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Ex-CFO of Taylor, Bean, & Whitaker Faces Up to Ten Years Without PeiWei

Posted on by Caleb Newquist

The Department of Justice trumpeted the guilty plea of Delton de Armas, the former CFO of Taylor, Bean, & Whitaker Mortgage Corp. today, marking the 8th conviction in the TBW fraud case. Assistant Attorney General Lanny Breuer seemed pleased in the DOJ press release:

“As TBW’s chief financial officer, Mr. de Armas concealed a massive $1.5 billion deficit in TBW’s funding facility and another large deficit on TBW’s books,” said Assistant Attorney General Breuer. “He tried to conceal the gaping holes by falsifying financial statements and lying to investors as well as the government. Ultimately, Mr. de Armas’ criminal conduct, along with that of his co-conspirators, contributed to the collapse of TBW and Colonial Bank. With today’s guilty plea, Mr. de Armas joins seven other defendants—including the former chairman of TBW, Lee Bentley Farkas—who have been convicted of participating in this massive fraudulent scheme.” 

De Armas' sentence will be made known on June 15th and he faces up to ten years in prison. That's quite a stretch for anyone, although checking out de Armas' LinkedIn profile, we see that he keeps a blog, so it'll give him a chance to write but unfortunately, he'll probably miss the frustration that we all occasionally experience with Asian takeout:

Despite the technological snafu, de Armas is forgiving man and he appreciates the effort on PeiWei's part to make it up to him:

[via DOJ]
Delton de Armas [LinkedIn]
@delton70 [Twitter]

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With IFRS Waiting in the Wings, Will Private Companies Get GAAP of Their Own?

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

A blue ribbon panel on private company accounting is holding its inaugural meeting Monday, to assess how financial reporting standards can best meet the needs of users of US private company financial statements, which are mostly for bankers and other types of lenders.

The panel, formed by the Financial Accounting Foundation, the American Institute of Certified Public Accountants and the National Association of State Boards of Accountancy, will meet five times throughout the year and will issue a report with recommendations on the future of standard setting for private companies by the end of the year.


The debate has resurfaced after the International Accounting Standard Board issued international standards for private companies last July (called IFRS for SMEs). Financial experts have been discussing this topic for decades. For instance, in 1996, the Financial Executive Research Foundation issued a paper titled “What do users of private company financial statements want?”

Some of the old and new questions the panel will address:

• What is the key, decision-useful information that the various users need from GAAP financial statements?

• Are current GAAP financial statements meeting those needs?

• How does standard setting for private companies in the US compare to standard setting in other countries, both those that have adopted IFRS for small and medium-size entities and those that have not?

To the extent that current GAAP is not meeting user needs in a cost-beneficial manner, what are some possible alternatives or private company standards?

Even if GAAP is found wanting, however, the panel might not be all that keen on IFRS as an alternative, given the limited experience of US companies with the international regime and rising skepticism on the part of the Securities and Exchange Commission about the independence of the body setting international standards.

Not that public or private US companies are eager to switch to IFRS, which will be costly and cumbersome. At this point, it seems as if private ones would rather have the accounting devil they know, except they no doubt wish it were a bit less hellacious on their results. And that’s been pretty much a forlorn hope for years.

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Trend of CFOs Transitioning to CEO Likely to Continue As Companies Refocus on Strategy

This story is republished from CFOZone, where you’ll find news, analysis and professional networking tools for finance executives.

The need for a chief executive to work with boards and communicate with Wall Street has never been greater, and CFOs have experience in both those areas–making them excellent candidates for the top spot in an organization.

Companies are increasingly recognizing the value of this internal asset and promoting their CFOs to CEO, according to executive search firm Russell Reynolds’ Chief Financial Officer Moves North America, Q1 2010.


Currently there are some 50 CEOs in the Fortune 500 who were previously CFOs for the same company. Their numbers recently increased, at least on an interim basis, as Marcel Smits, the CFO at Sara Lee, was promoted to the CEO slot.

CFOs have been promoted to CEO typically in organizations that are heavy on logistics or analytics, says Christopher Langhoff, who specializes in financial officer assignments for Russell Reynolds. He offers the example of Clarence Otis, Jr. at food services firm Darden–which owns and operates restaurants such as the Olive Garden and Red Lobster.

Otis started with the company in 1995 as vice president and treasurer and progressed to CFO. He was appointed CEO in 2004. Similarly, David West joined the Hershey Company in 2001 as vice president of business planning and development and worked his way up to CFO, where he served from 2005-2007. He was promoted to CEO in 2007.

It’s rare, however, to see a move from CFO to CEO in the tech industry, says Langhoff.

The ascension of CFO to CEO is not likely to slow down any time soon. “We have more and more clients that are coming to us asking for a world class CFO that will likely be ready to be CEO in two to three years,” says Langhoff. “That’s a tall order. We looked back and many times prior to the appointment of a CEO, the person had served, on average 16 years at the company.”

The first quarter also showed a continued, robust turnover of CFOs in the middle market. “The lifespan of a CFO can be shorter than an NFL career,” says Langhoff. As for the rest of the year, Langhoff predicts more turnover. Over the past four months, Russell Reynolds reported a dramatic increase in search activity in the United States, Europe and Asia that spans industries.

The spike has been most pronounced within the financial services sector. Companies like Bank of America, Morgan Stanley, Neuberger Berman, Kellogg, PepsiCo, Walt Disney, Dow Chemical and CVS/Caremark all named new CFOs.

Says Langhoff: “When Sox was in full gear there was a need for a CFO who was a CPA. Now, companies are looking for a strategic CFO, a business partner. There could be a big shift.”