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Case Studies and Testimonials
Here are representative matters from our forensic accounting and financial investigation work, along with comments from clients and counsel. Results in any matter depend on the facts; similar results are not guaranteed.
Divorce and family law
Divorce and family law
Separate funds used to purchase, rehab, and sell homes
Sage was hired to examine the expenditure of the separate estates of a husband and wife. The wife had used a large sum of separate funds to purchase, rehab, and sell homes, generating community income from separate property. The husband had a small retirement that was expended early in the marriage. Sage reviewed the bank accounts, traced separate funds to final disposition using DIO, and prepared a report and computations. The wife's attorney used the report and settled the case in the first mediation. The wife was reimbursed for the purchase money, and the community split the sales proceeds.
More than one-third of separate funds spent
In another divorce, the wife had spent more than one-third of the husband's separate funds on reimbursable items. Sage traced the accounts, prepared a report, and the client and his attorney accepted the report and settled in the first mediation.
Corporate fraud
Corporate fraud and embezzlement
Embezzlement at a flight center
Sage analyzed records and Martin later testified in an embezzlement scheme at a flight center in Morristown, New Jersey. A one-third owner/manager used four schemes over eight years. The amount embezzled was $2.2 million. The arbitration judge and the defense agreed the partner had embezzled $1.7 million. IRS Criminal Investigation prosecuted the partner over unreported income of $870,000.
Vendor fraud at a Round Rock company
A computer company in Round Rock had $10 million stolen through insider dealings of an employee and two fraternity brothers. Martin testified in a deposition and later in a hearing. Two of the three defendants settled the civil matter. The third went to trial. The judge found in favor of the company and assessed $10 million in damages and $1.7 million in attorney fees. IRS-CI and the FBI later prosecuted two of the three, plus a CPA return preparer, who were sentenced to prison.
Litigation support
Litigation support
Theft of fees in Travis County
Martin analyzed bank and related records of a real estate company, calculated damages, and testified in deposition and at trial in Travis County District Court regarding theft of fees. His testimony established a $370,000 loss. The jury returned a guilty verdict and assessed the $370,000 loss and $1,000,000 in damages for the client.
Oil-and-gas arbitration in Evanston
Martin prepared and testified in a deposition and an oil-and-gas arbitration in Evanston, Illinois. The operator sold limited partnerships, produced no results, and refused to produce the books, records, and financial statements. The three-judge panel agreed with Martin's findings that the operator ran a Ponzi scheme and damaged the investors.
Estate and probate
Estate and probate
Misuse of more than $500,000 from an estate
Sage investigated alleged misuse of more than $500,000 from the estate of a client's parents by a brother who was executor. After the brother died, and after Martin rendered a report, the brother's spouse agreed to settle with the client and repaid the funds.
Will contest and Midland oil and gas properties
An individual had been disinherited by his mother in favor of his sister. Martin organized records, interviewed witnesses, created a timeline, and introduced the client to attorneys. A suit to contest the will was filed, and the information was used in mediation. The client received his portion of the estate, including oil and gas properties in the Midland, Texas area.
Caregiver undue influence: assets placed in a family trust
An elderly woman bought her caregiver a new car, and the caregiver used undue influence to keep jewelry in the house rather than in a safe deposit box. Sage assisted the woman's attorney with a trust, surveilled the caregiver, and held power of attorney to change the locks after the woman's death so the caregiver could not enter. The result: the elderly woman's assets were placed in a trust controlled by her adult children. If you are the adult child of an elderly parent and see similar warning signs, call 512-659-3179.
IRS Criminal Investigation
IRS Criminal Investigation
Prosecution declined after a raid
The home and office of husband-and-wife business owners were raided by IRS-CI after allegations by a disgruntled employee. Hundreds of boxes of records were seized, and the investigation lasted four years. Sage reconstructed income and reconciled returns to books and records. After Sage rendered its findings, and after two further years of waiting, IRS declined to recommend prosecution.
