Fraud

Olympus sued by 6 banks over accounting fraud; largest in a series of suits

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Bloomberg reports Olympus Sued for $273 Million After 13-Year Fraud.

Six banks filed suit claiming 27.9 billion yen ($273M) damages from the drop in stock price after the fraud was disclosed.

The article says Olympus was sued in November 2012 by a group of investors. That claim was for 19.1B Yen ($186M). That one had been preceded by 14 other suits.

Olympus sued by 6 banks over accounting fraud; largest in a series of suits Read More »

Irony: Charity’s anti-fraud manager pleads guilty to fraud

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BBC reports on 3/6 that Oxfam ex-fraud chief admits defrauding charity.

Oxfam, a development charity in England, has revenue of £385.5M (~$645M) in 2012.

The charity’s head of the counter-fraud department pled guilty to embezzling about £62.6K (~US$105K) and will be sentenced May 16.

(Cross-posted from my other blog, Nonprofit Update, since this is useful info for CPAs.)

His scheme?

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Irony: Charity’s anti-fraud manager pleads guilty to fraudRead More »

Irony: Charity’s anti-fraud manager pleads guilty to fraud Read More »

2 more case studies in tragedy of fraud

Leave a Comment / Fraud /

For a couple of years I’ve been looking at a few specific fraud incidents as case studies of fraud in general. It has been fascinating to dive deep into an embezzlement at a nearby megachurch and a corruption case in a nearby city. I’ve blogged about those extensively and even turned my blog posts into an e-book, Tragedy of Fraud.

Two more case studies have surfaced — one I’ll just mention and the other I’ll see what I can find for several more posts.

(Cross-posted from my other blog, Nonprofit Update, because this is valuable for CPAs as well.)

“Googlable”

Here’s a consequence of fraud I’d not pondered before:

Explaining to your young children that mommy is a felon before they have the opportunity to start searching the internet. Better to explain your record before they read about it.

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2 more case studies in tragedy of fraudRead More »

2 more case studies in tragedy of fraud Read More »

Fraudster turned fraudbuster turned pastor turns fraudster again: Pleads guilty to stealing from his church

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Barry Minkow, pastor of San Diego Community Bible Church (SDCBC) pled guilty to embezzling $3 million from his church. The U.S. Attorney for Southern District of California announced the plea agreement on 1-22-14. You can see the press release here. (This is cross-posted from my other blog, Nonprofit Update.)

Pr. Minkow first went to prison as the mastermind of the ZZZZ Best fraud which collapsed back in 1987. He served under 8 years of a 25 year sentence.

After release he worked at a church in the LA area then became pastor at SDCBC. He started a for-profit company that researched and publicized frauds.

In 2011, he pled guilty to insider trading for reportedly shorting a stock before denouncing the company for alleged irregularities. He drew a five-year sentence for that felony.

That brings us to this week. …

Fraudster turned fraudbuster turned pastor turns fraudster again: Pleads guilty to stealing from his churchRead More »

Fraudster turned fraudbuster turned pastor turns fraudster again: Pleads guilty to stealing from his church Read More »

Upland bribery case – where are they now? Three have served their time. Ex-mayor has six months to go.

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Time for my semi-annual update on the location of defendants in the Upland bribery case.  Since my last update in July, a third schemer has been released. The former mayor still is in federal prison in Taft, California. That is a privately operated facility in Kern County.

Why am I still interested? Following the details of a specific incident helps demonstrate the tragedy of fraud. It’s also an education on the legal system.

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Upland bribery case – where are they now? Three have served their time. Ex-mayor has six months to go.Read More »

Upland bribery case – where are they now? Three have served their time. Ex-mayor has six months to go. Read More »

eBook ‘Tragedy of Fraud’ now available in multiple formats

Leave a Comment / Accounting, Books you might enjoy, Fraud /

Fraud has tragic effects on innocent people who didn’t commit the fraud. The person who did the deed will pay a severe price far beyond what the judge imposes. Just like a stone thrown into a pond causes ripples all across the water, so a fraud ripples out to cause all sorts of harm.

tragedy-cover

Only 99 cents.

Available in Epub for iPad, iBooks, Nook, and Sony Reader.

Also in mobi for Kindle, PDF for desktop reading, and 5 other formats.

Newest versions can be found here.

Has been available at Amazon since February.

