Glenn Pomerantz has over 35 years of forensic accounting, auditing and consulting experience, specializing in investigations, compliance, due diligence and dispute resolution. He leverages resources from his network of over 100 BDO member firms and technology professionals to assist domestic and international clients with complex matters including those related to monitorships, financial reporting fraud and asset tracing and recovery. Mr. Pomerantz is a frequent speaker at Global and national conferences as well as an author on the topics of asset recovery, investigations and compliance.

What is the most rewarding part of your asset recovery practice?

Assisting in the recovery of stolen funds for victims is by far the most rewarding part of our forensic practice. Watching a client’s attitude transform from down and defeated to hopeful, and ultimately, successful, makes the very difficult work of asset recovery worthwhile.

In your opinion, what is the most important quality for a successful asset recovery expert?

A forensic accountant practising in asset recovery must have skills, experience and instinct. By skills, I mean not only competence in books and records analyses, but also the ability to identify assets through publicly available information and other means of corporate intelligence. Experience is often a fair gauge for whether the expert has accumulated the requisite forensic accounting skills. Instinct is often confused with experience but there is an innate ability among some of the more successful forensic accountants.

How has the rise of blockchain technology affected the feasibility of recovery?

Blockchain-based digital assets bring unique challenges and new opportunities for forensic accountants and investigators seeking to trace them and attempt their recovery. The public nature of blockchain transactions makes transaction data easier to obtain for analysis; however, sophisticated blockchain analysis tools and expertise in using them is required to be effective. Blockchain transactions can be obfuscated through mixers, privacy coins, chain-hopping and use of illicit exchanges resulting in activity that can be very difficult to trace; however, transactions can still be traceable using new advances in blockchain analytics tools and investigative techniques. In addition, inevitable mistakes can be made by those attempting to conceal the source, nature, and beneficial ownership of digital assets because the end result of blockchain transactions is most often the conversion of those assets to fiat currency for use in the traditional banking system through a virtual asset service provider (“VASP”), such as an exchange. Once blockchain-based digital assets are traced to a VASP through analysis of transaction data, a wider range of investigative tools and legal processes exist to aid in recovery efforts.

What are the unique challenges involved in tracing cross-border transactions?

Challenges in cross-border asset training include laws and regulations that can serve to protect fraudsters and shield assets, including data privacy and data protection laws that vary substantially between regions and countries. Political factors, including the political climate and conflicts of interest can present significant challenges, as does access to law enforcement. Other challenges include the use of digital assets to hide and disguise the proceeds of fraud and counter-intelligence measures levied against investigators, both of which can complicate the tracing and recovery process.

How do you advise your clients on best practices to prevent fraud?

Most schemes arise as a result of specific internal control breakdowns. Even the best-designed controls can be defeated through human error or overridden by employees. For instance, when a poorly trained or inexperienced employee bypasses controls in the interest of expediency. Examples include rubber-stamping approvals without conducting adequate diligence or bypassing dual authorisations. Other instances of control failures arise from overwhelmed or underqualified employees handling high-risk transactions. Organisations can mitigate the risk of control failures through mitigating controls, including redundant procedures such as random control checks, analytics, journal entry review and by properly segregating duties.

During your 35-year career, what has been your most memorable case to date?

Several years ago, I worked on a significant procurement fraud case in a highly technical area of a company within a specialised industry. This investigation comes to mind because of the manner in which the key evidence was discovered. We could not find documentation to substantiate a fraud that had commenced 20 years prior at a predecessor company that was acquired. While searching for the evidence in the basement storage facility, a BDO professional stumbled upon microfiche records and innocently asked what microfiche were. Within a few days we had rented a microfiche reader and armed with 25-year-old general ledger records, achieved a $50 million recovery for the client. Such random acts have reoccurred throughout my career but were often the result of perseverance and hard work.

How do you plan to refine BDO’s asset recovery capabilities as global forensics practice Leader over the next few years?

My plan for BDO’s asset tracing and recovery practice is focused on four areas – to continue:

1) Significant investment in crypto training and tools to educate investigators both domestically and internationally with advanced knowledge in the digital asset space,

2) Expanding capabilities abroad having become one of the few firms that can provide asset tracing and investigative services in over 100 countries,

3) Investing in additional forensic labs within the Middle East and Africa and further expand our forensic technology capabilities in Asia and Latin America and finally,

4) Investing in a multi-disciplinary approach to asset tracing that includes insolvency, corporate intelligence and forensic accounting professionals who combine their experiences and technologies to serve our global clients.

You have enjoyed a very distinguished career so far. What would you like to achieve that you have not yet accomplished?

My goal for the next few years is to continue to recruit and mentor our future leaders. When it is my turn to pass the torch, I want to make sure that BDO’s forensics practice is well-positioned to sustain itself as a premier global forensic and asset tracing practice for many years to come.