Cerebra supported the victim company to recover loss of EUR 815.000 by uncovering fraudulent activities

SITUATION  

Our client, a multinational food company, contacted Cerebra through their law firm in Turkey. The client suspected that their sales manager in Turkey had secretly established a firm with a distributor and was diverting company sales to this new entity. They requested Cerebra to calculate the potential loss caused by these suspicious activities. 

OUR SOLUTION 

Initially, Cerebra held a series of meetings with the law firm and the client’s overseas executives to understand which customers the sales were being diverted to and the details of their suspicions. 

We received some correspondence between the suspicious sales manager and customers. These messages clearly demonstrated that the sales manager and his assistant were coordinating to direct sales to the newly established company. 

Before calculating the loss, we decided to categorize the customers whose sales were redirected to the new company into two groups. As the correspondence with the first group of customers revealed clear evidence of diversion of sales transactions, we included these customers in the damage calculation 

Although there were some suspicious findings regarding the second group of customers, we did not include them in the damage calculation directly due to insufficient evidence. However, in our fraud investigation report, we noted that if further information and documents regarding these customers are obtained in later stages of the legal process, we could assess whether the sales decline was a result of diversion. 

Methodology for loss calculation 

Detailed analysis of the sales data showed that the victim company’s sales began to decline significantly from 2021, the year the suspicious firm was established. 

We compared the sales volumes to the customers included in the loss calculation for the fiscal years before and after 2021 to determine the sales decline. Then, we calculated the profitability per ton for the same period and multiplied it by the decrease in sales to estimate the potential loss. Based on our analyses, we calculated the company’s potential loss to be EUR 815,000. 

In the next phase, we presented our forensic accounting and fraud investigation report, including detailed customer analyses, our loss calculation methodology, and other findings, to the law firm for use in the legal case. 

OUR IMPACT 

The law firm submitted our report to the prosecutor, requesting access to the suspicious company’s financial data and this request was accepted.  

With the concrete evidence provided by Cerebra and the close monitoring of the case by the company’s lawyer, the defendants requested a settlement meeting with our client. Following a series of meetings conducted by the company’s lawyer, the defendants initially offered EUR 500,000 for the case withdrawal. After further negotiations, the defendants agreed to pay the full EUR 815,000 as determined in our report, and the parties reached a settlement.