Fall 2004 • Issue 15, page 18

Profile: Martin Goldberg

By Rense, Kirk*

(As is the case with many members of the California Receivers Forum, Martin Goldberg’s career path has zig-zagged between accounting, forensic accounting, bankruptcy and receivership practice, as you will discover in this fascinating profile, in Mr. Goldberg’s own words.)

My beginnings were humble enough; born and raised on Stratford Avenue in the Bronx, New York to European immigrants who came to the United States in the early 1900’s looking for a better life. Being of a traditional European background and values, my parents were no strangers to hard work, personal integrity and perseverance, all of which were passed down to their children, at times with a heavy hand when necessary.

My father held several jobs during his working life, all of which were physical labor-intensive, from working as a longshoremen on the docks of New York harbor to a presser in a “sweat shop” in the New York garment industry from the 1940’s through the 1960’s. As in many traditional households at the time, my mother ran the household raised the children, and cared for my father’s mother (my bubby) who came to live with us in her later years.

Though neither my father nor my mother had any formal education beyond grade school, the one thing that was repeatedly stressed in our household was that education is the key to a better life. So at 18 when I told my father that I was not going to go to college and that a life of physical labor seemed to work okay for him, I was “guided,” perhaps in a manner that these days might raise some eyebrows, to re-think my path. I was also “persuaded” to do well in school in order to honor my mother, though school was never my natural predilection. In short, I was graduated from New York University in 1959 with a Bachelor of Science degree in accounting.

Like my father, anything having to do with numbers came naturally to me (my father could multiply 4 digit numbers together in his head faster than I could on an adding machine – the calculator of the time). In 1960 I became a staff accountant with the accounting firm of Horwath & Horwath in Manhattan, which later merged and became the national firm of Laventhal, Krekstein, Horwath & Horwath, where I spent 5 years learning the basics of my profession.

Introduction To Forensic Accounting
While at Horwath, I was placed in a special mergers and acquisitions group. It was there that I “cut my teeth” in the field of forensic fraud accounting, performing numerous audits in transactions where fraud was suspected – fraud that I typically uncovered. For lack of a better term, I became a fraud audit specialist, amazed at the myriad ways in which individuals thought they could steal from their companies and partners without detection. What I learned was that such fraud could never be completely hidden as long as one knew where to look; while the numbers can lie, such lies almost always leave traces and trails. For me it became, and to this day remains, a game to detect how and how much an individual may be stealing.

Although I loved my work at Horwath, I had a wife and two young children to support. In 1965 I took a higher-paying job as controller of Atomic Sportswear, a clothing manufacturer based in New York City. While there I was responsible for all financial aspects of the company, including negotiating and securing financing, negotiating wage and benefit contracts with the International Ladies Garment Workers’ Union, negotiating government contracts with the U.S. Inspector General, and negotiating and obtaining merchandise placement with major retail stores.

My time spent at the company’s plants in Chattanooga, Tennessee was certainly a bit of a culture shock for a kid from the Bronx. After making some adjustments to account for the way business was conducted at the time in the South, within four years, my team and I had grown the company from $375,000 per year in sales to over $20 million per year, no small feat in the late sixties. I negotiated the sale of Atomic Sportswear to a large public concern after approximately six years with the company.

Welcome To San Diego
Once again it was time for a new challenge. And what a challenge it turned out to be! In 1971 I was hired as an independent consultant to assist in the turnaround of Milo Electronics, an electronics parts distributor based in New York City. At the time, Milo was in bankruptcy and had hopes of emerging as a “reorganized” entity. I was soon hired as the controller for the company and asked to move the company’s base of operations (and my family) to beautiful San Diego, California. How could I possibly say no? Unfortunately, after two years of struggle and finally turning the corner on profitability, Milo’s lender called the outstanding loans, due to financial covenant ratios. The only option at that point was to liquidate the company.

The liquidation of Milo brought new opportunities, however. After living the San Diego lifestyle for two years, it was clear to both my wife and I that whatever our options might be, we wished to stay in our adopted home town, where we have now lived in the same house for over 30 years. To accommodate this decision, I co-founded, managed and operated my own electronics parts distributor company based in San Diego, California under the name of Mock III Sales beginning in 1973. Starting with three desks, some telephones, a small rented office/warehouse space and only the hope of prospective sales, we took the company to over $2 million in annual sales in two years. I owned and managed the company, acting as both president and chairman of the board of directors, through 1989, when I sold my interest in Mock III to my one of my partners and a third-party buyer.

Goldberg Consulting Is Born
I thoroughly enjoyed operating Mock III but felt it necessary to divest myself of my interest in the company since the consulting business which I started in 1976, Goldberg Consulting, was consuming most of my time and efforts. This separate consulting business, which I continue to operate almost thirty years later, again started as an opportunity arising from the Milo dissolution. Around 1973 I was appointed by the United States Bankruptcy Court to assist in the liquidation of Milo. Through that case, my exposure to the bankruptcy practice brought some local recognition of my business management and forensic accounting skills. The rest, as they say, is history.

Over the next approximately 25 years, I was appointed and acted as receiver/trustee (depending upon whether the case was commenced under the Bankruptcy Act or Bankruptcy Code) in numerous bankruptcy cases under the auspices of the United States Bankruptcy Court, Southern District of California. It was through this work that I enhanced my skills and reputation as a forensic fraud auditor, and was specially appointed by the courts for the larger, more involved cases including the Yellow Cab bankruptcy and the J. David Securities bankruptcy (one of the now infamous Dominelli matters). It was from these experiences that Goldberg Consulting grew and flourished.

Today I direct and manage the forensic fraud accounting, receivership and bankruptcy areas of Goldberg Consulting. I have been appointed as a provisional director, as an equity receiver, as a rents and profits receiver, and as a post-judgment receiver in cases involving probate matters, divorce proceedings, and partnership and corporate disputes in both state and federal courts over the last 28 years. My receivership experience has covered a wide breadth of businesses. Perhaps this variety is what continues to drive my excitement after so many years — while there are common financial threads in all businesses, no two businesses are exactly alike.

Special Fraud Investigations
I have also served as a special fraud examiner for the Office of the United States Attorney, Southern District of California and Federal Bureau of Investigation, San Diego Office. I have testified as a forensic fraud expert in a number of legal matters. Goldberg Consulting is also engaged by law firms, financial institutions, private individuals and businesses to examine and investigate defalcations and suspected misappropriations of funds.
I am now 68 years old, and am asked every so often when I will “slow down” and retire. My answer is simple: I love what I do and so long as I continue to wake each morning excited about the business challenges of the day ahead, I will continue. With the continuing support of my wife of almost 45 years, my children, my friends and business associates, I feel that I am just hitting my stride.