If you’ve been trying to pass BEC since the CPA exam went computerized in 2004 (you can laugh all you want, I know a few people…), rejoice! The AICPA, NASBA, and Prometric have committed to another 10 year contract to administer and oversee the computerized CPA exam in 55 US jurisdictions.
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Posted in:
Fraud, Taxes, Taxes: Because We're The Little People - /
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The Latest Homebuyer Tax Credit Scam: Now with HUD!
By Joe Kristan
That the First-time Homebuyers Credit is riddled with fraud is old news. Like all refundable credits, where the government writes you a check if the credit exceeds the tax shown on your return, it’s a magnet for grifters. What’s new is cross-agency efforts enable First-Time Homebuyer Credit fraud, with video.
James O’Keefe, notorious for donning pimpwear and taping ACORN officials happily facilitating tax fraud and child prostitution, and then for getting arrested in Louisiana, took his act to Detroit and Chicago offices of the U.S. Department of Housing and Urban Development posing as a tax credit scammer. One conversation went like this:
The law says that the tax credit maxes out at $8,000 for an $80,000 home. On the tape, O’Keefe asked a staffer, “What if I bought a place for $50,000, but the seller and I agreed to write down $80,000 as the purchase price?”
“Flip it any way you want,” the staffer replied.
What if the place is worth much less — like only $6,000?
“Yup, you can do that.”
This version of the Homebuyer Credit scam can get around the checks the IRS has in place to prevent fraud. The primary IRS anti-fraud check for the homebuyer credit is a requirement that a copy of an HUD-1 form or settlement statement be attached to the 1040 claiming the credit. If the buyer and seller collude to dummy up a HUD-1 form, the “buyer” is reasonably likely to get the credit as long as there isn’t some other item on the return that flags it – such as an address that’s different from the one for the “home” on the settlement statement.
The scammers wouldn’t be out of the woods by any means. The IRS might well catch up with the scammers. But then again, they might not, or if they did, the money could be long gone. For someone living in in a Detroit neighborhood where houses sell for as little as $1,000, splitting $8,000 with a scammer might be one of the less-risky opportunities at hand.
Late yesterday, U.S. Bankruptcy Examiner Anton Valukus released a 2,200 page report that details the collapse of Lehman Brothers. It points the finger at Lehman execs for engaging in shady accounting that Ernst & Young knew about and was comfortable with. Lehman’s Board of Directors were not informed of the questionable accounting treatment.
To put it in more technical terms: Ernst & Young is in deep shit. The lead partner was interview more times than Dick Fuld for crissakes.
The accounting in question was known inside Lehman as “Repo 105.” These transactions moved billions of dollars off of Lehman’s balance sheet that were described by emails in the report as “basically window dressing” and their global financial describing them as having “no substance.” The Times reports that the treatment was so crucial to LEH that one executive, Herbert McCade, was known internally as the “balance sheet czar” and that he described in an email that the treatment was “another drug we r on.”
Accounting News Roundup: Lehman Failure Was a Team Effort; Boston Provident Ex-CFO Faces Prison After Guilty Plea; Who Wants to Watch a Toxic Asset Die? | 03.12.10
By Caleb Newquist• JPMorgan, Citigroup Helped Cause Lehman Collapse, Report Says [Bloomberg]
There’s so much blame to go around: Dick Fuld! Every Lehman CFO that ever worked there! JP Morgan, Citi, Ernst & Young (who we’ll get to shortly), you’re all at fault too! But mostly Dick Fuld. He was putting lots of pressure on Lehman’s balance sheet magicians to reduce the bank’s debt. The report states that Fuld was “at least grossly negligent” and if it gets worse than that, you’ll certainly hear about it.
According to the Bankruptcy Examiner’s report, there was plenty of parties that didn’t help matters. JP Morgan and Citi were demanding more collateral from Lehman as the firm tried to stave off death while E&Y sat back as LEH got all hocus-pocus with their accounting. So pick a company or person you don’t like and point the finger. It sounds like an argument can be made.
All this amounts to largest bankruptcy in history and boy will it sell a helluva lot of books, movie tickets, and HBO subscriptions. Silver lining!
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Fraud, Quote of the Day - /
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Quote of the Day: No Ponzi Scheme Bailouts | 03.11.10
By Caleb Newquist“[I]t is hard to justify giving special compensation to the investors of Mr. Madoff and Mr. Stanford just because they lost significant amounts of money with little prospect of any recovery.”
~ Peter J. Henning, on Madoff and Stanford victims lobbying members of Congress for a law that would compensate them for some of their losses.
The man is a forensic sleuth, no question. Is he a hero? What’s a hero? Could he train young SEC grasshoppers to be fraud detecting machines like him? Probably. David Weidner — among others — isn’t enthused, especially with Harry’s idea about who should play him in a movie (Hanks, Damon, Cage).
The Purpose of H&R Block’s Free Shred Day Is Not to Demonstrate How to Destroy Evidence
By Caleb NewquistAs you’re all aware, accountants suffer a myriad of stereotypes. The public’s notion that we shred anything and everything with pure, unadulterated joy to cover our asses is due mainly to folks like David Duncan, the Arthur Andersen partner who so famously ordered the shredding at Enron. That sort of thing inspired this spot for Heineken:
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Posted in:
Technology - /
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Brightbook Knows That Dead Heads Need Accounting Applications Too
By Caleb NewquistAs you’re acutely aware, the canvas that is your life as spreadsheet jockey is full of less-than exciting palates. Everything from the dull grey hue of your perfectly squared section on the cube farm to the taupe paint that encompasses every wall in your office.
This is not lost on the creators of Brightbook. They also realized that your lives are devoid of dinosaurs and topless cartoon girls:
BNP Paribas is looking for someone to join their North America Audit Group as a VP for Finance Activities Credit Review & Audit.
An ideal candidate will have a blend of both credit review and audit experience.
The position requires a minimum of five years experience, MBA, CPA or CFA is required and French language skills are a plus. Some travel is required to offices in San Francisco, Chicago, and Dallas/Houston.
Get more details on the position, located in New York, after the jump.

