Fraud

Dorky Accountant Robbed His Employer to Buy Hookers and Blow Because Some Dude at the Office Made Fun of Him

Y’all ready to meet a real bad ass? You sure? I’m not sure you can take this. Darren Carvill, 38, is headed to jail after a “weekend of madness” which included hookers and blow funded by approximately £170,000 ($220,000 USD) he stole from his employer, a car servicing company. The Sun reports: A source revealed: […]

auditor fraud pwc colonial fdic

Accounting Fraud Watch: Jumio Founder, Former College Controller, Ex-Roadrunner Execs

We arrived late to a couple accounting fraud settlement parties thrown by the SEC recently. All the Lagunitas and buffalo chicken dip were gone, and we were stuck drinking Busch Light and munching on carrot sticks. But we’ll still recap what happened at these shindigs anyway. Silicon Valley startup Jumio’s ex-CEO settles SEC fraud charges […]

Have You Been Approached By a Colleague to Participate In a Fraud?

Good morning, GCers. Some friends of ours at the University of Illinois at Urbana-Champaign and Queens University in Kingston, Ontario are conducting research on group fraud, and we’re hoping you can do them a solid and help them with their project. While I’m sure they wouldn’t pass up an opportunity to hear about a juicy […]

Ex-KPMG Partner’s Fraud Trial: Opening Arguments

A jury heard opening arguments in a Manhattan courtroom on Feb. 12 in the trial of a former high-ranking audit partner at KPMG who was charged with conspiracy and wire fraud for his role in a scheme to cheat the Public Company Accounting Oversight Board inspection process. David Middendorf and co-defendant Jeffrey Wada, a former […]

Ex-NBA Star Kevin Garnett Believes His Former Accountant Helped Wealth Manager Screw Him Out of $77 Million

During his illustrious 21-year NBA career, Kevin Garnett was a 15-time all-star, named the league’s MVP in 2004, and won a championship with the Boston Celtics in 2008. He also is the Minnesota Timberwolves’ all-time leader in steals. But Garnett doesn’t take too kindly to having $77 million stolen from him. That’s what he is […]

How Do We Fraudulently Boost Revenues for Thee? Let Me Count the Ways

If you’re going to get busted for using fraudulent accounting practices to artificially inflate your company’s revenues, you might as well make it worth your while—or at least worth the fine you’re going to have to pay to the Securities and Exchange Commission. The SEC levied fraudulent accounting charges against Tangoe, formerly a public telecommunications […]

Colonial Bank Collapse Will Cost PwC $625 Million, Reports Say

[Updated with statement from Bartlit Beck Herman Palenchar & Scott] Reports are hitting the interwebs this afternoon that a federal judge has ordered PwC to pay the Federal Deposit Insurance Corp. $625 million in damages for failing to uncover a long-running fraud scheme between its client Colonial Bank and the now-defunct mortgage lender Taylor, Bean & […]

cpa caught red-handed

Catching Your CPA Stealing From You Redhanded Must Be Oh So Satisfying

If you’re an accountant and you plan to steal from a client or your employer or whomever, one thing is certain: You are confident. Why else would you try to embezzle money unless you were sure you wouldn’t get caught? As noted criminal Sam Antar has said, “It’s a calculated risk. Everybody takes precaution against […]

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Sarbanes-Oxley 15 Years Later: Accountants Need to Speak Up Now More Than Ever

This Sunday, July 30, 2017, marks the 15th anniversary of the enactment of the Sarbanes-Oxley Act (“SOX”) of 2002. SOX emerged after the “smartest guys in the room” caused Enron to implode, and WorldCom magically erased billions in earnings overnight. The scandals shook the public’s confidence in the reliability of financial reporting and led to […]

Tesco Bank Deals with Digital Heist

Cybersecurity experts and IT auditors better saddle up — the world just experienced its first successful digital bank robbery. The Tesco heist Last weekend cyber criminals executed a sophisticated attack on Tesco Bank (subsidiary of the British grocery chain) and successfully stole £2.5 million (~$3.1 million) from customer accounts. While the money was refunded quickly […]

IRS Scammers Coming Right at YOU, Tax Professionals

We've talked before about how unlikely it would be for an accountant to fall for the ol' "This is the IRS and you're about to be arrested unless you pay your overdue taxes" phone trick, but it seems that some enterprising up-and-comer at IRS Scams, Inc. realized that a few tax professionals would download a […]

