Podcasts

Hidden in Plain Sight: How Yale Missed a $40 Million Procurement Fraud

Earmark Team · May 21, 2025 ·

For years, Yale University School of Medicine administrator Jamie Petrone lived a lifestyle far beyond what her job title suggested. She drove a Mercedes-Benz G550, a Range Rover Autobiography edition, and other luxury cars. She owned three houses in Connecticut and another in Georgia. Her social media accounts showed off her wealth for everyone to see. Yet it took nearly a decade before anyone at the prestigious Ivy League school asked how she could afford it.

The shocking truth: Jamie was orchestrating a massive fraud from inside Yale. She secretly ordered thousands of tablet computers—mostly Microsoft Surface Pros—and shipped them to an out-of-state business. That business paid her personally through her own company’s bank account. By the time an anonymous tip finally exposed the scheme in 2021, Yale had lost more than $40 million.

As told in an episode of Oh My Fraud, this case represents one of the most significant procurement fraud schemes ever perpetrated against an academic institution.

A Trusted Employee Exploits the System

Jamie joined the Yale School of Medicine’s Department of Emergency Medicine in 2008 and rose to become Director of Finance and Administration by 2019. With years of experience, she knew Yale’s procurement procedures inside and out, giving her the perfect roadmap to commit fraud.

In 2020, Jamie’s supervisors questioned why her department’s budget showed a big spike in computer purchases. She claimed the department was updating equipment and collaborating on a new project with Yale New Haven Health. No one pressed her further.

The $10,000 Threshold Trick

One simple rule made Jamie’s fraud possible: She could approve any purchase under $10,000 without extra oversight. Rather than submitting big orders for 50 or 100 tablets at once, she broke them into smaller requests—each one kept below the $10,000 limit. With no second approval required, her orders sailed through accounting.

According to the FBI, Jamie placed thousands of these small orders. In one case, she directed a coworker to purchase 100 Surface Pro tablets in 13 separate purchase orders. Twelve orders were for 8 tablets each, totaling about $9,100 each, and one order was for 4 tablets at $4,551. By splitting them up, she avoided the automated controls meant to detect high-value purchases.

Jamie then claimed the tablets were for department research or other official projects. Instead, she shipped them straight to a third-party reseller in New York, which sent payments to her company, Maziv Entertainment LLC. This arrangement racked up millions of dollars of profit, all at Yale’s expense.

Suspicious Spending Hiding in Plain Sight

While Jamie carefully hid the paper trail, she did not hide the results. She drove multiple luxury vehicles, including a Range Rover Autobiography and a Mercedes G550. She amassed four homes and flaunted her lifestyle on Instagram. Even without a full investigation, her lavish, conspicuous spending should have raised questions.

According to the Association of Certified Fraud Examiners (ACFE), “living beyond one’s means” is the top behavioral red flag among fraudsters. Despite this common red flag, nobody at Yale confronted the glaring mismatch between her university administrator salary and her multimillion-dollar expenditures—until an anonymous whistleblower reported seeing her load stacks of computers into her Range Rover in 2021.

The Anonymous Tip and FBI Investigation

In August 2021, Yale received a tip about large quantities of computer equipment leaving its campus. After confirming that Jamie was ordering suspiciously high volumes of tablets, the university notified the FBI. Investigators got a search warrant and began tracking packages Jamie sent from a FedEx location in Orange, Connecticut, to a reseller in New York.

Within days, they intercepted several boxes containing 94 Surface Pro tablets. Records showed she had recently placed a $144,000 order for more hardware—far beyond any legitimate department need. Realizing the investigation was closing in, Jamie turned herself in on September 3, 2021.

Guilty Plea and Aftermath

Jamie eventually admitted to the scheme, telling investigators she had done it for years—perhaps as many as ten. In March 2022, she pleaded guilty to one count of wire fraud and one count of filing a false tax return. She had not filed tax returns at all from 2017 through 2020, and earlier returns falsely claimed stolen equipment as business expenses.

In October 2022, Jamie was sentenced to nine years in prison. She forfeited six luxury vehicles, four houses, and more than $560,000 held in her company’s account. Yale’s official loss totaled $40,504,200. The U.S. Treasury was also shorted over $6 million in unpaid taxes.

