“I think it’s obviously obvious.”
~ Forensic accountant Mark Berenblut, responding in the affirmative that R. Allen Stanford knew he was “misrepresent[ing] the liquidity and soundness of the CDs.”
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Quote of the Day: No Ponzi Scheme Bailouts | 03.11.10
“[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.
Utah Accountant Who Filed $393 Million in Fake Tax Refunds Can Never Ever Ever Do Taxes Again
Dick Jenkins is a bad, bad tax accountant; the Justice Department says so.
“Given the sheer brazenness of Jenkins’s conduct, he is essentially stealing … from the U.S. Treasury,” said U.S. District Judge Dale A. Kimball, who entered the civil injuction against him last week. Jenkins was accused of filing $393 million in fraudulent tax refunds, including a single $210 million dollar refund for one customer and $402,920 for himself that he didn’t have coming (I don’t care how good you think you are at deductions, that’s BS).
Jenkins was not barred by the court from doing taxes forever because he screwed his clients (they received $294,292 in fake refunds) but because “Jenkins’s conduct results in irreparable harm to the United States.” You heard right, the Salt Lake Federal Court is pissed because he tried to remove $393 million from the Treasury through tax fraud, who cares about the clients?
Maybe this is what the PCAOB was talking about when they mentioned unusual transactions without giving specifics. I’d say it qualifies.
Salt Lake Federal Court Bars CPA from Preparing Tax Returns for Others [Media Newswire]
Report: Accountants Responsible for Two-thirds of Embezzlements
Okay auditors. No more excuses. You should already be giving everyone the stink-eye the second you walk in the door but now we’ve got a REPORT about embezzlement in the US of A that gives you all kinds of hints on who you should suspect — provable or not — of being the next Sue Sachdeva.
The Marquet Report on Embezzlement is an annual report put out by Marquet International, Ltd., a “an independent investigative, litigation support and security consulting firm” according to the company’s website.
Here are some of the key findings in the report:
• Women are more likely to embezzle than men.
• Men embezzle significantly more than women.
• Perpetrators typically begin their embezzlement schemes in their early 40s.
• By a significant margin, embezzlers are most likely to be individuals who hold
financial positions within organizations.
• The two broad industry categories that have the highest risk for a major
embezzlement are Financial Services and Government Agencies/Municipalities.
• The Financial Services industry suffers the greatest losses from major
embezzlements.
• On average, major embezzlement schemes last about 4½ years.
• California and Florida are consistently the states that experience the greatest
losses from major embezzlements.
• The vast majority of major embezzlements are caused by sole perpetrators
• Gambling is a clear motivating factor in driving some major embezzlements.
• Fewer than 10 percent of embezzlers have a criminal record – less than expected, but enough to suggest that pre-employment screening has merit.
Some takeaways: 1) Immediately suspect anyone that gambles. Even if it’s bingo games in the church basement; 2) If you’re in California or Florida you’ve got your work cut out for you; 3) By “a significant margin” they mean accounting/finance personnel were responsible in 67% of the cases. Executives were second, in 13% of the cases.
Annnnd since we know you’re wondering: the largest embezzlement case in 2009 was none other than our Suz. Based on the criteria above, it appears that she should have been under suspicion from day one but you can’t fault Grant Thornton too much. This is only the second report that Marquet has issued so chances are she still would have made off with $20 million. Oh well, you’ll get ’em next time!
The top ten from 2009:
Report On Major Embezzlements 2009.pdf