Private-investigator licensing emerges as potential threat to CPAs

BY JEFF DREW
MARCH 5, 2013
The AICPA has made available to members an online guide detailing which states and cities require CPAs practicing forensic accounting to be licensed as a private investigator.

More than 40 states have enacted laws requiring private investigators to buy a license to operate in their state. Most of those regulations have gone into effect during the past five years, according to research done by the AICPA’s Forensic & Valuation Section.

Based on feedback from AICPA members, the FVS Section believes many CPAs are unaware that they might be breaking state laws regarding P.I. licensing. Penalties for operating as a private investigator without a license vary, but in some states it is a felony.

To spread the word to the CPA community, the FVS Section is making available to AICPA members an online matrix designed to help CPAs determine if the tasks they perform in their practice require them to obtain a private investigator’s license in the states and/or cities in which they do business. The matrix of P.I. licensing requirements for CPAs previously had been available only to FVS members.

While the scope and complexity of P.I.-licensing laws and statutes vary nationwide, they all impose licensing requirements on individuals participating in activities associated with private investigations. Because forensic accountants conduct research- and document-based investigations, they often fall under the purview of these laws. In addition, some CPAs specializing in information technology perform work, such as digging for information in computer files, that could require them to register as private investigators.

The requirements for obtaining a P.I. license, like the penalties for failing to do so, vary greatly by state. In some states, the statutes specifically exempt forensic CPAs from the licensing mandate. In other states, including Virginia, the P.I.-license exemption is extended only to CPAs based in that state. In Virginia, state law mandates that forensic accountants licensed as a CPA in another state must obtain a P.I. license to do work in Virginia regardless of whether their home state has exempted them from such a requirement.

Some CPAs in states that have exempted CPAs from having to procure a P.I. license might believe that mobility laws would carry that protection over to other states. But, as shown in the Virginia example, that is not necessarily the case.

—Jeff Drew (jdrew@aicpa.org) is a JofA senior editor.

Cheating Spouses- Why They Cheat

People cheat for many reasons. Some like the excitement of seeing how far they can go without getting caught. Some want to go after passion they think is lost. Some feel younger and more attractive with someone on the side. Some feel better about themselves if they can take someone away from another, a little like the grass always looks greener on the other side and some are just scum-bags. I’ve worked as a state licensed private investigator for many years. I have seen things that others have only seen in movies. I’ve been asked many times the same questions number one being, who are your most clients, men or women? My answer is about 50/50 and that hasn’t changed. Second question is, should I feel guilty hiring a PI to check out my suspicions? My answer is again the same which is no. If you have reason to be suspicion, there are probably good reasons why. The third question is usually how long does this type of case take? My answer is always this. The length of an investigation and surveillance depends a lot on what the subject and the lover does. For instance, how often they see the other party, if the other party is married also or single, what type of work they do, how many vehicles they have access to drive and if they are on the road a lot going out of town, and of course many other factors. I’ve had cases that were successful within a few days while others took a few weeks. The length of each case is different. Clients need to keep in mind that it’s not necessarily the length of the case they should be concerned about, but that all evidence is obtained correctly by the PI you hire. Anything else is subject to being thrown out of court. Most all my clients ask the question why are they cheating on me? Stating, I’ve been the best wife/husband I could be. Here’s the thing. It’s not you, it really is them. They are the one cheating. Hold your head up and take the appropriate steps to protect yourself and your children. There is life after divorce. I will end on this truthful fact. Discovery Investigations never had any evidence thrown out of any court. Keep in mind that there is a right and wrong way to obtain evidence. Make sure the PI firm you hire is licensed and has some good years of experience behind them. We gladly provide our clients with references from attorneys and other clients that have used us for many years.
Dollie Mason, LPI

Divorce- or Live with Infidelity?

Back in 2011, I had a call from a business woman in Marietta. This client and her husband both had their own business. She felt her husband was cheating on her since he was displaying all the usual criteria of a cheater. He had started working out, buying new clothes, underwear, and taking extra stock in his appearance.
He had started putting his wife down by telling her she looked old, had gained weight, needed a face lift and he was no longer attracted to her sexually. He still claimed no affair when she asked him and as things heated up he went a step farther and told her even if he was she would never be able to prove it.
I took her case and within a week I was able to follow her husband to his mistress' house and the rest is history. You know what they say, a picture is worth a thousand words, and the camera doesn’t lie.
This case was ready to go- retain a lawyer and win in any court of law on grounds of adultery. However, once confronted with the evidence I obtained, he began to cry like a baby and apologize all over himself and she, the client, took him back.
I haven’t heard from this client since but I find it hard to believe the marriage is in good shape.
Private investigators obtain the evidence, but what the client chooses to do with it, is their business. If you are thinking about hiring a PI to obtain evidence for you remember this. Once evidence is obtained and you take that person back, that evidence is no longer useful to you in future court cases.