Lessons for Every Organization

This fraud shows how easily a single employee can exploit weak procurement controls—even at an elite institution with a $41 billion endowment. Here are some key lessons:

No One Is Above Suspicion: Long-term employees often have the trust and insider knowledge needed to commit major fraud. Familiarize yourself with employees’ roles and watch for unexplained changes in lifestyle.

Monitor Repetitive Sub-Threshold Purchases: Splitting one large order into many small ones is a common trick. Regularly examine patterns of similar purchases under approval limits.

Heed Behavioral Red Flags: Living beyond means, unusual personal expenditures, or unexplained wealth should prompt further review.

Take Every Tip Seriously: The ACFE’s research shows that most frauds are uncovered by tips. Encourage a culture that supports whistleblowers and investigates promptly.

Don’t Overlook Tax Implications: Illicit income is still taxable. Filing false returns or failing to file can lead to extra penalties and charges.

Hear the Whole Story and Earn CPE

For more details on this case—along with expert insights on fraud and ethics—listen to the full “Oh My Fraud” podcast episode. You can also earn free CPE credit by enrolling in the course on Earmark.

The story of how such a large-scale fraud remained hidden for so long offers valuable lessons about the power of small gaps in oversight—and the big price organizations pay when those gaps go unaddressed.

When Trust Isn’t Enough: The $17 Million Betrayal of Baseball’s Biggest Star

Earmark Team · May 12, 2025 ·

In the world of professional baseball, Shohei Ohtani stands as a once-in-a-century talent. Four-time all-star Justin Upton called him “the most talented player I’ve ever seen.” Derek Jeter put it simply: “It’s tough enough to just be a great hitter or an offensive player, or to be a great pitcher. For him to be able to do both is pretty remarkable.”

Yet in March 2024, this modern-day Babe Ruth made headlines for something far removed from his athletic prowess. Federal investigators uncovered a shocking betrayal: Ohtani’s personal interpreter and closest confidant, Ippei Mizuhara, had stolen $17 million from the superstar’s accounts to fuel a devastating gambling addiction.

The Oh My Fraud podcast episode “Sho Me the Money” dives into this extraordinary case of violated trust and circumvented financial safeguards. What began as casual $50 wagers for Mizuhara spiraled into an all-consuming addiction that saw him placing an average of 21 bets per day—a staggering 19,000 wagers over just 29 months—while chasing losses that eventually totaled $40 million.

From Trusted Interpreter to Master Manipulator

When Shohei Ohtani arrived in America in 2018, he faced the challenge that confronts many international athletes—navigating a new culture and language under intense scrutiny. Ippei Mizuhara wasn’t just an interpreter; he became Ohtani’s lifeline in America.

Born in Japan but raised in the Los Angeles area since age seven, Mizuhara was well-positioned to bridge two cultures. He first met Ohtani in 2013 while working for the Hokkaido Nippon-Ham Fighters in Japan. When Ohtani signed with the Los Angeles Angels in 2017, Mizuhara came along as his personal interpreter.

Their relationship moved beyond professional boundaries. Wherever Ohtani went, Mizuhara was by his side—at the ballpark, at restaurants, even during high-profile events. Mizuhara wasn’t just Ohtani’s voice in interviews, he was his closest confidant, personal assistant, and in many ways, his best friend in America.

This extraordinary access created the perfect conditions for fraud. During Ohtani’s rookie season, Mizuhara helped him open a Bank of America account, acting as the interpreter during the setup process. By 2021, Mizuhara had consolidated control by intentionally excluding Ohtani’s agent, accountant, and financial planner from accessing the account—claiming it was due to “Ohtani’s desire for privacy.”

With exclusive access established, Mizuhara replaced Ohtani’s contact information with his own anonymous email and phone number in the banking system. When banks flagged suspicious transfers, Mizuhara took an even bolder step—he impersonated Ohtani himself on calls with bank representatives.

The Addiction that Consumed Everything

Behind Mizuhara’s elaborate fraud stood a gambling addiction that had spiraled out of control. What began as modest $50 wagers evolved into bets worth hundreds of thousands of dollars at a time.

