Women's Money Wisdom

Episode 176: An Insight into Divorce Forensic Accounting with Tracy Coenen

• Tracy Coenen • Season 3 • Episode 176

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Have you ever wondered what a forensic accountant does in divorce cases? Are you worried about hidden assets or financial infidelity? In this episode, co-host Melissa Fradenburg, CDFA®️, AIF® welcomes Tracy Coenen, a renowned forensic accountant who specializes in helping find money during divorce. Tracy has created a 10-step Divorce Money Guide to help you find hidden assets and take control of the finances during your divorce, and she and Melissa dive into a few of the steps.  They also discuss how to spot financial fraud and infidelity, as well as what every spouse, especially stay-at-home partners, should know about their family finances.

As a forensic accountant, Tracy has investigated hundreds of fraud cases in various industries and served as an expert witness in numerous cases involving damage calculations, commercial contract disputes, shareholder disputes, and criminal defense.  Tune in for an informative and empowering conversation on how to take control of your financial future  and learn from Tracy's wealth of knowledge.

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Speaker 1:

Welcome to the 52 Pearls Weekly Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and founder of Pearl Planning, and I'm Melissa Friedenberg, financial advisor with Pearl Planning. Pearl Planning is a financial planning and investment management company located in Dexter and Gross Point, michigan. We work with clients all around the country. The purpose of our podcast is to explore specific financial topics and provide advice you can use in your everyday life.

Speaker 1:

Hello and welcome to the 52 Pearls Weekly Money Wisdom Podcast. This is Melissa Friedenberg, and this week I am sharing a podcast episode that was recorded originally for the Wealthy After Divorce podcast. This episode features Tracy Conan, who is a forensic accountant. Tracy and I do talk about forensic accounting in the context of divorce. I thought it may resonate with some of our listeners who maybe aren't in the divorce process, but just as a way to kind of identify spending patterns and behaviors in marriage that may be red flags or signs that you need to take a closer look on what exactly is happening. So I'm sharing this week that episode and I'm going to link below If you would like to follow the Wealthy After Divorce podcast.

Speaker 1:

We would love that. Hope you enjoy. Hello and welcome to the Wealthy After Divorce podcast. This is Melissa Friedenberg, and this week our guest is Tracy Conan, a renowned forensic accountant with over 25 years helping people and companies figure out where their money has gone, and also the brains behind the divorce money guide and author of Find Me the Money. You may have seen her interviewed on CNBC, fox, forbes, but today we are very grateful to have Tracy here on the Wealthy After Divorce podcast. Welcome, tracy.

Speaker 2:

Well, I'm just grateful to be here, Melissa. Thank you for inviting me.

Speaker 1:

You're a passionate resident with me. I met you professionally and then follow your pages, and I love that. You enjoy helping people who feel powerless and divorced and that you have also found a way to help people that maybe can't hire a forensic accountant to really figure out how that process works, of figuring out where the money is and getting the money that they deserve in the divorce process. That is so in line with what we try to do here on the Wealthy After Divorce podcast. Let's talk about how you do this. Could you just start by telling us a little bit about what a forensic accountant is and what your role is in divorce cases?

Speaker 2:

Absolutely. A forensic accountant is a fraud investigator, so I find money. It's really that simple. I spend my days digging into financial details of companies or individuals trying to figure out where the money went. Another way to say it is I trace money. I trace it through accounts. See, is the money bouncing from one account to another? Is it being transferred around? Is it disappearing? Did someone do a $10,000 cash withdrawal from a bank account and then poof, that money just disappeared into thin air? In the divorce context, what I'm doing is helping people, typically wealthy people. Those are the cases that are more complex, that can justify the high cost of my services and the services of any forensic accountant. Unfortunately, it's just a really expensive endeavor.

Speaker 2:

In divorce. I am sorting through the details of bank statements, looking at thousands of transactions, again trying to figure out where the money went. Sometimes we're figuring out is there hidden income? Does someone have an income source that we didn't know about before? Is there secret spending? Is there money being transferred out or siphoned out of the marital funds? Is there an asset like real estate that exists that the spouse didn't know about? Any of those types of things fall under what I do in the divorce context.

Speaker 1:

Absolutely. That is so time-consuming. Obviously, i am not a forensic accountant, but sometimes in our work we do look through things and try and figure stuff out. It is expensive because it is very time-consuming and it is definitely something that, as I mentioned in the intro, you have 25 years experience. How did you get into this?

Speaker 2:

I went to college with the plan of doing a criminology major, which I did. My goal was to one day become a prison warden.

Speaker 1:

Oh wow, What a difference.

Speaker 2:

I know the audience can't see you, but I usually get that exact same facial expression because people look at me. With my long red hair, i look like a nice lady. I think I look like a prison warden. That's a good thing. I don't look tough enough to be a prison warden. No, here's the deal.