Accountant Who Stole From Chicago Cubs, Cancer Patient Well On His Way to Making Enemies Out of Just About Everyone

There's probably nothing more agonizing in the world of sports than being a Chicago Cubs fan. Despite more than a century of disappointment, abuse and losing in every way imaginable, Cub fans remain loyal. I mean, what else are they gonna do? Right around the turn of the next century when they finally win another […]

White-Collar Crime Watch: An Online Dating Scam, A Fake CPA, and A Tax-Evading Stripper

My grandma got wrapped up in an illegal money-making scheme once. She started taping movies off TV, editing out the commercials, hand-labeling the VHS tapes, and selling them for $3 out of a cardboard box on her driveway. When I caught her, I quickly shut her new business venture down. Luckily, it's 2016 and none […]

FYI: IRS Doesn’t Accept Payments via iTunes Gift Cards

I guess TIGTA needed to put this out there: The Treasury Inspector General for Tax Administration issued an alert Friday warning that it has received information that callers impersonating IRS employees or the Treasury Department are demanding payments on iTunes Gift Cards. TIGTA noted that the scam callers may also request payment of taxes on […]

CPA Given Five Years to Think on ‘Thou Shalt Not Steal’

California CPA Donald Gridiron was sentenced to 57 months in prison for stealing more than $4 million from a New Jersey church and another nonprofit where he served as treasurer. Gridiron was also ordered to pay $5.1 in restitution. Apparently this all happened when some friendly bets on the golf course spiraled into something slightly […]

White-Collar Crime Watch: Polygamists, Fixed Tennis Matches, An Unfunny Accountant

Recently, Kraft Macaroni & Cheese claimed that it switched the ingredients in our beloved cheese packets to more natural, healthy options WITHOUT OUR NOTICE. As a woman of taste with a sensitive and discerning pallet who pretty much subsisted on a steady diet of mac and cheese through childhood and well into college, I definitely […]

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

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 usFun 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 […]

White Collar Fraud Watch: a Dancing CFO, a Spanish Princess and a Vatican Accountant

An embezzling CFO, a tax-evading princess, and a money-laundering Vatican accountant walk into a bar. Oh, sorry, I meant a court room, to answer for their respective white collar crimes. This may sound like another GC witticism -– we think we’re hilarious over here -– but this time, I didn’t make anything up. As it turns out, these individuals are an actual bunch of white collar scofflaws. True story.

Accountant Worked One Day, Allegedly Embezzled $15k

Here's an impressive feat of (alleged) fraud: a woman worked at a company for one day and that was enough for her to embezzle almost $15,000. St. Louis County prosecutors say that Angela Phan stole the money from Triplematic Dispensers from July 1, 2014, and Dec. 6, 2015:  Phan had worked for the company for […]

Florida Still Cranking Out Unsophisticated Tax Schemes

If you or someone you know is thinking about concocting a haphazard tax fraud, it may be tempting to go with a tried and true method that goes something like this: Step 1: Reside in Florida Step 2: Steal a bunch of taxpayer information Step 3: eFile a bunch of tax returns with this stolen […]

Accountant Won’t Be Taking a Walk in the Woods Anytime Soon

James Hammes, who spent 6 years on the lam walking the Appalachian Trail, pleaded guilty earlier today to wire fraud.  The judge warned him that she could impose a maximum sentence of up to 20 years, although his plea deal should result in less time. Either way, it'll be more than enough time for him […]

Please Don’t Be Like This Accountant Who Got Scammed Over Email

Here's an unfortunate situation that hopefully none of you ever have to go through: The accountant for a U.S. company recently received an e-mail from her chief executive, who was on vacation out of the country, requesting a transfer of funds on a time-sensitive acquisition that required completion by the end of the day. The […]

Madoff Auditor Better at Cooperating Than Auditing, Won’t Serve Time

Auditors facing over 100 years in prison should take note: Madoff auditor David Friehling to get 2 yrs supervised release which includes 12 months home detention. So no prison time — Matthew Goldstein (@MattGoldstein26) May 28, 2015 Friehling given credit for cooperation which included days of testimony at long criminal trial last year. DOJ called […]

