Don’t Worry, There’s Still Plenty of Accounting Fraud Out There

Posted on by Caleb Newquist

In what might be a lagging indicator of recession-spawned misdeeds, the percentage of reported corporate frauds compared with all other reported incidents increased to 20.3% in the first quarter of 2011, a rise of more than 60 basis points from the previous quarter, according to data from 1,000 organizations worldwide. Of the 30,000 ethics- and compliance-related reports from people at those organizations in the first quarter, more than 6,100 concerned accounting or auditing irregularities, embezzlement, kickbacks, and other forms of fraud. [CFO]

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Tony Little, Gazelle™ and Ponytail Enthusiast, Duped by Former Accountant (Allegedly!)

Mark Schreiber, a former controller of fitness guru Tony Little’s business empire, has been accused of embezzling nearly $600k by forging Little’s signature. Apparently Schreiber was involved in some “online horse wagering” which must not have gone too well since he ended up…stealing money (allegedly).

According to T. Little’s lawyer, Latour “L.T.” Lafferty, the $600k is pocket change to his client but he’ll be damned if they aren’t going to pursue every means necessary to get every cent back:

“We’re certainly going to pursue any legal avenues to recover every cent that was taken from Mr. Little,” said his attorney, Latour “L.T.” Lafferty. “It doesn’t impact the financial well-being of Mr. Little. But certainly it’s a significant blow and a serious breach of Mr. Schreiber’s place as controller of his business operations.”

Since TL is a man of health and fitness and not of numbers, it’s not surprising that he’s found himself in this conundrum but he did have his suspicions:

Little realized something was amiss last year, according to court records, when he moved to fire Schreiber as a controller overseeing his Pinellas Park companies’ finances. He was dissatisfied with Schreiber, records show. He set up a July 27, 2010, meeting.

But before they could meet, Schreiber sent an e-mail: “I quit.”

After Little’s new accountant had been poking around for awhile, it was pretty obvious things weren’t kosher. They called in a forensic expert who discovered that 152 checks were drawn over 11 months to the sum of $583,379.

Right now the “degenerate gambler” motive seems to be the most plausible scenario, although it’s entirely possible that Mr Schreiber was sick with jealousy over the sexual tension between Little and his infomercial leading lady, Darla Haun. We’ve presented some footage that will likely be introduced into evidence during Schreiber’s trial: