• Accounting News Roundup: Martin Shkreli’s Fraud Conviction and ‘Botched’ Tax Reform | 08.07.17

    By | August 7, 2017

    Comeuppance

    A jury found the insufferable client, boss, and person Martin Shkreli guilty on three of eight counts of securities fraud on Friday. And if you’re feeling schadenfreude, you might be disappointed to learn that he’s mostly fine:

    During his postverdict live-stream, Mr. Shkreli, sipping from a bottle of India pale ale, speculated that his sentence would be “close to nil” and said that he was not anticipating spending time in a maximum security facility, adding “this is not ‘Oz’ or ‘The Wire.’”

    Rather, he said, he imagined serving in what he termed “Club Fed,” playing basketball, tennis and Xbox, and resurfacing “back out on these streets very quickly.”

    I think we all love to hate a cartoonish villain like Martin Shkreli because even when he loses, he claims to win. “Sure, I might go to prison, but it’ll be the type of prison that you wish you could go to.” That kind of absurd phony confidence is equally loved and loathed. With these kinds of communication skills, maybe he should run for president?

    How’s tax reform coming along?

    Well, if you believe anything Steve Forbes has to say: Not good!

    Forbes said Americans will get tax cuts soon but it’s too late for a tax overhaul. “They botched that,” he said. “Save the heavy lifting updating the code after next year’s election.”

    Almost none of us can afford to put off important work for 15 months. But also, what do spend your time doing for 15 months when you’re not doing the work you’re supposed to be doing? Politics is strange.

    Accountants behaving badly

    Going Concern history buffs will fondly remember this headline from January 2015: “Let’s Not Rush to Judgment Just Because a Guy Blew Off a Meeting About Accounting Discrepancies 5 Minutes Before It Started.”

    That guy was Michael L. Hudson, a former treasurer at Frisch’s Restaurants, and he pleaded guilty to criminal charges last year, but the SEC only filed its civil fraud charges on Friday. Still, it warrants a refresher:

    The SEC’s complaint, filed the U.S. District Court for the Southern District of Ohio, alleges that from 2008 to 2014, while employed as the assistant treasurer of Frisch’s Restaurants, Inc., Michael L. Hudson diverted payroll funds to accounts he controlled and falsified Frisch’s accounting records to conceal his defalcation. Hudson then submitted the falsified records to Frisch’s internal accounting personnel and its auditors in connection with the preparation and filing of the company’s financial statements. Hudson also falsely certified to Frisch’s chief financial officer that the company’s internal control over financial reporting for which he was responsible was effective. In total, Hudson allegedly misappropriated over $3.9 million from Frisch’s.

    Previously, on Going Concern…

    Over the weekend, someone in Open Items asked if anyone “can shed some light on Federal audit work in the US?”

    In other news:

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    • Build_tha_wall

      Every Pharma Bro has its day.