Between September 2021 and January 2024, Mizuhara placed a staggering 19,000 bets. That’s an average of 21 bets per day. Every day. That’s one bet per hour for 882 days…betting all day, every day.

During his 29-month betting spree, Mizuhara won approximately $142 million—an enormous sum that might seem like success. But those winnings were overwhelmed by losses totaling $182 million, leaving him with a catastrophic $40 million hole he had no legitimate way to fill.

His bookie was Matthew Bowyer, an illegal bookmaker with his own troubled past. Bowyer had filed for bankruptcy in 2011, claiming he had lost $425,000 gambling in Las Vegas over the previous two years. His extermination business had collapsed, leaving him with over $2 million in liabilities. But Bowyer transformed himself from a bankrupt bettor into a gambling kingpin, running his operation through offshore websites and call centers in Costa Rica.

As Mizuhara sank deeper into addiction, his communications with Bowyer revealed classic desperation. “Can I get one last bump? This one is for real, last one for real,” he texted Bowyer in June 2023, only to ask again the next day. He assured the bookmaker, “You don’t have to worry about me not paying,” even swearing on his mother that his next request for credit would be his last. Of course, it wasn’t.

By late 2023, Bowyer was demanding a $2 million payment, but Mizuhara was in too deep: “I’m trying my best, but I just don’t have it right now,” he admitted.

The Betrayal Uncovered

The scheme began unraveling in March 2024, just as the Dodgers were preparing to open their season in South Korea. The Los Angeles Times reported that Ohtani’s name had surfaced in a federal investigation into an illegal gambling ring, sending shockwaves through the sports world.

Before the full story was known, Mizuhara gave an interview to ESPN, trying to control the narrative. He claimed Ohtani had willingly paid off his gambling debts: “Obviously, he wasn’t happy about it and said he would help me out to make sure I never do this again,” Mizuhara claimed. “He decided to pay it off for me.”

The statement raised more questions than answers. Soon after, Ohtani’s camp denied the claim, and the truth emerged—Mizuhara had been lying. The money transfers weren’t a favor from Ohtani. They were theft.

The theft wasn’t limited to direct payments to bookmakers. In a secondary scheme, Mizuhara used Ohtani’s account to purchase approximately 1,000 baseball cards worth $325,000 through eBay and Whatnot (a live shopping marketplace). He had these cards shipped to the Dodgers clubhouse under the alias “Jay Min”—possibly to monetize some of the stolen funds or create deniability for missing money.

Baseball’s Gambling Demons Return

For baseball, the scandal reopened old wounds concerning the sport’s complicated relationship with gambling. When the Ohtani-Mizuhara story broke, it echoed baseball’s darkest chapters.

In 1919, eight Chicago White Sox players conspired with gamblers to throw the World Series. The “Black Sox” scandal nearly destroyed America’s pastime. Baseball’s first commissioner, Kenesaw Mountain Landis, banned all eight players for life. The message was carved into baseball’s bedrock: gambling meant permanent exile.

Then came Pete Rose, baseball’s all-time hits leader. In 1989, an investigation revealed Rose had bet on baseball games, including ones he managed. Despite his legendary status, the punishment was absolute: permanent banishment from baseball. To this day, even after his death, the game’s hits king remains ineligible for the Hall of Fame.

When news broke that millions had moved from Ohtani’s account to a bookmaker, baseball held its collective breath. As the podcast explains: “The sport could handle murder scandals, doping scandals, even cheating scandals. But gambling—that was different, that was existential.”

There was a collective sigh of relief when Ohtani was cleared—he hadn’t bet on anything. He was a victim, not a perpetrator.

The Consequences and Lessons

In June 2024, Mizuhara pleaded guilty to bank and tax fraud. By February 2025, he received a 57-month prison sentence. The court ordered him to pay $16.7 million in restitution to Ohtani and $1.1 million to the IRS for unpaid taxes on the stolen funds.

Matthew Bowyer also pleaded guilty to operating an unlawful gambling business, money laundering, and subscribing to a false tax return. As of the podcast’s recording, he was still awaiting sentencing.