“Just Ask the Guy” Not Always a Futile Fraud Detection Method

Boonlomp Soonthornchai handled trustee, executor and accounting services as a partner at Yount, Hyde and Barbour in Middleburg, Virginia.   In 2004, he began depositing client funds into his personal accounts, concealing the "the source of the money in his personal ledger." He then admitted to the embezzlement, "[w]hen confronted by firm board members and […]

Olympus Decides Fighting Lawsuits for Accounting Scandal Not a Pretty Picture

Olympus Corp, proud owner of a $1.7 billion accounting scandal, decided to say sayōnara to 11 billion yen ($92 million) to settle two civil lawsuits brought by investors. The company, who also settled litigation in the U.S. for $2.6 million in 2013, "had been defending against the claims, but decided that 'swiftly resolving this matter through […]

Man Who Lived Out Fantasy of Screwing Over a Major Airline Sentenced to Six Years in Prison

Paul Anderson, a former Delta Airlines employee, defrauded Northwest and Delta Airlines out of $36 million. In a just world, we would proclaim him a hero who sees the injustice of horrendous business practices and does right by all of us who have been fucked over by an airline. Alas, we live in nation of […]

Ex-Crazy Eddie CFO Now Judging Fellow Criminals on Their Criminal Talents or Lack Thereof

If there's anyone who knows about being a criminal, it's former Crazy Eddie CFO Sam Antar because he is one. Perhaps that's why CNBC recruited him to judge fellow criminals' performance much like Michelle Visage judging drag queens on their cakes and tucks (don't Google that). First, the background on the scam up for judging: […]

Disgraced CEO Claims Stealing $665 Million Was Just Incompetence, Not Theft

You wonder sometimes why these guys say anything at all instead of just keeping their traps shut: A former investment CEO was sentenced Friday to 14 years in prison and ordered to pay $665 million in funds lost to his former clients. “I may be incompetent, but I’m not a thief,” Eric Bloom, 50, said […]

Let’s Not Rush to Judgment Just Because a Guy Blew Off a Meeting About Accounting Discrepancies 5 Minutes Before It Started

A man who spent his entire 32-year-career in the accounting department of Frisch's Restaurants — purveyors of the iconic Big Boy — has been accused of stealing $3.3 million from the company, which he may or may not have blown at the casino. In a statement filed with the SEC, the company assured shareholders that […]

Satyam Founder Sentenced to 6 Months in Prison for Massive, Obvious Fraud

Remember Satyam? That Satyam? Yeah, it's been awhile for us, too. Satyam's PwC India auditors already received a lifetime ban, but what about Satyam's founder? Surely you've been wondering what sort of slap on the wrist he'd get for one of the largest and most blatant frauds in history? Wonder no longer: A local court […]

Ex-Enron CFO Sorry About Sarbanes-Oxley, Guys

Enron's former CFO was at the University of New Mexico last week speaking about, well, fraud and stuff because that's pretty much the only thing you can do when you're a well-known convicted felon who played a part in bringing down your former company and a prestigious accounting firm. Water under the bridge and all […]

Old Lady Convicted of $190,000 Fraud and Doesn’t Even Have to Miss Christmas

The ACFE says 7 percent of frauds are detected by accident and only 3 percent are discovered by the external auditor, proving that fraudsters are 4 percentage points dumber than auditors are smart. That’s pretty much what happened with poor, dumb Alice Riley, the 61-year-old former clerk for the City of Auburn, Kansas, who was […]

The Stupid But Wealthy Athlete’s Guide to Not Getting Ripped Off

Wealthy athletes are easy to scam. Really easy. Not all athletes know how to handle a fortune. Wealthy athletes are good at playing sports, not managing their millions. We financial types who know how to do sexy stuff like add (er, ten key and use spreadsheets) have a duty to protect the investor –- even […]

Defunct Crazy Eddie Won’t Let Fraud Get in the Way of Continued Excellence

As far as bullshit recognitions go, this one has to be up there. Former Crazy Eddie CFO, reprehensible villain and (full disclosure:) friend of GC Sam Antar tipped us off to an email he received on behalf of Mitchell Antar — brother of criminal mastermind Eddie Antar — who did prison time for his part […]