Structuring charges dismissed
Bar owners in Texas were indicted for structuring and conspiracy after one owner deposited just under $10,000 daily over a period of months. Sage reviewed records down to cash-register tapes and found that combined revenue for the nights charged was just under $10,000 each day, and, with counsel, concluded there was no evidence of an overt act of conspiracy. The attorney explained the findings to the judge, and the judge dismissed all charges.
No violation in a suspected Ponzi matter
An entrepreneur and his company were suspected of a Ponzi scheme. IRS-CI and the FBI executed search warrants on the office and home. Martin maintained contact with the agencies, monitored interviews, conducted interviews, and consulted with the entrepreneur. A new company was created with a manufacturing firm, investors did not consider their funds misapplied, both agencies determined there was no violation of the law, the investigations were discontinued, and the records were returned.
Case studies
Additional case studies
More matters from our forensic accounting and financial investigation work, grouped by type. Results in any matter depend on the facts; similar results are not guaranteed.
Embezzlement and internal theft1 matter
$350,000 taken by a controller and an IT employee
A large family-owned company's controller and its information technology person together embezzled $350,000 over a period of four years. The owners noticed that their bank account did not have the balance they expected and placed the controller on paid leave. Sage was hired to determine what happened to the money and learned that the controller prepared and signed the company's checks, reconciled the bank accounts, and destroyed third-party invoices as they were paid. Sage compared checks over $1,000 to the QuickBooks transactions journal and found that the controller wrote checks to himself and the IT person, then changed the payee name and classification in QuickBooks to indicate a draw by a family member. Sage also learned that the controller built a second home in Colorado and the IT person built a home in Texas with the stolen proceeds. They were terminated, and the case was presented to the local district attorney.
Public agencies and cooperatives2 matters
Surplus-vehicle sales at a state agency
A new director of a state agency noticed that the facility responsible for reselling state vehicles and surplus equipment was not generating the funds budgeted. Sage began by interviewing all of the employees who worked at the facility. Employees were committing minor pilferage, but management and supervisors were selling used vehicles to companies they had relationships with, to the detriment of the state. Internal controls did not include record keeping to determine the book value of each vehicle. Sage analyzed three years of vehicle sales, compared the sales prices to Kelley Blue Book, and determined that, in the most conservative case, the state had lost between $600,000 and $1 million on the vehicle sales. Sage rendered its report. The manager and supervisors were all replaced, and the employees pilfering items were placed on leave without pay for a week.
An employee posing as an electrical engineer
A utility cooperative hired Sage to determine what procedures allowed an employee to pose as an electrical engineer for a number of years. The employee was in charge of establishing company standards, and after a reorganization he complained and resigned. The company was concerned that he would file a lawsuit. Sage interviewed employees and outside individuals and determined that the company standards he had established were plagiarized from a nearby city. The investigation proved the false certifications the employee had claimed.
Criminal defense and expert testimony2 matters
Collections manager acquitted in a Form 8300 case
IRS-CI investigated the Forms 8300 filed by a car dealer that leased expensive vehicles. After an undercover purchase in which the buyer let it be known he wanted no paperwork in his name, IRS-CI executed a search warrant, seized records and vehicles, and later indicted four people: the owner, the sales manager, a salesman, and the collections manager. Sage was retained as an expert witness for the defense, analyzed the transactions, and created a schedule of the Forms 8300 filed by the dealership. The government's special agent had analyzed the bank records but not the sequence of the Forms 8300. Sage testified to the timeline of the Form 8300 filings and that the collections manager was no more guilty of money laundering than the driver of a Brinks truck hired to transport money. Three of the four were convicted, and the collections manager was acquitted.
Sales database rebuilt from 15 point-of-sale registers
Sage was retained as the testifying expert in a federal money laundering and controlled substance case. The defense work required recovering data from 15 business outlets and recreating the sales database from the point-of-sale registers. The original database was corrupted, so the daily sales of individual products had to be recreated. The defendants went to trial in federal court and were found not guilty.
