When your business is audited, it’s normal to feel nervous. But when that audit takes a sudden turn—and law enforcement gets involved—the fear becomes real. If you’ve just been notified that your business is under investigation for fraud following a financial review or audit, it’s time to act fast, think strategically, and protect everything you’ve built.
Below, the white-collar defense team at Simmons & Wagner, former Orange County District Attorneys, breaks down what’s likely happening behind the scenes, what the investigators are looking for, and most importantly—what you need to do right now to defend yourself and your business.
From Routine Review to Criminal Inquiry: How It Happens
Many fraud cases don’t start with an angry whistleblower or a dramatic FBI raid. They begin with something much more mundane: a routine audit. This could be an internal audit, an IRS review, or a compliance check from a regulatory agency.
What triggers escalation?
- Inconsistencies in your financial records (revenues, costs, payroll, invoices)
- High-risk red flags such as multiple “revised” statements or suspicious write-offs
- Employee complaints that prompt deeper scrutiny during the audit
- Third-party discrepancies, like vendors or clients reporting issues with payments or taxes
- Cash-heavy operations with unexplained profit or expense margins
Once an auditor sees something they believe could involve intentional deception, they’re often required to refer the matter to law enforcement, including the IRS Criminal Investigation Division, the California DOJ, or even the U.S. Attorney’s Office.
What Investigators Are Looking For
Make no mistake: if you’ve gone from audit to investigation, the narrative has shifted. Auditors check for accuracy. Investigators assume intent. Prosecutors are now looking for evidence that you or someone within your company:
- Knowingly altered or misrepresented financial statements
- Created false invoices, receipts, or payroll entries
- Misled lenders, government agencies, or investors
- Used shell companies or off-the-book accounts to hide revenue
- Conspired with others to commit accounting fraud or tax evasion
They may now begin pulling your bank records, text messages, emails, and QuickBooks entries—often without your knowledge—building a case before you even know what hit you.
What You Should Do Immediately
If you’ve been told your audit has triggered a criminal investigation, you need to act like you’re already being charged—because in many cases, charges are the next step. Here’s what to do:
1. Stop Talking to Investigators Without a Lawyer
Even a casual conversation can be used to incriminate you. Anything you say can be twisted into a narrative of guilt.
2. Hire a White-Collar Defense Attorney Immediately
This isn’t a job for a general business lawyer or your corporate counsel. You need someone who knows how prosecutors think—because they used to be prosecutors themselves. Simmons & Wagner served as Orange County DAs and now use that experience to dismantle fraud cases from the inside out.
3. Preserve All Documents and Communications
Deleting emails or “cleaning up” records can backfire badly and be seen as obstruction of justice. Preserve everything and hand it over to your defense team for review.
4. Don’t Confront or Instruct Employees
Trying to “coach” your team could damage your credibility and your case. Let your attorney handle all internal communications and strategies.
5. Prepare for a Long Game
Fraud cases are complex and often take months—or even years—to resolve. Patience, discretion, and excellent legal representation are your best tools.
Why Simmons & Wagner?
At Simmons & Wagner, we’ve sat in the prosecutor’s chair. We know how fraud investigations unfold because we used to run them. Now, we fight for business owners, executives, and entrepreneurs accused of fraud to help them stay out of prison, protect their livelihoods, and defend their reputations.
Whether you’re dealing with a federal grand jury subpoena, IRS CID interview, or California DOJ inquiry, we know how to step in quickly and control the narrative before charges are filed.
Don’t Wait for Charges—Build Your Defense Now
If your audit has turned into a criminal investigation, don’t wait to “see what happens.” What happens next could define your future.
Contact Simmons & Wagner today to schedule a confidential consultation with experienced business fraud attorneys in Orange County. We’ll evaluate your situation, guide your next steps, and immediately begin preparing your defense.