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The Detection, Investigation and Prosecution of Financial Crimes.

This book promotes the net worth analysis technique pioneered by one of the authors, Richard Nossen. A widely acclaimed author and lecturer on the subject of financial crime investigations, Mr. Nossen is particularly adept at developing inferential, or circumstantial, proof using financial records.

The book has two primary thrusts. First, it advocates a broader use of the net worth analysis technique in financial crime investigations. Second, the authors provide a helpful general review of effective evidence-gathering strategies for these types of cases.

The basic premise of the net worth analysis technique calls for proving that subjects acquire assets and make personal expenditures at a rate far in excess of what could be funded by legitimate (declared) income. This, thereby, creates the strong implication--admissible in court as circumstantial evidence--that the incremental "income" is derived from illegal sources. The authors submit that this technique, used successfully in tax evasion investigations, also offers a viable approach in non-tax financial crime investigations.

Although the net worth analysis method represents a viable investigative tool in certain circumstances, several limitations to its use exist. First, for the technique to be truly effective, the disparity between reported income and expenditures must be significant. Second, the net worth analysis method is built around the assumption that investigators can identify all applicable financial records that impact on a case. The increasingly multinational nature of white-collar crimes makes this unlikely in some cases. Finally, the technique presumes that all reported income is legitimate. Illegal proceeds that have been successfully laundered could, in fact, be considered legitimate for purposes of the analysis.

These limitations notwithstanding, net worth analysis remains an effective tool--one that should be understood by all investigators of financial crimes. In cases where net worth analysis reveals little during the investigation, it may still prove beneficial for presenting circumstantial evidence to juries. The book's suggested format for accomplishing this task is excellent.

In the broader sense, the authors' treatment of financial evidence presentation in general is also superb. Suggested schedules are clear and can be easily understood by those not trained in accounting. This may be the book's greatest contribution--showing how to synthesize financial records from a myriad of sources into an easily comprehensible graphic presentation.

This second edition of Financial Crimes presents an excellent primer for financial crime investigators. While it hardly represents an "evolution" in the techniques originally presented in Mr. Nossen's previous texts, this book provides readers with a very clear and concise discussion of sound financial record analysis.

Reviewed by SA Gregory D. Meacham, CPA Economic Crimes Unit White-Collar Crimes Section Federal Bureau of Investigation Washington, D.C.
COPYRIGHT 1993 Federal Bureau of Investigation
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:second edition
Author:Meacham, Gregory D.
Publication:The FBI Law Enforcement Bulletin
Article Type:Book Review
Date:Aug 1, 1993
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