Speaker 2:

I had an extreme interest in prisons, in the criminal justice system, and I really felt that there was something I could bring there in terms of making a positive change. Prison is not a happy place. It's not happy for the victims, it's not happy for the offenders. We have the argument about whether prisons are serving the purpose of protecting society or if they're supposed to punish people or if they're supposed to rehabilitate people. I felt like I could accomplish all of those things in a really positive way. That's what I wanted to do. My sophomore year I took a class in the criminology program called Financial Crime Investigation. It was an elective that was offered once every few years. I had a chance to take it. I took it and I said that is what I want to do. I started taking accounting and economics courses. I was good at that, and so I was off to the races.

Speaker 1:

I love hearing that and I love especially with teenagers. I think of just taking something like an elective and that it inspires an entire career and interest. I love hearing stories like that. Obviously you're good at it and you enjoy it. That comes through just in hearing how you talk about it. Let's dig into a little bit about some of the ways that you use your background in accounting to figure out where the money is.

Speaker 2:

I have what I like to refer to as investigative intuition. I get a gut feel about a case, about facts of a case, and I intuitively know where to start looking for hidden money. Certainly some of it is experience. I know the common places that husbands hide money. But when someone comes to me and says, hey, here's the story, My husband runs this business, Here's what's been happening. We've always lived this lifestyle and now that we're getting divorced he's saying he's losing customers and the business is failing and there's no money and he couldn't possibly pay alimony or child support. I know that this is untrue, because he just bought himself a new fancy car and he's taking his new girlfriend on this expensive vacation. There's got to be money coming from somewhere. Intuitively, I can ask some questions about the business and have a pretty good basis for coming up with great areas to look at, to see where the money is being hidden or sighted off.

Speaker 1:

Isn't that interesting how the business always starts making less money right around the time of filing for divorce. I've noticed that trend as well, right.

Speaker 2:

But the thing is that they always make mistakes.

Speaker 2:

They always forget that there are things that are going to show up in different areas of the financials that are going to tip us off, that they're still doing business at the same level.

Speaker 2:

The thing that I would suggest for example, if a business owner wants to reduce the amount of income that they're reporting for tax purposes because we base a lot of things off the tax return Well, we're talking about child support and spousal support and things like that The judges like to start with a tax return because it's an official file document. They'll reduce with the reporting on the income side, but they're greedy and they always want to get all their deductions. So we look at the expense side, we look at those deductions and say hey, wait a second. You've got a manufacturing facility and you say sales are down 30% last year, but your wages that you paid to employees were just as high as ever. I'm sorry, you've got hourly employees. If your sales really went down 30%, you would have been laying off employees and your wages would have gone down too. It can literally be as simple as that.

Speaker 1:

Wow, that's good In your role. When you're working on a high net worth case with an attorney, you are actually testifying, so you're finding these things and then you're testifying in court.

Speaker 2:

That is true, i have testified almost 100 times over my career. It's a little bit nerve-wracking because I like to say it's like my Super Bowl, if you think of a football player getting to the Super Bowl. Me testifying in front of a judge is like it for what I do. And so you know, i think gosh I don't want to say anything wrong, i don't want to mess up the case with a client, but at the same time there is a rush of adrenaline that comes with it. There is gamesmanship that comes with it.

Speaker 2:

What am I wearing to court? How am I perceived by the judge or, if it's a different kind of case, by the jury that might be there? How do I walk into court? How do I present myself? I like to present myself as that nice young lady who seems to know so much about the numbers. A lot of times, the attorneys in court who are questioning me are older men and they can come across as bullies And they're trying to make me look like I made a mistake or like I didn't do something correctly, and for me to put forth this persona of oh, she's that nice young lady who seems to know so much.

Speaker 2:

I love that. I love that I have never said this on a podcast before. This is one area we've never delved into as many podcasts as I've been on. I've never talked about this part of it. So attorneys on the other side who are listening to this yes, that's where I'm going with this.

Speaker 1:

I love that you said that out loud. You said the quiet part out loud, but that is so true that in your mind you know you are qualified, that you have this case locked down, but that the way that even you approach that and present yourself is interesting And I can relate. Thank you for sharing it first here on our podcast. Obviously there's one of you and you've done as you mentioned over 100 court trial cases. That's not a possibility for everybody that may be listening going through a divorce that if they're thinking either they're thinking of filing or they're in the divorce process and there's some red flags. You have created a guide for people that is more affordable than flying you out for their court case, called the divorce money guide, and talk a little bit about that and how that is a resource for people that may be thinking they need the service.