At its heart, this story isn’t just about gambling—it’s about the failure of financial controls at every level. The banking systems that should have detected suspicious transfers, the oversight that should have spotted irregular patterns, and the basic protections that should have prevented unauthorized access all failed.

The podcast distills the central lesson into four simple words: “Trust is not a control.” No matter how close the relationship, proper financial controls must always be maintained. As the host suggests, perhaps high-profile individuals like Ohtani need to consider an unusual role: “If you’re making that kind of money, shouldn’t the best paid person in your entourage be the person who keeps an eye on everyone else in the entourage?” While that might sound cynical, it could have saved Ohtani $17 million.

The Ippei Mizuhara saga joins a long list of gambling-driven frauds. Jonathan Schwartz stole millions from his clients. Amit Patel embezzled funds from the Jacksonville Jaguars. All three perpetrators convinced themselves that redemption lay just one lucky wager away—a delusion that drives the vicious cycle of addiction, loss, and escalating fraud.

The patterns are always the same: what starts as casual betting transforms into an obsession so powerful it destroys careers, relationships, and lives.

Listen to the full Oh My Fraud episode to learn more about this remarkable case, which blends America’s pastime with a powerful cautionary tale about addiction, trust, and financial controls.

QuickBooks Online Tags Retiring May 15: How to Migrate Your Data Now

Earmark Team · April 24, 2025 ·

QuickBooks Online users who rely on the Tags feature are facing a critical deadline. After May 15th, 2025, you’ll no longer be able to add new tags to transactions. This underused but flexible feature is being replaced by a modified Custom Fields alternative that comes with both benefits and limitations.

In a recent episode of The Unofficial QuickBooks Accountants Podcast, hosts Alicia Katz Pollock and Dan DeLong discussed this major transition and explained what you need to know and do before the deadline.

Why Tags Are Going Away (And Why Some Users Will Miss Them)

According to Alicia and Dan, about three-quarters of QuickBooks users never used Tags at all. As Dan explains, “When they roll out a new feature, if it doesn’t get used, it could stand to be discontinued. When I worked there, typically we wouldn’t find out who used it until we stopped it… and then people would call in droves, like, ‘What are you doing? I was using that!’

But for those who discovered Tags’ flexibility, this retirement is a significant loss. Alicia shares several creative ways professionals used Tags:

Marking transactions that needed review: “I would use a tag that said ‘for review.’ And then I could pull up all the transactions that needed review, and boom, they were all right there.”
Weather tracking at a gas station: “They used tags to say what the weather was… Is it sunny? Is it raining? Because their business is lower on rainy days, and that helped them filter out weather anomalies.”
Animal categorization at a veterinary practice: “They would tag transactions with cats, dogs, birds, rodents and reptiles and then they could see who they were providing their services for.”

Tags were particularly valuable for users on lower-tier QuickBooks plans who didn’t have access to Classes or Locations features. “If you didn’t need any of the other features in Plus,” Alicia explains, “Tags allowed you to get flexible about it.”

The Migration Timeline: Act Now

The retirement process follows this timeline:

March 17, 2025: Custom Fields was expanded across all QuickBooks Online subscription levels
May 15, 2025: CRITICAL DEADLINE – After this date, Tags become read-only
May 16, 2025 – May 14, 2028: During this period, you can view historical Tags and run reports but can’t add new tags
May 15, 2028: Complete removal of Tags functionality and all historical data

How to Migrate Your Tags to Custom Fields

If you’re using Tags, here’s what you need to do before May 15th:

Step 1: Make sure all your transactions are properly tagged. Go to the gear icon, select Tags, and click “see all untagged transactions” to catch any missed items.

Step 2: Click the “migrate tags to custom fields” button in the Tags section.

Step 3: During migration, you’ll need to:

Choose which tags to include (uncheck any you don’t want to migrate)
Name your new Custom Field (it defaults to “Tags”)
Specify that the field applies to transactions (recommended)
Select which transaction types should display the field
Decide whether the field should print on customer-facing forms

Step 4: Complete the migration. Your Tags will convert to a dropdown Custom Field with up to 100 options. If you have grouped tags, they’ll appear as “Group Name: Tag Name” in the dropdown list.