PwC Is Raking It In on Old Fraud

As the multibillion-dollar scheme led by Tom Petters approaches its sixth anniversary, the meter is still running for the lawyers and accountants sorting through the corporate empire created by the former Wayzata businessman, and the array of creditors and investors who did business with him. More than $83 million has been paid to the lawyers […]

Scott London Talks About Relationships, Rolex Watches and How He Hates that Parking Lot Picture

ICYMI, MarketWatch interviewed Scott London the other day — which I suppose was a good idea since interviews might get a bit more difficult after London heads off to prison to serve his 14 month sentence next month. In the interview, London comes off as approachably remourseful, almost like a grandma apologizing to her heirs […]

Bernie Madoff’s Former Accountant Pleads Guilty But Clueless

Paul Konigsberg is going with the guilty but ignorant and terrible at accounting defense: A longtime former accountant to Bernard Madoff pleaded guilty Tuesday to falsifying records and other charges in connection with the convicted financier's Ponzi scheme. "I'm here today to take responsibility for what I did that was wrong," Paul Konigsberg, a former […]

Listen to a Fake IRS Agent Try Telling Ex-Crazy Eddie CFO He’s About to Be Arrested

Perhaps you have heard of some very ambitious (and stupid) scammers posing as IRS agents who have been relentlessly threatening honest Americans with jail if they don't pay up immediately. Today, those scammers called the wrong former CPA. Considering the fact that Sam Antar didn't do any time for the Crazy Eddie fraud, you can […]

Not Auditing Is Twice as Effective as Auditing at Catching Fraud

Today, we have an interesting ACFE report that not looking for fraud is more than twice as effective as external audits at detecting internal fraud. From CFO.com: In the recent past, the Association of Certified Fraud Examiners has described where companies should concentrate their monitoring for employee fraud. In finance departments, for example, a majority […]

Ex-KPMG Partner Who Gave Insider Tips to His Former Golf Buddy Is Going to Talk About Ethics Before He Goes to Prison

For the low low price of $158, you can sit in on a live video interview with fallen star Scott London, who will be giving insight into the importance of ethics before he heads to prison due to his the ethical deficiency that led him to profit off insider tips he gave to his golf […]

Qualcomm Managers Accused of Insider Trading by SEC Didn’t Even Try to Hide It

When you think insider trading, you think throwaway pre-paid phones, scribbles on napkins, and clandestine meetings under the dark of night. For three Qualcomm sales managers accused yesterday by the SEC, all that was way too much work. From the SEC's press release: The SEC alleges that Derek Cohen, Robert Herman, and Michael Fleischli learned […]

If You’re Engaging in Insider Trading, You Probably Shouldn’t Connect With Your Insider On LinkedIn

Two guys in Australia have been arrested for insider trading, money laundering, corruption and abuse of public office. Australian Federal Police allege the offenses went down between August 2013 and May 2013 to the tune of $7 million AU (about $6.5 million US). How did they get caught? Funny you should ask. An astute foreign […]

CFO Felon Not Sure Why AICPA Didn’t Pick Up the Phone to Talk About His Fraud

Last week, ex Crazy Eddie CFO, notorious convicted felon and known Twitter troll Sam Antar tipped us off to a questionable AICPA webcast called "Voices of Fraud," which ended up on his radar likely because he has a robust Google Alert for his own name. Here's what he told us: The AICPA is offering a […]

A Tale of Barry Minkow’s Right to Redemption (or Lack Thereof)

You may have read that dedicated criminal Barry Minkow has once again been sentenced to prison, this time for ripping off a church to the tune of $3 million. A CHURCH. $3 MILLION. If that isn't the sign of large, brass cojones given his criminal past, I'm not sure what is. But you see, some […]

Now That He’s Sentenced, Scott London Plans For the Future

This is worth pulling out of the archive. In an exclusive interview last year, London tells CNBC he received $50,000 in cash, a watch worth $10,000, and $10,000 in "gifts" for his wife by giving tips only an insider would have to his pal Brian Shaw. As we all know by now, Scotty walked away […]

If a Movie About Fraud Was Funded With Fraud, That Would Be Dumb (and Dumber)

The source of the $100 million used to finance Oscar-nominated The Wolf of Wall Street is being openly questioned in a Los Angeles courtroom. Brad Krevoy and Steve Stabler, producers of the 1994 hit Dumb and Dumber, are suing Red Granite and its principals, Riza Aziz and Joey McFarland, for being excluded from a sequel. […]