Speaker 2:

I do about three or four divorce cases a year, which isn't very much. I do a lot of consulting work in general, so I am working on larger, more complex cases and it's super time consuming. But the one on one aspect limits how many people I can help, and about a year ago I was in a coaching program that I'm in and I was in a small breakout group and we were talking about things that bother us about our businesses, and I said I'm really bothered about the fact that I can't help more people with their divorces. I get calls weekly from women who are in the process of divorce who have ordinary, average cases where they're not making millions of dollars. They don't have millions of dollars in assets. They have what average middle class or upper middle class America has in terms of income and assets. They need help with their divorces. I don't have the bandwidth to help them And most of them can't afford the services that I provide. A forensic accountant starts at probably about $10,000 as a deposit and goes up from there. It's just not affordable for 95% of the people in divorce, and so I was complaining that I can't help more people and that there are no resources out there for people. Literally, i'm telling people who call me I'm sorry this isn't a case that I could consider taking on. There's a few articles you can go read. That doesn't help them, yeah. So, as I was saying out loud, it's so frustrating that there's nothing. Why isn't there a resource out there for them? The light bulb went on in my head and I said why can't I make the resource?

Speaker 2:

It was actually a really quick process over the next month of talking to people I knew in the online learning space, in the divorce space, speaking to attorneys and other forensic accountants, to figure out is this a resource that is needed, wanted and would be utilized? So I went from initially thinking, well, i could make something basic, offer it for free, put it out there. Anyone who calls me that I can't help, just push them towards it. Then I started thinking, no, a free resource is not enough. I need something that I can justify putting a lot of time in, because there's a lot of nuances to this that if I could show the ordinary person where to look and what to look for in their financials, they can find it.

Speaker 2:

They know their family, they know their behavior patterns. They probably know the spending patterns, even if they don't know the exact dollar amounts, they know we would never go to that restaurant. That hotel should never have been paid for. Wait a second, why was $5,000 withdrawn from our bank account? Individuals have the ability to do this. I wanted to create a resource that would be available for them. I came up with the idea for the divorce money guide. Yes, it is a paid product. It walks people through a little bit of do-it-yourself forensic accounting with videos, written materials if you prefer to read versus watching the videos, worksheets, checklists all the things you need to point you in that right direction to find specific evidence of whether or not your spouse has been hiding money or spending it inappropriately.

Speaker 1:

I love that And just for our listeners, today, Tracy has been so gracious in offering a discount $100 off with the code WEALTHY. We will link that in the show notes. So if you are listening and you are thinking you need this guide certainly a great resource And with the guide, you're paying for it And you're not exactly on your own. It's not one-on-one, which is just not feasible, But tell me about some of the resources available if you do buy this guide.

Speaker 2:

Right. So the guide itself, the videos and the written materials are very comprehensive and literally walk you through step by step. We have 10 steps. You don't have to do them all and you don't have to do them in order. If 10 steps sounds overwhelming, but I like breaking it down and leading you through step by step. That is on-demand access at whenever you want lifetime access, do it at your own pace.

Speaker 2:

If you do feel that you need some support, we have a group coaching option And what you get with that is you are in a private Facebook group, so nobody needs to know that you're in there, and we have weekly video content where I take concepts and I expand on them. I give you new material, new things that you can look at. One of the things that I'm doing next week for the group is we're talking about working with your attorney and financial questions that you should be asking your attorney and financial things that you should be going over with your attorney, and how you can present what you find in the divorce money guide to your attorney so that you can get your money back if your spouse has been wasting money, hiding money, etc. We do things like that and you get to ask Tracy anything. So in that private group, anything that comes up in your divorce of a financial nature, you can ask me. I found this and I asked my attorney about it and he says it's nothing to worry about. Do you agree?

Speaker 2:

So that's a group coaching option. And then, if you need even more help on top of that, we do have a one-on-one option. You get access to the group so you can have all of that learning and all of those materials. But we do one-on-one private strategy sessions with me. So for an hour we meet on Zoom once a month for four months And we talk about your case, the financial issues that you have, and I help you come up with a strategy for unraveling those issues, finding out what's going on. Okay, you need to have your attorney subpoena these documents And once you get them, let's take a look at them and I'll help you zero in on what are the areas that you really need to be digging into to look for that hidden money.

Speaker 1:

I love that you offer different levels based on what you need, and I find sometimes as the divorce process goes at least on our side things that seem maybe not so complicated in the beginning have a way of getting more complicated or as you uncover things. So I love that you can kind of you know, add on if you need to have that additional session outside of the group session to specifically talk about your case. What a great resource. So Tracy has also written a book called Buying Me the Money, and there's a link in the show notes for you to order.

Speaker 2:

It's going to be released on May 4th. Right now it's only available for pre-order on Kindle, but there is going to be a paperback and hardcover. It's just that. At the moment, it's only available to pre-order the Kindle.

Speaker 1:

Yay.

