Lecture 11 - Undermining Stories And Net Worth Method Flashcards
How do you perform the full net worth method?
1 - Calculate the value of their assets, and the value of their liabilities. Remove the value of liabilities from value assets to get net worth:
Assets - Liabilities = Net Worth
2 - Subtract the previous year’s net worth to get the net worth increase/decrease:
Net Worth - Previous Year Net Worth = Net Worth Change
3 - Add on their living expenses to find their income:
Net Worth Change + Living Expenses = Income
4 - Subtract funds from known sources to find funds from unknown sources:
Income - Known Sources = Unknown Sources
Explain the process for Bank Deposit Analysis
1 - Take the total of all deposits to all accounts they own
2 - subtract any transfers between these accounts and re-deposits:
Total - transfers/redeposits = Net Deposits
3 - Add cash expenditures:
Net Despoits + Cash Exp = Total Receipts from All Sources
4 - Subtract funds from known sources:
Total Receipts - Known Sources = Unknown sources
List and explain the four main defences used by suspects
Cash-on-hand - claims they had a large cash hoard. Counter with asking where it came from, who it came from, who knew about it, when did they get it, and why wasn’t it in a bank
False loan/inheritance/gift/windfall - Investigate the claims/source - did the gifter have the funds to send it, is there documentation, why was it a gift etc.
Holding for someone else/insured in my name but belongs to someone else - ask who pays the running costs, who uses it, who has beneficial ownership
Jointly held by couple/in both their names but my partner uses it - trace the funds to buy the asset, look at transfer documentation (e.g. conveyancing fees), consider regressive net worth analysis on both parties at time of purchase
Explain the Expenditures Method (AKA Source and Application of Funds)
This is a simple formula, where all known sources of funds are subtracted from the total spending to find the unknown funds:
All Spending - Known Sources = Unknown Sources
Give an example for Unit and Volume Analysis
This can be used to estimate company sales based on known purchases of consumables and other information.
Example - using towel usage to estimate number of customers visiting a brothel
Example - using coal purchases to measure genuine business by a coal sales business used as a drug dealer front
Who is the Full Net Worth Method best used for?
Targets with tangible assets e.g. houses, cars, jet skis
Who is the Expenditures Method best used for?
What advantage does it have over the Full Net Worth Method?
Targets with low assets but a high lifestyle, such as drug dealers.
It is a simple method that is easier for courts and juries to understand.
Who is the Bank Despoit Analysis best used on?
Targets who make extensive use of banks and deposits
Who is the Unit and Volume Analysis best used on?
Businesses to estimate their sales proceeds