Man Sentenced For Fraud While Waiting To Serve First Sentence for Fraud

We all know zebras can't change their stripes, and former Crazy Eddie CFO Sam Antar has taught us not to believe criminals when they claim they are sorry and repentant. One Peter In Cho, the former head of a Chicago securities brokerage, was so repentant after he was sentenced to 5 1/2 years in prison […]

If It Sounds Too Good to be True, It’s Probably a Pyramid Scheme

The SEC busted yet another alleged pyramid scheme, and this one implicated the cloud in their malfeasance: The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and […]

Man With Deep Pockets Busted Stealing a Lot of Laundry Money

Just how many loads of laundry could one do with $460,000 in stolen quarters? That's probably not the question asked by public works inspector Thomas Rica, who pleaded guilty this week to stealing that much in quarters from the meter collection room of the New Jersey town for which he worked. “We’re dealing with the […]

Dewey Even Want to Know How Much Trouble the Ex-Heads of This Failed Law Firm Are In?

This is bad. Very very bad. Let's hop in the time machine and go back to 2012, when Colin caught us up on just how bad the situation was over at Dewey (spoiler alert: tax partners were jumping ship and heading to KPMG): You might not be aware of this, but mega law firm Dewey […]

Here’s a Textbook Case of Dumb People Engaging in Illicit Sexting Spiraling into Extortion, Embezzlement

Where exactly does "sexting extortion" fall on the fraud triangle, anyway? In today's sordid tale of embezzlement gone wrong, we present Shelly Lough of West Virginia. Shelly worked as a Bethany College cashier before a single misdirected text turned her whole life upside down. Usually, the recipient of a text not intended for their number […]

Scott London’s Updated LinkedIn Profile Is the Greatest Thing Ever

As pointed out by Attestation Update, looks like Scott London is hoping to put all this insider trading drama behind him and start fresh. He brings to the table years of experience and just a few bad choices. If nothing else, you have to give the guy credit for giving exactly zero fucks instead of […]

Protip For CPAs: Don’t Embezzle From Your Employer to Pay For Your License Renewal

There is always "that guy" who has to ruin it for everyone. So if next time you go to renew your CPA license, the state board asks you "did you steal from your employer to pay for this license renewal?" you know why: An accountant and finance manager for a local tool and die company […]

According To This Paper, It Takes Cojones To Commit Fraud

No, really, that's actually what the paper says. The abstract: What factors explain the behaviors of corporate leaders who engage in spectacular frauds? Is it greed? Is it power? Are these leaders, as some critics allege, simply psychopaths? Or is something else going on? In this Essay created for a symposium on the “agency problem,” […]

Madoff Accountant’s 5-Year-Old Kid Was Not a Very Good Investor, Therefore He Invested in Madoff

Bernie Madoff's "outside auditor" (popularly known as his "accountant") David Friehling already pleaded guilty to fraud in 2009, at which time he told judge U.S. District Judge Alvin Hellerstein "I am truly sorry for the suffering of all the victims." It turns out among the victims is Friehling's own son, who was five years old […]

Ex-Madoff Accountant Got an Early Start on ‘Clearing His Good Name’

When you're known as "the guy Bernie told us could help with our tax returns," it means getting the ball rolling before the crack of dawn:  At 6 a.m. on Thursday, agents of the Federal Bureau of Investigation met Mr. Konigsberg at his lawyers’ offices in Midtown Manhattan and arrested him. He is expected to […]

CliftonLarsonAllen Settles with Dixon for $36 Million Over Crundwell Fraud

In addition to CLA coughing up their share, Fifth Third Bank will pay $3 million, and the city's auditor Sam Card will pay $1 million for a nice round sum of $40 million total, according to Saukvalley.com.  CLA provided us with a statement from CEO Gordon Viere: The allegations of fraud committed by City of Dixon Comptroller […]

Footnotes: ‘This Tweet does not constitute an offer of any securities for sale.’; IRS Nominee Gonna Get Grilled; The End of Estate Tax Planning? | 09.12.13

Siegfried Group is looking for Client Service Directors in Washington, DC, Chicago, and San Francisco. [GCJ] We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale. — Twitter (@twitter) September 12, 2013  Hatch: IRS nominee has 'great many questions' to answer  [The […]