Investor and investment fraud1 matter
$30 million medical-device venture: lawsuit dismissed
Sage was hired to represent a doctor who created a medical device that was being tested. Investors had contributed in excess of $30 million to the venture. An individual alleged that the venture was a Ponzi scheme and tried to get the FBI, IRS, and SEC involved, but was turned down. The individual then contacted the investors and created concern about what was done with their funds, and a lawsuit was filed for the return of invested funds. Martin was asked to review the flow of investor funds and the books of the venture and to prepare a report following the money and tracing the funds to prove that the investor funds were not misused. Martin reviewed volumes of records and rendered his report, and the lawsuit was dismissed and settled in favor of the doctor.
Individuals and divorce2 matters
Divorce tracing: case settles before testimony
Sage was hired to represent an individual in a divorce matter. The client's wife was contesting the settlement and alleged that he had withheld assets. Martin obtained the records, interviewed the client, and prepared a tracing analysis following the client's money to its ultimate disposition. A hearing was held, and with the assistance of the judge the case settled before Martin could testify about the tracing.
Unclaimed property recovered
Sage investigators took part in an investigation to determine whether unclaimed property belonged to an out-of-state individual. Sage contacted the client, and after an agreement was reached, pursued the funds for her. The outcome was beneficial to the client and made for a great Christmas for the client and her family.
What clients and counsel have said
I have been working with Ed Martin for over two years in a criminal income tax case which involved complex financial matters. During that time, I found Mr. Martin to understand the financial records in a way that I was unable to. He was very meticulous in his reports to me and was an incredible asset to the firm. His experience and professional approach were incredible assets in the process.
I have worked closely with Ed Martin, the principal in Sage Investigations, as both a federal prosecutor and civil trial attorney for almost twenty-five years. The investigations he performs are thorough and complete. His reputation for honesty and integrity is above reproach. He is an intelligent, articulate and experienced witness. I have no hesitation referring him to my fellow attorneys and clients for investigative services.
I have relied upon Ed Martin of Sage Investigations for approximately 15 years (since shortly after his retirement from IRS CID). He has always handled himself in a professional manner and always provided outstanding expert services to my clients and me. … I unequivocally recommend him based on his education, background, experience and his keen insight into economic crimes.
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I have known Ed for about 25 years and had the privilege to work closely with him, when I was a federal prosecutor and Ed was a Special Agent with the Internal Revenue Service. During my sixteen-year career as a federal prosecutor, I had the opportunity to work with Special Agents from almost all of the Federal Agencies and throughout many different parts of the country and I can tell you that Ed was one of the best of the very best.
Jack O'Donnell
Attorney at Law, Gray & Becker PC
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Ed Martin and Sage Investigations served as fraud experts in a financial fraud case we brought on behalf of a prominent technology company. Mr. Martin pieced together the defendants' financial records and provided a clear and concise expert report that provided useful context for the defendants' fraudulent actions. His work was very valuable and helped us achieve a favorable result for our client.
Courtney Scobie
Ajamie, LP
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I had the opportunity to work with Sage Investigations on a Bankruptcy fraud case that ultimately went to trial. Their commitment to the entire process and Ed's professionalism in and out of the courtroom was a decisive factor in the winning outcome. Ed testified as our forensic accounting expert.
Stephen Harpold
Pattillo Richards & Harpold PC, Kerrville, TX
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I have relied on Ed Martin and Sage Investigations for more than 10 years … Ed Martin of Sage Investigations is my 'go to' guy.
Doug Becker
Attorney at Law, Gray & Becker PC, Austin, TX
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When our company became the target of an IRS / FBI investigation, Sage Investigations and Ed Martin were there. … Each move and action was directed towards the end game of closure. … Thank you Ed Martin and the Sage Investigations staff.
Eugene G.
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Mr. Martin is diligent, efficient, compassionate, and extremely professional. Ed is a guy you want in your corner!! … His experience dealing with the IRS … is worth double his hourly fee, EASILY!