Speaker 2:

Okay, jackie is the character in the book That's her name. So the book is the story of Jackie, who's going through a divorce and her husband was cheating and she's a stay-at-home mom and she's getting screwed out of money. And it's a book to show women that they're not alone, that the things they're thinking, other people think it too. Like Jackie's thoughts occur all throughout the book Like how could I be so stupid, why wasn't I paying attention All these things. And so women are going to see themselves in this story and hopefully feel less alone and feel empowered, like hey, i can get through this divorce process.

Speaker 1:

The worst, though, when women are just. They almost feel like it's their fault, like one, because they weren't paying attention. It's fun to see, on my end, people come out of that after the divorce is final, like finally feeling like you know, maybe it wasn't me, Maybe I didn't deserve that, you know? or?

Speaker 2:

Well right, jackie's husband was cheating. Of course she has thoughts like well, maybe I wasn't tuned in enough to our marriage. I thought things were fine, but I know I was really busy with the kids and I was tired a lot. That is so relatable.

Speaker 1:

Now in this book you mentioned that you share an example or a story about a case. Could you share, maybe another example, just a case where you were able to help through forensic accounting and how that kind of turned out for?

Speaker 2:

I have a super simple example of an important discovery in the case. I was working with a client because she had concerns that her husband was hiding money or had assets somewhere that she didn't know about. And I was going through their financials, going through all of their bank statements and credit card statements, line by line in the transactions, and not really finding anything. Everything seemed to be accounted for. You know, the mortgage was getting paid, all the bills were getting paid. They seemed like normal amounts. There didn't seem to be any weird cash withdrawals, things like that, except I came across a check that was written to a utility company out of state. In fact, it was across the country from where they were. So I asked her about this, expecting her to say something like you know, oh, we rented a vacation property and something weird happened. Or maybe she was going to say we paid a bill for our in-laws, they needed some help, right? I expected something simple like that. She said no, i have no idea. That's so weird, why that would be paid.

Speaker 2:

To make a long story short, we got a private investigator involved, went down the rabbit hole Her husband had purchased this property. Once it was discovered that he had purchased this in his name only secretly. He of course referred to it as a rental property. As you can imagine, it was not a rental property. It was for his girlfriend to live in And the deal was that he had opened a checking account for this property and opened that checking account in his name only at the same bank where they had their joint checking account. He mistakenly one month wrote the check for the utility bill out of their joint checking account instead of his secret individual account.

Speaker 2:

That silly little check is how we uncovered that property. Half of that property was hers. That led to us uncovering expenses for the girlfriend, all of these kinds of things. And so I know people out there are probably laughing because not a lot of people write checks for a lot of things anymore. But they still do. And I will just tell you, people still make mistakes, even in presenting a debit card or doing an electronic transfer. People will mess up and use the wrong account And that's sometimes how we uncover the fraud.

Speaker 1:

Interesting story. I mean, obviously nobody wants to find out that kind of thing that's going on. But if it is going on, better to know about it. And that is half of her property.

Speaker 2:

Right, right. When money is being spent on an affair partner, half of that money is yours, and if we can prove what it was spent on, you have a great shot of getting your half of that money back and forth.

Speaker 1:

The line where knowledge is power. And to get the best possible settlement in your divorce, you've got to find the money.

Speaker 2:

That's right. You've got one chance to get the right settlement in your divorce, and what you walk away from your divorce with can affect your standard of living for the rest of your life. Here's a really awful statistic After a divorce, women's standard of living goes down 27% on average, while men's goes up 10% on average. That's a big gap, and I am here to help close that gap.

Speaker 1:

Dislike that gap for sure, And I see it every day in the work that I do with people post-divorce. But I love that you are fighting that and trying to help solve that, because that is not the way it should be And I really I am so grateful for your time today. I'm so excited for our listeners to hear and also use your resources. I also noticed you have we'll link it below a red flag assessment quiz link that our listeners can go to as well. So, Tracy, if people are listening to this episode and what we talked about really resonates with them and they want to find out more about these resources or your services, what is the best place for them to go to find out?

Speaker 2:

You can find me at my website, fraudcoachcom, and I've set up a page specifically for your listeners And that page can be found at fraudcoachcom.

Speaker 1:

Forward slash wealthy, and all of these resources that we mentioned are here Again the divorce money guide, the find me the money, the link there to order and the red flag assessment quiz. If you're just thinking, maybe you're worried about some of these things and want to see if this sounds like something that maybe worth kind of investigating or potential fraud in your particular case. Thank you so much for your time, tracy. It's been so nice getting to know you and hearing about all the great resources you have for people going through a divorce.

Speaker 2:

Thanks for having me. It's been a really fun conversation and I'm just out here hoping to help people get better financial outcomes in their divorces.

Speaker 1:

You can access our first two seasons of this podcast on our website, at wwwpearlplancom, or on Spotify. If you're interested in learning more about Pearl Planning, feel free to sign up for our newsletter, also found on our website.

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Melissa Joy, CFP

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