White-Collar Crime Watch: a Whistleblower, a Hero Helicopter Pilot and a Dirty CPA Who Cleaned Money

By | 12 months ago

This month in white-collar crime: Will you use your accounting skills for good or for evil?

A new money-making scheme for all of us
Fun fact: in 1925, a scrap-metal dealer bought the Eiffel Tower from an Austro-Hungarian con-man named The Count. Instead of selling international landmarks to unsuspecting scrap dealers –- which I've considered and since ruled out — I think I'd rather become an SEC whistleblower. Or, rather, I'd like YOU GUYS to become SEC whistleblowers and then give me 10% of your reward since I was kind enough to share this information re: "whistleblower rewards" with you1.

Thanks to the Dodd-Frank act, SEC whistleblowers could be entitled to 10-30% of the company's penalty, assuming the assessed penalty is more than $1 million. In the latest case, one such whistleblower will become a multi-millionaire overnight.

A Monsanto whistleblower could snag a $24 million reward for reporting his company's accounting violations to the SEC. Whoa. The whistleblower's information prompted an SEC investigation that:

found Monsanto had insufficient internal accounting controls to properly account for millions of dollars in rebates offered to retailers and distributors of its herbicide Roundup after generic competition had undercut Monsanto’s prices and resulted in a significant loss of market share.

As a result, the company "agreed to pay an $80 million penalty and retain an independent compliance consultant to settle charges that it violated accounting rules and misstated company earnings pertaining to its flagship product Roundup…"

The whistleblowing thing does come with rules, though. For example, internal compliance or audit committee members are required to report the errors or fraud internally first. Then, they have to give the company 120 days to investigate and remedy the situation before complaining to the SEC. However, Stuart Meissner, a representative for the Monsanto whistleblower believes:

the Dodd-Frank Act has created potential opportunities for accountants at thousands of public companies to uncover wrongdoing to protect investors and obtain a bounty at the same time. In the end, [Meissner] pointed out, it would ensure corporations do the right thing and carefully consider concerns related to financial reporting raised by accountants.

"Accountants would be primarily aware of these particular issues—in other words, accounting fraud or accounting manipulation, and inappropriate accounting actions that are not consistent with GAAP—and therefore they’re the first line of defense in correcting any misdeeds by management, and if management doesn’t cooperate, to report it."

Though Accounting Today concedes that the bounty wouldn't be as big as the "$104 million awarded in 2012 to former UBS banker Bradley Birkenfeld under the IRS’s separate whistleblower program," becoming an SEC whistleblower seems like a pretty solid money-making scheme to me.

Former accountant-turned-helicopter pilot killed
One of our fellow accountants got involved with law enforcement and paid the ultimate price. Roger Gowan started out as an accountant in Britain "but on the day he qualified for the job, he quit and started traveling the world." He eventually trained to become a helicopter pilot, and, in 2016, was a poaching investigator for Tanzanian authorities: 

[W]hile conducting anti-poaching surveillance over the Maswa Game Reserve. He and a colleague, Nick Bester, came across a newly killed elephant and circled back to take a closer look, and their helicopter was shot at by poachers who were apparently still at the scene, the police have said. A bullet from a .458 hunting rifle punctured the floor of the helicopter and ripped through Mr. Gower’s leg and shoulder. He managed to land the helicopter but died from his injuries before help could arrive.

According to the NYT, poaching has become a huge problem in Tanzania – “the country has 43,000 elephants, down from 109,000 in 2009.”

Money-laundering thug accountant
See, with whistleblowing and chopper-piloting, you're using your powers for good. With money-laundering, you're using your powers for evil. On January 28, authorities charged 22 people with “racketeering conspiracy, drug trafficking, illegal gambling and money laundering” in connection with an an international sports betting and drug smuggling operation that spanned from the US to Mexico to Australia.

Among the arrested is a CPA who allegedly helped launder the dirty drug and gambling profits.

To launder proceeds, Luke Fairfield, a certified public accountant in San Diego, created shell corporations and provided information to the organization’s members on ways to structure their bank transactions to avoid detection from law enforcement or arouse suspicion.

The crime operation itself was pretty horrifying, especially when the bookies tried to collect debts. In one case, thugs sent threats, including “a DVD depicting a masked person beheading two men with a chainsaw and a knife, along with the message, 'If you don’t pay us our money, this will happen to you.'” Yikes.

1 By reading this article, you have agreed to my Terms and Conditions. You agree to give 10% of any and all whistleblower rewards and/or proceeds from sale of internationally recognized landmarks to me. Make check payable to me, Leona May. This agreement is iron-clad.

Image: iStock/kmlmtz66

 

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