Dan notes an important distinction: “The historical transactions still have the tags on them. The new transactions won’t have the tag field – they will have the custom field available to choose.”

Critical Step: Preserve Your Historical Data

This migration doesn’t transfer your historical tag data to the new Custom Field – it only creates the structure for future transactions. Your 2025 reports will be split between the two systems.

“Run your reports on all of your tags so that you have that history permanently,” Alicia emphasizes. “When you’re looking at the Tags list, every single tag group or ungroup tag has a ‘run report’ link to the right of it.”

Save these reports as PDFs with multiple date ranges. “This is the very last time you are ever going to see a P&L related to this data,” Alicia warns.

What’s Better and What’s Worse in the New System

Improvements:

Universal Availability: Custom Fields are now available across all subscription tiers.
Increased Fields: Simple Start and Essentials now have one custom field, Plus gets four, and Advanced continues with twelve.
Dropdown Functionality: The new custom field is a dropdown, which “helps eliminate data entry errors,” as Dan points out.
Form Flexibility: Unlike standard custom fields, this new one works on both sales forms AND expense forms.
Printing Options: You can choose whether to display the field on customer-facing documents.

Limitations:

No P&L Reporting: “The big heartache is that you cannot do a profit and loss report by custom field,” Alicia explains. This is a major functional loss for many users.
Banking Feed Limitations: “You cannot apply this new custom field from the banking feed,” notes Alicia. You’ll need to edit transactions after they’re created.
No Multiple Values: Unlike Tags, you can only select one value per Custom Field on a transaction.
No Bulk Assignment: Currently, there’s no way to apply Custom Fields to multiple transactions at once, though Intuit has said this feature is coming.

Recommendations for Moving Forward

If the Custom Fields approach doesn’t meet your needs, consider these options:

Consider Upgrading: “If you’re angry because your tags are gone, you probably need to be using the right tool for the job anyway,” suggests Alicia. “Classes are way more reportable… It might be worth upgrading to Plus.”

Use Multiple Custom Fields: If you’re on Plus or Advanced, you have access to more custom fields and can create separate fields for different tracking needs.

Spreadsheet Sync: Advanced users can leverage Spreadsheet Sync to manage custom field data, including retroactively applying values to past transactions.

Stay Alert for Improvements: Intuit has already announced that bulk assignment and adding Custom Fields to deposits are on their roadmap.

The Reality Check

As Dan puts it, “If you don’t use something, it is in jeopardy of going away,” bringing new meaning to “use it or lose it” in the software world.

For many users, Tags weren’t even on their radar. But for those who built creative workflows around them, this transition requires immediate action to preserve historical data and adapt to the new system.

If you need help with the migration process or want to discuss this change, you can reach out to Alicia and Dan at unofficialquickbookspodcast@gmail.com.

Listen to the full episode for more details and insights about this important transition in QuickBooks Online.

Alicia Katz Pollock’s Royalwise OWLS (On-Demand Web-based Learning Solutions) is the industry’s premier portal for top-notch QuickBooks Online training with CPE for accounting firms, bookkeepers, and small business owners. Visit Royalwise OWLS, where learning QBO is a HOOT!

QuickBooks Updates: Tap to Pay, Third-Party Integrations, and Training Opportunities for Accounting Pros

Earmark Team · April 23, 2025 ·

In the latest episode of The Unofficial QuickBooks Accountants Podcast, hosts Alicia Katz Pollock and Matthew “Spot” Fulton break down the most important QuickBooks announcements from Intuit’s March “In the Know” webinar.

Here’s what’s new, from streamlined payment processing to expanded integrations and professional development opportunities.

Upcoming Training Opportunities for ProAdvisors

Here are several important training opportunities that ProAdvisors should mark on their calendars:

Level Two Certification Virtual Conference (March 25-27) – This training offers 9.5 CPE credits and prepares you for the advanced certification that many firms now require. Alicia emphasized, “Level one is like what buttons do you push… Level two is really leveraging the resources, some of the more advanced features, being able to think creatively about how to use the features to solve problems.”

