Fraud examiners should ensure that all the communications on a matter comply with counsel's expectations to best ensure the attorney–client privilege throughout the duration of the matter. In most cases, the attorney will request to be included on all communications, and you should expect to include the attorney on all communications even when the client fails to do so.
If a client communicates with us without including their attorney on the exchange, our practice is to add the attorney back onto our responses and add a reminder to the client to be sure to include the attorney on all future communications. Although many clients will comply with your reminder, many will not – for a variety of reasons, including trying to minimize the attorney's billable time on the matter. Regardless, we add the attorney and the reminder every time.
In some cases, a client will become angry after you add the attorney back on to the communication and will call or send you a heated email. Once they vent, remind them that the attorney–client privilege is there to protect them and prevent any unwanted disclosure of information about their matter. My experience has been that the client will understand this explanation, and the issue will go away – at least until the next time their attorney is added back onto a communication. Remember: Your persistence is more important than their reasoning for not wanting to include their attorney on communications.
In our first meeting, we also discuss the different emotions the client will likely encounter while their matter is pending resolution. We tell them they will probably become frustrated – if they are not already – due to the time it takes to resolve financial matters. We tell them that they may get angry at times, possibly because of delays or costs or because of an unfavorable decision or limitation in their case. We tell them that we will be patient and responsive and will give them the best information available each time they reach out to us. However, they can expect at times that we may not have much information with which to update them.
We try to end each initial meeting by setting the client's expectations at a realistic level. By doing so, we create a way to bring the client back to reality when they have bad days during the pendency of their matter – and they will have bad days.
As cynical as this may sound, after 31 years of experience in this field, I tell clients to set their expectations at “disappointed.” I tell them that, in the end, if they are disappointed by the ultimate outcome of their matter, then their initial expectations have been met. If the outcome or results exceed their expectation of disappointment, then they will have done better than most.
I learned this strategy (which I like to call “Sales 101”) through manager training I received working at a public accounting firm. The training we received was based on sales training used by car dealers with their sales staff. There, I learned that the recipe for satisfied customers was to meet or beat customer expectations every time. The only way to accomplish this regularly was to set customer expectations at a realistic level. Sadly, I have found that most fraud cases result in disappointment at some level, whether it relates to the amount recovered, the consequences and accountability (or lack thereof) for the perpetrator, or the court's decision against the client's position.
The fraud examiner, also, must set his or her sights on a likely disappointing outcome, since it's difficult to predict how cases will play out in a court of law. In such cases, it's difficult not to absorb some of the client's emotions – as is illustrated in the following story.
We were retained to work with counsel to investigate a fiduciary's actions within an estate and a conservatorship. A fiduciary is someone who is put into a position of trust over someone else's assets and affairs. The beneficiaries of an estate had retained counsel and claimed that the fiduciary, who was also an attorney managing the estate's financial affairs, was stealing from the estate and conservatorship. The estate in question belonged to a husband and wife who never had any children. The beneficiaries to the estate, all relatives, lived out of state. The court named the attorney as the woman's conservator, which created the fiduciary position.
The woman had contacted her relatives and, during their discussions, indicated that she thought the attorney was stealing from her. The family was angry at the news but lacked local resources to oversee the attorney's activities. The woman's relatives contacted local counsel, who in turn retained our services.
One of the aspects of this case involved the woman's physical estate, upon which there was a primary residence and a guest house. During the period that the attorney was the fiduciary, long before our involvement, one of the woman's nephews had started looking into the finances handled by the attorney. The more the nephew investigated, the more he discovered things that made no sense. The nephew visited the house and saw how the attorney and his wife controlled nearly every aspect of his aunt's life. It appeared to him that his aunt was solely dependent on the attorney and his wife and lacked the freedom to do anything for herself, including going to the market and the bank. The more the nephew learned what was happening, the more he grew suspicious.
Those involved in this case believe that at some point the attorney became aware of the nephew's observations and decided to meet with the nephew. To this day, neither the attorney nor the nephew will confirm the meeting or discuss what transpired during it, but afterwards, the attorney transferred the house at the back of the estate into the nephew's name. Once the house was transferred, the nephew moved in and made the house his primary residence. After the transfer, the nephew never gave us any further details, nor did he cooperate with the investigation.
Laws require that fiduciaries, such as conservators, obtain the court's permission prior to selling or transferring significant assets, such as real estate. In this case, the attorney neither requested nor provided such permission. This was a significant factor in the beneficiaries seeking to have the house transfer reversed and the house placed back into the estate.
The land record reflected a transfer form signed by the aunt, with an “X” as her signature. Counsel for the beneficiaries requested copies of the woman's medical records and also interviewed in‐home care staff who were present during the period when the transfer took place. The medical records showed that the woman suffered from dementia and other significant health issues and had been primarily bedridden at the time of the transfer. The caregivers stated that the woman would not have known what she was signing at the time of the transfer. These additional factors gave the beneficiaries hope of recovering the house back into the estate.
The fiduciary attorney had stated through his counsel that the aunt told him she wanted her nephew to have the house and told the attorney to transfer the house into the nephew's name. The attorney said he had witnessed the woman sign the transfer form and that she had signed her name with an “X,” as she commonly did around that time period.
We discovered no other documents signed by the aunt, let alone any signed with an “X,” since the attorney had signed nearly all transactions using his name and the phrase “as her conservator.” This was yet another significant piece of information.
One particular beneficiary, angry that the attorney had exploited the woman, brought an action in court to recover the house. Given the information surrounding the transfer, it appeared a court would see what happened, determine it was a fraudulent transfer, and revert the house back to the estate.
Months passed after the lawsuit was initiated, and the beneficiaries grew more and more frustrated at the delay caused by the process, especially knowing that the