy, secretive or irregular activity
  • Previous complaints, allegations or concerns
  • Background check reveals concerning and troublesome results
  • Personal refusals to produce requested documentation

The board of directors at JACE Inc. – a local and respected charity – hired a forensic accounting firm to investigate one of their Senior Directors who was working with the organization. They suspected that he was stealing money out of the charity’s funds that were to be allotted for overhead expenses.

The forensic accounting firm performed numerous interviews with employees and reviewed the documentation which supported the company’s claims, which allowed them to prepare an expert report that outlined their findings.

The Report found that the Senior Director in question had stolen $250,000 of the charity’s funds over a six-year period. The Senior Director had created a fictitious corporation with almost an identical name to one of the charity’s vendors with only a slight difference in spelling. The Senior Director sent fraudulent invoices to the charity that included a falsified account of the work that was done. The payment for these invoices were sent directly to his personal account

Red Flags:

  • Interviews
  • Financial records
  • Vendor invoices
  • Banking records

To determine whether your organization may be susceptible to fraud, take the following brief survey: