Managing Client Emotions in Forensic Accounting and Fraud Investigation. Stephen Pedneault

had happened with the transfer. Things seemed to be going well for the beneficiary's case. Next, opposing counsel put the nephew on the witness stand. The nephew told the court about how much his aunt wanted him to have the house and live on the property. He described his life before he moved into the house and noted how his life had significantly improved after receiving it.

      Although we thought his story was irrelevant, opposing counsel's strategy was to have the judge hear it. The case ended with final arguments, and we then waited for a decision.

      There is no other way to describe our reactions to the decision than “blown away.” Even though the law was in the beneficiary's favor, as were the medical records and testimony of the caregivers, the judge ruled to allow the nephew to keep the house. I observed the shell‐shocked and disbelieving look on the beneficiary's face, and I knew it would transition from disbelief to anger, so I quickly escorted him out of court and to his car. As we walked, he asked me what had just happened. I told him I had no idea. We waited by our cars for his attorney, and when the attorney arrived, I asked him to explain the ruling. The law had been on our side, the facts had been on our side, and the witnesses had been on our side. I said it appeared pretty clear to me that what the attorney had done constituted buying off the nephew to stop him from looking into his aunt's financial affairs. The beneficiary asked his attorney how the judge could rule in favor of the nephew keeping the house.

      The attorney responded: “The judge made an emotional decision today, not a legal one.”

      I wondered, “What does that even mean? That judges can disregard the laws and make ‘emotional’ decisions?” I asked the attorney how this was possible.

      The attorney replied, “It happens sometimes.”

      In the meantime, the beneficiary was growing more and more angry. He verbalized his anger, citing the amount of time and money that he had spent getting to today's trial date, only for the judge to make an emotional decision. Suffice to say, he was upset. I calmed him down enough for him to drive and waited until he and his attorney had left in their cars.

      I too was shell‐shocked and angry at what had just happened. It had shattered my belief that judges who hold the highest position within the legal system would reach emotional decisions.

      The good news in this matter: Subsequent actions taken by the beneficiaries resulted in the recovery of the house from the nephew as well as the recovery of $4.8 million in diverted funds. However, this recovery did not take place until the beneficiaries had spent even more money and the fiduciary attorney had been prosecuted and convicted.

This case illustrates how a fraud examiner can experience emotions similar to those of his clients while working on an engagement. While it's important to not become too emotionally involved in client cases, I know that, once retained, I become very intimate with the details of a case, often knowing them better than anyone else. I also know (or at least choose to continue to believe) that if everything works as it is supposed to, then the system will prevail in favor of the truth, and the right decision or outcome will be achieved. Sadly, there is no guaranteed outcome when it comes to court and legal proceedings, even with the best evidence to support a client's position. Fraud examiners are human, and it's hard not to feel the same emotional reactions as clients – especially when you've invested so much effort into determining what actually happened – only to have the legal process reach a decision that is contrary to the evidence. Unfortunately, that does happen sometimes.

      To make matters worse, after receiving an unfavorable decision or outcome, we must close the file and send the client a final invoice. We know we are just concluding our involvement and that the client expects to receive a final invoice, but we also know how the client may react when they receive it (along with their attorney's bill). It's only human for the client to be not only angry at losing a case but also angry at having to send additional funds to pay for outstanding costs. In some cases, you will receive full payment from the client, but in others you can expect to do some level of bargaining and compromise in order to get the final payment.

      In the next chapter, we discuss complicating factors when it comes to dealing with client emotions.