Fraud Examination Case Study City of Bradford

Individual Case #3

City of Bradford

1. Yes, there is adequate predication.

a. Three things stick out to me. First, that there were no comparable parcels outside

of what was eventually purchased by the airport authority. Second, all appraisals

were performed by the same appraiser. Third, some prices paid to Krandall

Development, Ltd., who sold the airport authority the majority of the land

acquired, were higher than parcels purchased from others. The fact that the real

estate purchases came in over budget is not an indicator. It is common for projects

of this nature to be over budget.

2. One theory is that Krandall colluded with the appraiser to artificially inflate the value of

the land being sold by Krandall. To avoid detection, the two parties used parcels of land

that were going to be purchased by the airport authority as comparable parcels. Krandall

may have also colluded with someone at the airport authority to get approval for the

inflated purchases.

3. Look for related parties between the airport authority, the appraiser, and Krandall. Seek

another appraiser to evaluate the land and outside comparables. Perform analytic

procedures on financial information related to the acquisition of land by the airport

authority.

4. Examine the contracts with the appraiser and with Krandall. Examine the public records

relating to the purchase of the land by Krandall and subsequent selling to the airport

authority. Examine lists of the employees and owners of the appraiser’s office, of

Krandall and the airport authority.

5. I would interview the appraiser, people involved in the decision making process at the

airport authority, and those at Krandall involved with the sale to the airport authority.