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eBook ‘Tragedy of Fraud’ now available in multiple formatsRead More »

eBook ‘Tragedy of Fraud’ now available in multiple formats Read More »

Ex-KPMG partner banned from practice before the SEC; sentencing date is in December

1 Comment / Audits, Fraud /

The SEC banned KPMG’s former regional audit PIC Scott London from SEC related work. The key sentence from Bloomberg’s article SEC Bars Former KPMG Partner fo Role in Insider-Trading Scheme:

The SEC’s order prohibits Scott London from practicing as an accountant on behalf of any publicly traded company or other entity regulated by the agency, according to a statement released today.

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Ex-KPMG partner banned from practice before the SEC; sentencing date is in DecemberRead More »

Ex-KPMG partner banned from practice before the SEC; sentencing date is in December Read More »

Umm, Greg, you can’t talk about CPE fraud. I think that’s an ethics violation.

Leave a Comment / Fraud, Other stuff /

Greg Kyte expands the boundaries of things you aren’t supposed to discuss publicly in his post at Going Concern:  If You Can’t Admit You’ve Committed CPE Fraud, Then You Need to Take Another Ethics Course.

He offers as an example of CPE fraud his ability to complete a one hour ethics course in 9 minutes.

He then mentions the type of CPE cheating I’ve seen at almost every live course I’ve attended: …

Umm, Greg, you can’t talk about CPE fraud. I think that’s an ethics violation.Read More »

Umm, Greg, you can’t talk about CPE fraud. I think that’s an ethics violation. Read More »

3 bank confirmation frauds

2 Comments / Audits, Fraud /

Previously mentioned that AU-C 505.07 requires auditors to look at the address used on confirmations.

Here are three illustrations of how things can go sour when sending bank confirmations: PFGBest, Parmalat, and a small company in North Carolina:

PFGBest – Peregrin Financial Group

The organization’s CEO was sentenced to 50 years in prison and ordered to pay restitution of $215.5 million.

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3 bank confirmation fraudsRead More »

3 bank confirmation frauds Read More »

Upland bribery case – where are they now? Two in jail and two have served their time.

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Since my last update in December, one of the defendants in the Upland bribery case has reported for his confinement. Two have completed their term and been released. The former mayor is still in jail.

Why am I still interested? To me, following the details of a specific incident helps illustrate the tragedy of fraud. This also provides me an education on the legal system. That is useful since I’m a CPA.

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Upland bribery case – where are they now? Two in jail and two have served their time.Read More »

Upland bribery case – where are they now? Two in jail and two have served their time. Read More »

Fraudster tells her story

1 Comment / Fraud /

I’ve previously discussed the journey through fraud, jail, and rebuilding taken by Mrs. Amy Wilson. You can see my posts here.

She is providing speaking engagements to make money to repay her victim.  She has a new website set up at Forged Redemption, LLC.

If you are interested in studying one specific fraud incident to help yourself learn about fraud, check out her site. Likewise if you are looking for a speaker.

I like the graphic at the bottom of this page – it has three pictures of her at different points in time with a description of each stage: …

Fraudster tells her storyRead More »

Fraudster tells her story Read More »

Suspended sentences for senior Olympus officials in $1.7B fraud

1 Comment / Audits, Fraud /

Suspended sentences all around.

The Bloomberg report, Ex-Olympus Chairman Gets Suspended Sentence for Fraud, says the three senior staff charged a year ago received suspended sentences after their guilty pleas.

The individuals and their sentences: …

Suspended sentences for senior Olympus officials in $1.7B fraudRead More »

Suspended sentences for senior Olympus officials in $1.7B fraud Read More »

All the Enron accounting was approved by the attorneys and the auditors and the board. Everything was perfectly legit. Until indictments were issued.

1 Comment / Audits, Fraud /

In a speech that should give all auditors pause, Andrew Fastow, former CFO of Enron, tells us that all the off-balance sheet transactions were reviewed and approved in advance by everybody.

Enron was one of the biggest in the host of business frauds after the turn of the century.

Half of Enron’s assets were off-balance sheet. According to the article, Former Enron CFO Andrew Fastow Confronts the Fraud Examiners, Mr. Fastow says those deals were intended to deceive:

Fastow admitted that his role was engaging in structured finance transactions that intentionally created a false appearance for Enron. 

The goal was to create misleading financial statements.

Did he violate the accounting rules?

No.

Did he break specific laws?

No.

The transactions were reviewed and approved, yet still fraudulent

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All the Enron accounting was approved by the attorneys and the auditors and the board. Everything was perfectly legit. Until indictments were issued.Read More »

All the Enron accounting was approved by the attorneys and the auditors and the board. Everything was perfectly legit. Until indictments were issued. Read More »