A financial motive review is an analysis of the financial situation of a person or a company – both before and after a suspicious event -in order to assist stakeholders when determining if there was a financial motive for the incident. Events that could necessitate a financial motive review include:

  • Fires, including suspected arson
  • Floods or other property damage
  • Frauds
  • Suspicious death, including murder
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For Insurance Companies

Financial motive reviews are often conducted in the context of a suspicious insurance claim. When an insurer receives a questionable claim – such as one that involves a suspicious fire, flood or other property damage, having a seasoned forensic accountant conduct an independent and exhaustive investigation of the insured’s financial circumstances can be instrumental in determining if the claim is bona fide or dubious in nature. We can assist insurers faced with suspicious claims by:

  • Examining financial, banking, accounting, tax and real estate records
  • Performing financial analysis to assess the reasonableness of assets, debt, revenue, income, expenses, net worth, cash flow and other indicators of financial position
  • Reviewing email and text message correspondence and telephone records
  • Conducting interviews of the claimant and other relevant parties
  • Reviewing contracts and insurance policies
  • Preparing expert reports and other deliverables; and
  • Providing expert testimony

Red Flags:

  • Poor and deteriorating financial position
  • Inability to resolve debts, particularly in the short term
  • A pattern of overdraft usage, ‘NSF’ cheques and accumulating high-interest debt
  • Declining or inconsistent revenue or income
  • A large or recently acquired insurance policy

For Litigants

Financial motive reviews conducted by an independent expert may also be useful for plaintiffs pursuing civil claims in respect of losses sustained as a result of a suspicious event, or for the defendants who face these claims. We can assist litigants in assessing the facts and circumstances of their particular case, and by identifying information that either supports or refutes the presence of a financial motive.

Services we perform in this regard include:

  • Examining financial, banking, accounting, tax and real estate records
  • Performing a detailed financial analysis of the litigant’s records as a means of assessing assets, debt, income, expenses, cash flow, net worth and other indicators of financial position
  • Reviewing email and text message correspondence and telephone records
  • Conducting interviews of the claimant and other relevant parties
  • Reviewing contracts and insurance policies
  • Preparing expert reports and other deliverables
  • Providing expert testimony

Factors to Consider:

  • Poor or deteriorating financial position
  • Inability to resolve debts, particularly in the short term
  • A pattern of overdraft usage, ‘NSF’ cheques and accumulating high-interest debt
  • Declining or inconsistent revenue or income
  • A large or recently acquired insurance policy

The week before Christmas, the claims department at ABC Insurance Co. reviewed an insurance claim submitted by Mr. Tee that related to his cottage that had burned down in a fire. This was the second time in as many years that Mr. Tee had submitted an insurance claim relating to a fire at his property, and as such, ABC Insurance Co. decided to hire an external forensic accounting and investigative firm to perform a Financial Motive Review in relation to Mr. Tee’s submitted claim.

The forensic accounting and investigative firm interviewed Mr. Tee, reviewed his insurance policies and contracts as well as examining his financial, banking, tax and real estate records. They also conducted a financial analysis into his assets, debt, revenue, expenses, net worth and cash flows in order to determine Mr. Tee’s financial position and future financial obligations.

The forensic firm concluded that Mr. Tee was in a poor financial position, and therefore unable to resolve his current short-term debt. The firm also noted the alarming frequency of overdraft usage, ‘NSF’ cheques and accumulating high-interest debt. As a result of the Forensic Accountant’s report and the Fire Marshal’s ‘suspicious cause’ of fire report, ABC Insurance Co. sued Mr. Tee for insurance fraud.

Red Flags:

  • Financial records
  • Electronic correspondence
  • Contracts and Insurance Policies

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