He Faked $1M in EBITDA, Here's How I Caught It
▶️ Guardian Due Diligence: https://resources.guardianduediligenc... ►EXECUTIVE SUMMARY 1) A SELLER DEPOSITED $1M IN CASH TO FAKE THE EBITDA — AND ALMOST GOT AWAY WITH IT: Physical security business, West Coast, $3M revenue, $1M EBITDA on paper. The reality: Break-even. The seller literally deposited a million in cash into the bank, ran it through QuickBooks, reported some on taxes, and called it revenue. Without invoice-level diligence, you'd never know. 2) THE BROKER WAS THE ARCHITECT OF THE SCAM: This wasn't a solo act. The broker — who masquerades as a finance and Harvard expert — coached the seller on how to stage the books so that bank statements, QuickBooks, and tax returns all checked out. Cheap due diligence would've passed this deal. That's the whole point. 3) "JUST SEND ME 10 PHOTOS OF INVOICES" — HE COULDN'T DO IT: Three calls. First they tried to get Elliott to fly to LA to dig through 200 boxes. Then a useless call with the office manager. Finally: just snap 10 random invoices on your phone. When the seller couldn't produce that, the deal was dead. The simplest request exposed the entire fraud. 4) MOST QoE PROVIDERS WOULD'VE MISSED THIS COMPLETELY: Not every Quality of Earnings engagement tests invoices against reported revenue. Most trust what's in QuickBooks. Elliott's team goes deeper because they've seen how creative sellers get. That gap between standard and thorough is where $4M mistakes live. 5) HAD HE CLOSED, IT WOULD'VE BEEN A $4M GUARANTEED LOSS — AND EVERYONE ELSE WALKS AWAY PAID: Seller gets his payday, broker collects his fee, lender moves paper — and the buyer holds a worthless asset built on fabricated earnings. This is the irreversible kind of deal damage that no amount of post-close negotiation can fix. ► ABOUT ME Elliott Holland is your secret weapon for mastering deal-making. With 15+ years in small business acquisitions and an Ivy League background from Harvard Business School, he combines deep expertise with hands-on guidance. From crafting offers to closing deals, Elliott is there every step, offering tailored support to help you succeed. ► STAY UP TO DATE 🔹 LinkedIn: www.linkedin.com/in/elliottholland 🔹 X (Twitter): www.x.com/elliotteholland ► CHAPTERS 0:00 — The Setup: How to Manufacture a Million in Fake EBITDA 0:30 — The Deal: $3M Security Business, West Coast 0:50 — The Broker Was In On It 1:15 — Why Cheap Due Diligence Would've Missed Everything 1:40 — "Fly Out and Look at 200 Boxes" — The First Red Flag 2:15 — "Just Send Me 10 Invoices" — The Kill Shot 2:50 — Breaking the News to the Buyer 3:20 — How the Scam Actually Worked 3:55 — Why Most QoE Providers Would've Missed This 4:20 — The $4M Lesson: What's at Stake Without Real Diligence