Private Investigators Join Search for Dylan Redwine

Posted: Tue 10:05 PM, Feb 05, 2013
Reporter: David Nancarrow
Updated: Tue 11:42 PM, Feb 05, 2013 Back to HomePage
Private Investigators Join Search for Dylan Redwine


The father of a missing boy from the Colorado Springs area has asked local private investigators to join the search. Dylan Redwine went missing last November.

Hundreds of volunteers have given their time to search for the missing 13-year-old.

Tracy Kostecki is now one of them.

"It's difficult because all of us have our children; it puts it on a real personal level," Kostecki said Tuesday.

She is a private investigator with Colorado Springs based Rocky Mountain Investigations. Dylan’s dad Mark asked the team to join the search. They agreed to join the case pro-bono.

They’ve now traveled a number of times to where Dylan disappeared near Durango, going back over areas that have already been scoured.

“There's a lot of information out there, new information that I don't think has been looked at,” Kostecki said. “Everything is promising at this point.

Although she can't give specifics, Tracy says Dylan’s dad is cooperating. She's looking for any and every small hint.

"The most important goal is finding what happened to this little boy," she said.

Even the smallest useful piece of information could be the key to solving this mystery.

Dylan’s family here is holding a celebration in Monument Wednesday, which is Dylan’s 14th birthday.
It’s at Limbach Park on Front Street at 6:30 p.m.

Quartzsite says investigation legit, vows to bring illegal voters to justice

The Town of Quartzsite’s procurement of private investigators to find evidence of voter fraud in the last election is authorized by state statute, according to a statement sent Friday to Parker Live by Town Manager Alex Taft.

The statement says the Town investigation is working on finding evidence that voter fraud occurred in the May election, which elected Ed Foster, Mark Orgeron and Pat Workman.

Workman recently filed a complaint with the Arizona Attorney General’s Office regarding checks written to the investigators, which she says total more than $30,000 so far. Workman’s complaint alleges that the Town Council did not authorize the payments.

While the Town did not confirm the amount paid to the investigators, its statement says the payments are valid under the authority given to Town Attorney Martin Brannan by state statute, citing ARS § 16-1021, which says that the “town attorney may enforce the provisions of this title [governing lawful elections] through civil and criminal actions.”

It adds that the investigators were hired pursuant to section 3-409 of the Town Code, which “permits contracts with professional service providers apart from the standard bidding requirements of Quartzsite Revised Town Code Article 3-4. The procurement of these professional services is substantially related to the authority granted to the Town Attorney by the Arizona Legislature and the services were lawfully procured.”

The Town says its investigation into the voters in the May election is “ongoing”:

“…the information obtained at this point will remain confidential to prevent the destruction of evidence and to protect those whose activities, while apparently suspicious, may yet prove to be lawful. The Town is working diligently toward acquiring prima facie evidence of voter fraud and hopes to gain the assistance of the Arizona Attorney General, the Arizona Secretary of State and/or the United States Department of Justice in bringing those individuals who voted illegally to justice.”

Speaking to KLPZ radio on June 14th, La Paz County Recorder Shelly Baker said she had been co-operating fully with the investigators, but said they had not found voting irregularities. Baker has not been on the record about the results of the investigation since June, but said Friday that the investigators were “very professional” and “went through everything with a fine tooth comb.”

She added that the work of the investigators was wrapping up and the Town of Quartzsite should have a report from them soon.

Ontario private eyes nabbed in Turks

Published on Wednesday September 05, 2012
Kevin Donovan
Staff Reporter

DAVID COOPER/TORONTO STAR Elaine White once worked for forensic accountants in Toronto. She is in a Turks and Caicos jail awaiting a hearing Friday.
Two Canadian private eyes accused of defrauding divorce and business clients have been nabbed by police in the Caribbean where they have been island hopping for three years.

Cullen Johnson is a former aide to a Toronto police chief. Elaine White, his wife and partner in alleged crime, once worked for forensic accountants in Toronto. They are in a Turks and Caicos jail awaiting a hearing Friday.

A Toronto Star investigation in 2009 exposed an unusual scheme: Both were accused by former clients (and later the police) of forging and selling bank records that made clients believe an ex-spouse, friend or employee had millions of dollars stashed offshore. One case involved a group of lottery winning friends led to believe one of their group swindled the others.

Shortly after the pair pleaded not guilty to fraud charges in Newmarket court in late December 2009, they flew south and set up shop in the Bahamas, calling their new private-eye company Internal Affairs Global, boasting a crack investigation squad that could pierce any banking veil.