MailChimp Training – Two new trainings are available in the ProAdvisor certification portal: “Getting Started with MailChimp” and a “MailChimp Product Guide” for client conversations. These trainings help ProAdvisors understand how MailChimp (now owned by Intuit) can be used for targeted client communications.

Recertification Window (April 28 – June 30) – The hosts emphasized the importance of recertifying early. “If you certify much earlier, your chances are probably better than later to get that prize,” mentioned Matthew, referring to the weekly $250 gift card drawings for those who pass the test. Remember that ProAdvisor certification tests are open-book!

Construction Industry Training (May 8) – For those interested in the construction niche, Intuit is offering specialized training covering “the modern construction landscape, mapping the construction workflow, connecting field and office, and key technology solutions.”

Tap to Pay on iPhone Eliminates Hardware Requirements

One of the most exciting announcements is the new Tap to Pay feature for iPhone, available in both the QuickBooks Mobile and Go Payment apps. This eliminates the need for the $50-100 Bluetooth card readers that many users didn’t even know existed.

“This is huge,” Alicia explained. “Now all you have to do is pull up the GoPayment, pull up the sale, and all the person has to do is either tap their phone to your iPhone or tap their credit card to your iPhone, and it automatically pays.”

The financial benefits extend beyond hardware savings. Transactions processed through Tap to Pay cost just 2.5% compared to 3.4% for manually keyed entries. ProAdvisors can secure even lower rates for their clients through preferred pricing.

However, both hosts emphasized that the real value isn’t in the processing rates but in the automated reconciliation. “If your focus is on the rates versus the efficiency, then you’re actually paying attention to the wrong thing,” Alicia noted. “QuickBooks Payments has huge ROI because when you run the payment through it, it recognizes it, it pays the invoice, it puts it in undeposited funds, it batches the payments and it matches to your bank feed.”

This feature is currently available in the US, with Canada expected to follow later.

Third-Party Payment Integrations Expand

QuickBooks Payments is significantly expanding its third-party integrations, allowing more applications to use it as a payment processor. The growing list includes PandaDoc, ChargeOver, Notify, ServiceM8, Buildertrend, Lightspeed, Salesforce, BigCommerce, and many others.

“Basically, what happens is you go into the settings on these apps for the payment processor, and it’s going to now give you a choice,” Alicia explained. “So instead of just going to Stripe, you will now actually have choices… and QuickBooks will be on the list.”

A major advantage for bookkeepers is how QuickBooks Payments handles processing fees. Unlike other processors that deduct fees from each transaction, QuickBooks extracts fees as separate transactions. “When you see the money in the bank, you’re seeing the full payment on your invoices and they’re all batched at their totals, which makes it much easier for you to batch and reconcile,” Alicia noted.

Intuit is also exploring options to allow merchants to pass processing fees to customers—a feature many professionals have requested.

ProConnect Tax Planning Tools Enhanced

For accounting professionals who handle taxes, ProConnect Tax now offers enhanced integration with QuickBooks. The system allows you to toggle different tax strategies on and off to see how they affect clients’ estimated taxes and tax projections.

“They’re trying to create an environment where it’s more intertwined and you can start to be planning for quarterly estimate payments, better projections, that type of stuff,” Matthew explained.

Users can create multiple “what if” accounts to compare different tax scenarios, view federal and state tax implications, and even print estimated tax payment vouchers. The integration also incorporates Intuit Assist’s AI-powered insights to identify opportunities you might otherwise miss.

QuickBooks Live Expert Service Evolving

QuickBooks Live, Intuit’s $50 support service that allows clients to get simple questions answered, is being refined based on customer feedback. Initially seen as potential competition, many ProAdvisors now view it as a valuable addition to their service offerings.

“I actually now see it as a huge value-added service,” Alicia shared. “I have some of my high maintenance clients calling into it instead [of me].”

The service has important limitations that protect the ProAdvisor relationship: “They’re only answering the question that’s asked. They can’t contribute more information… they can only answer what has been requested of them.”

Intuit is now testing enhancements, including priority queue access and weekend support hours, which could prove valuable during crunch times.

Making the Most of These Updates in Your Practice

These March updates reflect Intuit’s commitment to creating tools that help accounting professionals deliver more value with less effort. For those looking to leverage these innovations effectively:

Focus on efficiency over processing rates when evaluating payment solutions
Consider introducing clients to QuickBooks Live for basic support questions
Pursue Level Two certification to enhance your problem-solving capabilities
Explore specialized training in high-demand niches like construction
Complete recertification early to maximize learning and incentive opportunities

The real value accounting professionals provide goes far beyond basic bookkeeping. These QuickBooks enhancements free up time to focus on the advisory work that truly transforms client businesses.

For more detailed insights on these updates and implementation strategies for your practice, listen to the full episode of The Unofficial QuickBooks Accountants Podcast.

Selling Your Accounting Firm: Misconceptions, Valuations, and Market Realities

Earmark Team · April 15, 2025 ·

The accounting profession is experiencing a wave of mergers and acquisitions right now, which is forcing firm owners to make tough decisions about their futures.

In the latest episode of the “Who’s Really the BOSS” podcast, Doug Lewis, the Managing Director at Visionary Group, offered insider insights into accounting firm transactions, drawing from his extensive experience in the field.

Record-Breaking M&A Activity

In 2024, accounting firm transactions set new records, and it looks like 2025 might double those numbers. As Lewis explained:

“2024 was industry-wide across the accounting profession absolutely wild. The pure number volume of transactions that were happening…a lot of people don’t realize how many half-million to $5 million transactions take place almost weekly at this point.”

While big acquisitions by major firms and private equity groups grab headlines, most transactions involve smaller practices that often go unnoticed. This surge in activity is driven by two key factors:

Demographic Reality: The average baby boomer is now in their late 60s, and this generation still owns most accounting practices. Many are discovering that their internal succession plans have either failed or didn’t exist in the first place.

Growth Strategy Shift: Larger accounting firms have increasingly turned to acquisitions as their primary growth strategy. Once firms reach certain revenue levels, relying purely on organic growth simply isn’t enough.

“Once a firm reaches a certain revenue size, it’s extremely difficult to move the growth needle if you’re just focusing on organic growth,” Lewis noted. “The numbers can get staggering on how much new business you have to bring in.”

This creates what Lewis calls a “perfect storm” in the marketplace: Aging owners needing exit strategies are facing off against growth-hungry acquirers who see mergers and acquisitions as their best route to expansion.

Who’s Buying Accounting Firms?

The landscape of potential buyers for accounting firms has changed a lot in recent years. Lewis pointed out three main types of buyers:

Independent Accounting Firms: These firms continue to acquire practices, often opting for equity swaps rather than cash transactions. In many cases, these deals are structured as “mergers,” where the selling partner rolls into the compensation program of the acquiring firm.

Outside Investors: This group includes private equity firms, outsourcing companies, technology firms, and wealth managers who are increasingly getting involved in the accounting space.

Hybrid Firms: These are firms that have already taken on partial or majority private equity investment and are becoming more active in making acquisitions, typically using different transaction structures.

Despite these categories, Lewis emphasizes, “I’ve been a part of hundreds of these things over the years, and I have yet to see two transactions that were ever structured in the exact same format.”

How Firm Valuations Are Changing

It seems like the marketplace is really shifting from revenue-based valuations to EBITDA-based approaches, which align more closely with how other industries operate.

“The overwhelming majority of acquirers are shifting from the multiple of gross revenue down to the multiple of EBITDA, which makes sense because that’s how the majority of other businesses trade,” Lewis explained.

Even with this change, gross revenue multiples still serve as a useful reference point. Lewis noted, “Usually the multiple of gross revenue is always going to hover around that one time mark. Some are significantly higher if it’s a niche profitable practice and some are significantly lower.”

A key consideration in this process is how EBITDA is calculated—especially when it comes to owner compensation. Lewis states, “When we look at EBITDA, the true profitability on a firm, we look at it before any single owner in that company takes home a dime. That’s the starting point.”

This can often lead to tension during negotiations since sellers typically view their compensation as separate from the firm’s profitability, whereas buyers see owner compensation as a cost that needs to be factored in.

