• Accounting News Roundup: Embezzling and Impersonating; Tax Reform; Phony Revenue | 10.20.17

    By | October 20, 2017

    Accountants behaving badly

    A reader pointed us to this seemingly common ABB story featuring Krystle Sheals of Marion, Ark.:

    Sheals, a former bookkeeper with Nichols Fire and Security (NFS) in Memphis, Tennessee, is charged with using her access to her employer’s bank accounts to pay personal bills and expenses, including personal credit card payments, personal utility payments, car payments, school loan payments, and mortgage payments. While using NFS funds, Sheals is also charged with the purchase of an automobile, which she then gave to an individual in Henry County, Tennessee, and opening a retirement 401K account. The funds stolen amount to approximately $327,000.

    This banal embezzlement takes a bizarre turn when we learn that Ms. Sheals also faces charges of impersonating a federal officer:

    Sheals is additionally charged with falsely assuming and pretending to be an officer and employee of the United States, namely a Special Agent of the Federal Bureau of Investigation (FBI). Sheals falsely stated to others that she was a federal agent; wore and possessed clothing, articles and insignia of the FBI; possessed and presented documents, business cards and identification purporting to be an FBI agent; and conducted interviews while falsely purporting to be an FBI employee.

    The Commercial Appeal of Memphis reports that the impersonation took place from June 2016 to August 2017 which only makes this more confusing. Why is a bookkeeper stealing from a fire and security company and impersonating an FBI agent? Being a fake FBI agent doesn’t get you out of trouble if you’re stealing from your employer. Likewise, why go to all this trouble to be a fake FBI agent? She had and wore the clothes, made up documents, business cards, an ID, and conducted interviews…for what? Who was she interviewing and under what pretense? It sounds like she had a really involved second job, except it was a fake job. Why go to all that trouble to play dress-up when that particular brand of dress-up is against the law? I’m stumped.

    How’s tax reform coming along?

    J. Mark Iwry, a former Treasury official in the Obama administration, is not optimistic, saying, “The odds of tax reform coming out of this Congress are zero percent,” adding, “The odds of tax cuts are considerably higher.” That’s true especially now that the Senate and House have both passed budgets. Richard Rubin reports in The Wall Street Journal that reconciling the differences “would take a week or two,” and at that point, the stage is set for any tax bill to be passed by the Senate with a simple majority.

    SEC enforcement

    Meanwhile, in the land of microcaps:

    The Securities and Exchange Commission has charged a microcap company and its founder with fraud for painting a misleading picture of the company’s finances that deceived the investing public about its true financial condition as well as its technology.

    The SEC’s complaint, filed on September 29, 2016, alleges that Accelera Innovations Inc.’s public filings included the revenues of a separate company that it did not own or control and, as a result, Accelera improperly inflated its annual revenue by up to 90 percent. In addition, the complaint alleges that Accelera portrayed itself as a provider of software when, in reality, it was not providing software to anyone.

    Inventing 90% of your revenue out of thin air is impressive, but fraudsters who purport to provide a product and then explicitly do not provide the product are really something special.

    Brought to you by Accountingfly

    The featured job of the week is an Accounting Manager with DePretis CPAs in Pleasanton, Calif.

    Previously, on Going Concern…

    Megan Lewczyk wrote about accountants’ paradox of choice. In Open Items, crappy interview stories.

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