On Wednesday, immigration agents in the Turks and Caicos arrested Johnson, 64, and White, 69. Police in Ontario say the pair had overstayed their Turks’ visa. A routine check turned up warrants for their arrest filed internationally by the Ontario Provincial Police, stories in the Toronto Star and their Panamanian-based website.

“Our folks are in touch with the authorities in the Turks,” said OPP spokesman Sgt. Peter Leon.

He said the OPP is exploring options to get them back in Ontario. Extradition is one option, but there may be an easier route. “The (Turks government) may deport them. If we know they are coming, we will be waiting for them.”

The Star’s probe of Johnson and White turned up a series of authentic looking bank statements sent to numerous clients for a fee.

In one case, well-respected former Ontario Liberal MPP Eric Cunningham was a target. Cunningham and his wife were in court on divorce proceedings in 2005. In a case that took years, his ex-wife presented banking documents obtained from the detectives that made it look like the former MPP was a wealthy man with assets offshore, an incredible $2.3 million in accounts flung as far as the Cook Islands, Panama, the Bahamas, Hong Kong and the Cayman Islands.

All false, two judges said, vindicating Cunningham. But the case took a financial toll on him as he had to pay lawyers for years to defend his case. His ex-wife’s father funded most of the investigation of Cunningham, but private eyes cooked up the false documents.

In Cunningham’s case and others, the detectives are accused of doing a sort of financial striptease for clients, showing clients (his ex-wife in this case) more and more documents depending on how much they paid in fees. The Holy Grail which clients would finally get (all forged) was the signature card “proving” who had opened the offshore account.

Cunningham said Wednesday he is cautiously pleased. “The wheels of justice grind, but they grind slowly,” said Cunningham, a communications consultant who said he would be happily retired were it not for Internal Affairs.

The Star stories revealed how the Ontario government has little control over the private investigators it licenses. Not much has changed since then, though a top official lost his job.

In another case, four Toronto Catholic School Board employees who were good friends routinely played the same lottery numbers, hoping to make a big score and retire early. One day, one of the four did a random check of the Ontario Lottery and Gaming Corp. website and learned the group’s ticket had won $5.7 million six months earlier.

Suspicious of the friend who had checked the number at a convenience store, the group hired Internal Affairs. A “banking sweep” turned up records that appeared to show the friend had won, and sent the money offshore to Barbados and Switzerland. The group confronted their friend who said the convenience store owner had told her they did not win.

An investigation turned out that the store owner was the thief, and he had closed his shop, bought a mansion, a Tim Hortons franchise for his son and several cars. The lottery corporation reimbursed the four friends and the store owner pleaded guilty to fraud.

Johnson and White are also believed by investigators to be behind a series of forged documents that suggest federal minister Julian Fantino, Cunningham, other politicians and a “yellow” journalist at the Star are involved in a bizarre, fictitious financial conspiracy called “Superstar Corruption.”

In a previous interview by email in 2010, Johnson both attacked the Star’s credibility and protested his innocence. In other correspondence, Johnson has mused about his predicament, unable to come home to see family.

“I’ve always liked the Kenny Rogers ballad, ‘The Gambler.’ Good advice. Know when to hold ’em and know when to fold ’em,” Johnson wrote to the Star at one point. He ended on a cheery note. “As they say at McDonald’s, “Have a nice day!”

Do not try this on your own!

I’ve had the opportunity of working with a client that had already attempted his own investigative work. He thought he knew the man that was living with his former wife and small son. I took this mans case because he told me his attorney, let’s call him Mr. Good, after chastising him for his actions, had referred him to me to conduct a background on this man. I knew this attorney very well as I have done business with him for many years. He has even written about some of my cases conducted for him on his website, not mentioning any names in order to maintain confidentially.
This case was only 3 days in progress when the client started to show his true colors. During the background process I found out he had given me the wrong name, age, address and arrest for subject, etc. I also found out he had only spoken with Mr. Good and had not retained him. This was not the statement the client gave to me earlier when we spoke about his case.
I uncovered some information that I had to rule out involving a possible sex offender since the welfare of a little 4 yr old boy could be at stake. It became necessary I speak with local law enforcement. Once I spoke with the sheriff’s department regarding this unknown man, things became pretty sticky in a short amount of time.
To make a long story short, the client was the one that was almost arrested for stalking and still may be if he continues on the same path.
The moral of this story is simply this: Do not attempt your own investigation and do not ever give your private investigator and or attorney the wrong information. It is always best to just say you don’t know. It always best to be willing to pay for an investigation by a state licensed investigator and leave the investigating to us.
Remember the saying, “Only a fool lies to his attorney and investigator.”
Ok, the last part about the investigator might be my saying, but nevertheless, still true.