Week 11: Financial Analysis / Profiling - Undermine Defences

Question 1

Financial Analysis: What are the 4 main profiling methods

Answer 1

• Full net worth method
• Source and Application of funds (expenditures method).
• Bank analysis
• Unit & volume analysis

Question 2

Financial Profiling - Net worth analysis

Answer 2

• used for mid to high value targets with tangible assets (houses etc.)
• any increase (or decrease) in net worth from year to year must be as a result of some income (or loss)
  1. Assets - (less) Liabilities = net worth
  2. Net worth - prior year net worth = net worth increase / decrease
  3. Plus living expenses = expenditure (required income)
  4. Minus funds from known sources
  = Funds from unknown sources

Question 3

Financial profiling - Expenditures Method (source & application of funds)

Answer 3

• Used for: Targets with low assets, high lifestyle
• focuses on the target’s spending rather than assets.
• spending vs. all known sources of income.
• Look at what the target has spend in a given time period. Look at their known income in that period. If their spending is greater than their known income then the difference is funds of unknown source.

Question 4

Financial Profiling - Bank Depositis Analysis

Answer 4

• targets who make extensive use of banking. Can be useful for companies
• check all incomes from all accounts (ignore transfers within), add cash expenditures. This results in total income
• it is based on records that are third party (bank) & reliable.

Question 5

Financial Profiling - Unit & Volume Analysis

Answer 5

• Businesses - estimation of sales proceeds (incl drugs)
• Estimate sales based on known purchases of consumables or other info.
• Using towel usage as a means to estimate the number of customers at a restaurant

Question 6

What are the 4 main defences used by criminals?

Answer 6

• Cash on Hand story (cash accumulated over time and hoarded)
• False loan, inheritance, gifts or windfall stories
• it’s not mine I’m looking after it (or car is insured in my name but belongs to someone else)
• husband / wife defence (yes it’s in both our names but he / she bought it)

Question 7

Cash on Hand Defence - How to dismantle it

Answer 7

• where did it come from? from who and where?
• where was it stored?
• why not in bank?
• who saw it / knows about it

Question 8

False loan / inheritance / gifts / windfall stories - how to dismantle

Answer 8

• investigate the sources, are they capable of making such a gift / loan etc
• records and paperwork?
• did it go through a solicitor?
• is the actual transfer of the ‘gift etc’ documented? STRs?
• If cash why? How?

Question 9

It’s not mine I’m just looking after it (or I’m insured to drive it, but it doesn’t belong to me) - how to dismantle

Answer 9

CAR
* who is the BENFICIAL OWNER
* who pays for runnning costs etc?
* who uses most - traffic stops ANPR camera etc

CASH
* who are you looking after it for?
* why?
* for how long?
* evidence of agreement on phone etc

Question 10

Jointly held by husband wife - how to dismantle

Answer 10

• trace funds used to pay for the asset
• examine transfer documentation e.g. if asset is house a conveyance file may show source of funds on settling house purchase.
• consider doing regressive net worth analysis on spouse around time of purchase (i.e go back a year and look at increase of assests)