CoMetrics Lender Advisory Collateral Examination Uncovers Fraud

CoMetrics Lender Advisory pic
CoMetrics Lender Advisory pic
CoMetrics Lender Advisory
Image: cometrics.nyc

An accounting/transportation distribution graduate from Syracuse University, Gary D. Herwitz serves as managing partner at CoMetrics Partners LLC. From the head office in New York City, Gary Herwitz steers the consulting firm’s operations, which include lending advisory services.

CoMetrics Lender Advisory (LAS) is designed to offer banks, financial companies, and other lenders assistance in determining the accuracy of a borrower’s collateral. Recently, LAS was engaged by a bank to perform a four-day collateral field examination on a middle market furniture importer and distributor. Leveraging the expertise of management to perform auditing procedures not performed in typical in house collateral field examinations, LAS performed tests in late 2015 that uncovered a worrying over-advance position of the furniture importing company. Further tests revealed that the company had fraudulently claimed assets that were not theirs.

LAS reported its findings to the lender, who requested that the examinations be extended to include quality of earnings testing. This involves assessing the furniture importer’s IT systems, financial reporting practices, and internal controls. Conducted over a period of two months, the quality of earnings tests confirmed the fraudulent transactions.

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