Another concept that Lewis brings up is what he calls the “scrape”—essentially the return on investment that buyers require. As Marcus puts it: “If the scrape on a transaction’s 10%, 20%, you have to evaluate this business purchase up against anything else in the market, including just going and sitting that cash in an interest-bearing account.”

Building Value in Your Accounting Firm

If you’re looking to sell your firm or transition ownership, there are some proven strategies that can really boost its value. Lewis identified four key areas to focus on:

1. Develop Your Talent

One of the biggest draws for potential buyers is the talent within your firm. While having younger partners can be a real advantage, Lewis stressed that having strong management at all levels is crucial:

“Young partnership talent is phenomenal to have. But if you have strong managers, that next level director manager level people inside your firm, that’s going to significantly help valuation.”

2. Optimize Your Client Portfolio

Many accounting firms struggle with revenue concentration that goes beyond the classic 80/20 rule:

“It’s not uncommon for us to see more of like a 90/10, 95/5 rule inside accounting firms,” Lewis pointed out.

This means that only a handful of client relationships are driving most of the firm’s value. Lewis shared an eye-opening example: when he asked a seller about their top ten clients, they could only name about five or six and realized they didn’t really know what those clients were trying to accomplish.

Rachel highlighted her own experience: “We were spending a lot of time with very low revenue clients, like multiple touch points on these that spent the least amount with our firm. And it didn’t make any sense.”

3. Review Fee Structures

One of the most effective strategies for increasing your firm’s value is to conduct thorough pricing reviews:

“I’ve yet to really see a firm that has priced themselves out of any market, which is shocking,” Lewis noted.

Despite this insight, many firms hold on to outdated pricing structures that undervalue their services. Lewis recommends that firms “aggressively review your fee structures” and set minimum fee thresholds to get rid of unprofitable client relationships.

4. Highlight Advisory Opportunities

While it may not be realistic for everyone to build strong advisory practices—especially those nearing a transition—Lewis suggests a different route:

“If a firm is a little late in the game to really jump start an advisory department, what they should do is be able to clearly state and identify the advisory revenue opportunities that exist inside their base to a potential buyer.”

Clearly communicating these untapped potential opportunities to potential buyers can significantly boost your firm’s perceived value.

Common Misconceptions When Selling

For firms working on a sale or merger, Lewis says there are two big misconceptions that tend to derail transitions:

Unrealistic valuation expectations often stem from anecdotal information about what other firms received. “When you hear, ‘oh, this firm got a multiple of this’ or ‘private equity wants this in a firm’—yeah, they do, but they want one in a firm that’s 20 times your size,” Lewis explained.

Underestimating transition timelines is another common pitfall. “There are a lot of aging owners out there right now who think that when I’m ready to hang it up, I can just list the thing, sell it, and walk away,” Lewis noted. “Those types of transactions where there is not a relatively extended transition period post-deal—those are becoming less and less commonplace in the market.”

Every Firm Will Face Transition

Lewis’s view is simple: transition is inevitable for every accounting practice.

“Every single firm transacts now. There’s really only three transactions out there. Number one is you’re going to either sell or merge the thing. Number two is you’re going to pull off the internal succession. And number three is you’re going to close your doors.”

This reality completely changes how we should think about firm value. Building value isn’t just something you do when you’re getting ready to sell – these core business principles improve outcomes no matter which path you take.

As Rachel put it: “We need to be doing these things as well if we’re hoping one day that one of our current team members or a future team member is going to want to buy or continue the legacy of our current firms. We need to make them attractive to the people who are working in them as well.”

In today’s red-hot market for accounting firm deals, the winners will be those firms that consistently build value through disciplined business practices instead of waiting until they’re about to transition.

Want to hear more from Doug Lewis? Listen to the episode, and don’t forget to subscribe to “Who’s Really the BOSS” for more insights on building a valuable accounting firm.

Rachel and Marcus Dillon, CPA, own a Texas-based, remote client accounting and advisory services firm, Dillon Business Advisors, with a team of 15 professionals. Their latest organization, Collective by DBA, supports and guides accounting firm owners and leaders with firm resources, education, and operational strategy through community, groups, and one-on-one advisory.