Joshua Elbaum
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After a quarter century as an investigative journalist, I've worked with the good, the bad and the very ugly. Without equivocation, I can say that I've never come across an investigator who can match Ed Martin's skills.
Ted Dracos
Author
Testimonials
More client testimonials
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I had the opportunity to work with and review Ed's work in a large securities fraud case. The case involved over 600 defrauded investors and total losses of more than $35,000,000. Ed was responsible for analyzing the financial records and investigating the persons responsible for causing the losses. Ed constructed a detailed accounting of all the financial records that enabled us to do an investor by investor analysis of total losses as well as identify investors that received preferential treatment. Additionally, Ed did an excellent job interviewing witnesses, inside and outside the scheme. He is a pleasure to work with in that he always has a positive attitude and you can rely upon him to be very thorough and professional in completing every task that is assigned him.
Michael Shaunessy, Attorney At LawSedgwick, Detert, Moran & Arnold LLP
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Ed Martin was my Forensic Accounting Expert in an embezzlement case in Caldwell County. I appreciate the way he thoroughly converted raw data into an easily understandable summary--one that I could understand, but more importantly, a presentation which was understood by the jury. The total package--development and testimony before a jury--was professional from start to finish.
Tom GarnerSpecial ProsecutorCaldwell County
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Ed is my go to investigator. He is diligent, thorough, and cares about doing a good job. I never have to worry about Ed’s integrity or professionalism in doing his job since he is a class act. Further, his work product is excellent and helpful to my practice.
Steven Levatino, Attorney At LawLevatino Pace LLPAustin, TX
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I worked closely with Sage Investigations on a highly contested, multi-asset division divorce where much of the underlying documentation was not readily available, and separate assets had to be painfully traced throughout the years to prove their separate nature. Ed Martin and the Sage team were doggedly determined to uncover every stone which would help our position, and he did so with patience and competence. Ed’s forensic skills were critical to our searches. His accounting expertise traced the dollars and cents to successfully prove our positions through numerous years and accounts. It was a very fraught-filled long-term endeavor, but Ed maintained a good sense of humor and a great air of professionalism throughout.
Ruth Russell SchaferOf Counsel with Brin & Brin PCAustin, TX
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I was fortunate to work with Ed Martin over an extended period of time on behalf of a client that needed to shut down the rogue operation of its software across the state. Ed was responsible for organizing and leading a large team of investigators, over several months, in tracking down the wrongdoing. Ed got the job done, and proved to be a reliable, responsive, skilled, and honest investigator
Joseph Callister, Attorney At LawWick Phillips Gould & Martin LLPDallas, TX
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Sage Investigations is a "One Stop Shop" offering everything you need to conduct a financial investigation, expeditiously, efficiently, and accurately. Accordingly, I recommend Ed Martin and his staff to any and all former or retired financial criminal investigators requiring input and analysis of financial records.
When I needed to analyze thousands of bank transactions over 5 years through 11 separate accounts at multiple banks Ed Martin and Jason Slick use their DIO technology to input the records, present the transactions in a Source and Application format; in addition to a format that I placed in an Excel Table where I could query custom sorts and filters. With Sage Investigations' work product, I was able to "follow the money" and present clear concise findings during trial.
I look forward to my next opportunity to work with Sage Investigations.
Andre Noisette, PresidentA Noisette, LLC
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Professional, competent, dedicated, diligent and loyal. These words that offer a straightforward description of Ed Martin, the man and the professional investigator. The cases I’ve worked on with Ed have offered a rare opportunity to collaborate and strategize with a colleague of unsurpassed integrity and professional experience. I offer my wholehearted recommendation of Ed to anyone wanting to engage the highest quality of professionalism to further their business, financial or personal interests.
Henry J. Novak, Attorney At LawFormer Assistant United States attorneyand 25-year civil, business litigation practitioner
More examples are on our pages for divorce, business litigation, corporate fraud, estate and probate, and IRS matters.
Call 512-659-3179 or request a free consultation.
