Accuracy uncovers fraud at a large IT manufacturer

Accuracy assisted a manufacturer of IT products in a mismanagement case perpetrated by one of its senior executives.

 

Context

 

Our client is one of the largest manufacturers of personal notebooks. In Italy, the group operated primarily through two subsidiaries on which we focussed our engagement. A handful of employees created unlawful sophisticated mechanisms, which were extremely difficult to reconstruct, to manage the group’s advertising expenses, damaging several group and non-group businesses in the process.

 

How we helped

 

An overall view of the mechanism was obtained by reconciling (i) the purchases of processors/operating systems, (ii) marketing expenses incurred and (iii) funds made available to the company, as well as by discovering the total overcharge performed on each subsidiary.

Our work was structured in four phases:

  • Phase 1 – reconstruction of events and identification of the entire unlawful mechanism and damages quantification
  • Phase 2 – performance of a forensic due diligence on three subsidiaries for four fiscal years to assess the fraud arising from the mismanagement of the supply chain. Such fraudulent activities were wilfully designed by the top executive and his accomplice team to obtain personal benefits
  • Phase 3 – support for the Italian tax authorities in further analyses through new evidence arising from investigations requested by the judge
  • Phase 4 – support for the criminal lawyers in integrating a criminal complaint

 

Outcome

 

The assignment was complicated due to a lack of information and the level of sophistication of the scheme, which the defendant developed to cheat his employer out of millions of euros.

Our added value in this engagement was the skill with which we handled a significant amount of data (both on paper and in Excel), which was misleading, incomplete and sometimes even in Chinese! In addition, our team was able to translate the fraud scheme into a simple format so that it could be well understood by both the judge in the court case and our client.

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