Crooked CFO Amused By Pearl-Clutching Tweet

RT @footnoted "Seriously flouting established SEC rules makes a mockery of the system!" — Sam E. Antar (@SamAntar) August 30, 2013

Ex-Chicago Comptroller Was Soooo Chicago Before Getting to Chicago

Amer Ahmad resigned as Chicago's comptroller about three weeks ago, but yesterday is when we found out just how qualified he really was for his job:   On Thursday, Ahmad was indicted in Ohio on federal corruption charges in what prosecutors described as a more than $500,000 kickback scheme involving state investment business while he […]

Detecting and Preventing Sex Fraud Isn’t All That Different From Detecting and Preventing Financial Fraud

Welcome to the latest edition of Accumulated Deprecation, Greg Kyte's monthly column. Go here to read more of Greg's posts.
 
You're a CPA which basically makes you a sex god; a wrathful sex god, because when people think about having sex with you, they tend to say things like, "god damn it."

Today’s Corporate Fraud Is Making Andrew Fastow Uncomfortable

“In my opinion, the problem today is 10 times worse than it was when Enron had its implosion in what was called the era of corporate fraud,” said Fastow. “The things that Enron did, and that I did, are being done today. In many cases, they’re being done in such a manner that makes me […]

Lapping Schemes Are For Stupid People and Dogs with Access to Lidless Toilets

Any licensed CPA caught perpetrating a lapping scheme should have his or her license revoked immediately and permanently — not for committing an act discreditable to the profession, but for being a giant dumbass. There so many types of fraud that are way easier than lapping. No. Wait. Every type of fraud is way easier […]

Jeff Skilling Is Halfway Home

Skillz, who has been in prison since 2006, had his 24-year sentence reduced today by 10 years by virtue of a "court-ordered reduction and a separate agreement with prosecutors." This has been an ongoing battle ever since JS appealed his sentence and it was vacated in 2009 because "a sentencing guideline was improperly applied." Persistence pays off! […]

Going Concern Contributor Is a Suspect in a $60 Fraud Case

Ed. note: We welcome back Greg Kyte after a brief post-April 15th vacation. He'll join us every month in his Accumulated Deprecation column. Go here to read more of Greg's posts.   Somebody stole $60 out of my desk drawer at work. Not my money. My company's money. You know, the stuff that, as an […]

Jeff Skilling’s Attorney Calls Attention to His Client’s Extra Effort

The good news for ex-Enron CEO Jeff Skilling is that he'll be released from prison almost 10 years earlier than his original sentence of 24 years. The bad news is that the release date is still four years away and while his attorney appreciates the closure, he feels there's still some injustice: "The proposed agreement brings certainty and […]

Get Ready to Put Jeff Skilling Back on Your Christmas Card List

Maybe not Christmas 2013, but some Christmas in the not so distant future: Former Enron CEO Jeffrey Skilling, who is serving a 24-year prison term for his role in the energy giant's epic collapse, could get out of prison early under an agreement being discussed by his attorneys and the Justice Department, CNBC has learned. Skilling, who was […]

Internal Controls Are of the Devil (Or: Why Stealing from the Catholic Church Is So Easy)

The other day I asked my wife if she'd be mad if I started a new religion. I clarified that she would not be required to join my new religion; I just wanted to know if I'd have her support. She didn't really answer. Not out loud. But her nonverbal message was as clear as an auditing standard that was clarified in the Clarity Project1. What she wasn't saying was either (a) she'd be pissed if I really did it, or (b) she'll tolerate my stupid questions, or (c) she'd be shocked if I could get more religious followers than I have Twitter followers2.

Woman Misunderstood ‘Crazy Accounting’ to Mean ‘Take Money That Doesn’t Belong to You’

Leslie Lebel used to work in the finance department for the City of Bloomington, Illinois. After seven years on the job, during the time between September and December 2011, she allegedly embezzled $21,000 or so. She was arrested last week this allegedly sticky fingering and prosecutors shared the details in court this week: Lebel accessed […]

Accountant on Probation for Embezzlement Still More Employable Than the Average Non-Accountant (Temporarily)

Generally speaking, accountants are in demand. So much so, perhaps, that prospective employers might overlook small details when hiring one, such as that accountant still being on probation for stealing from a former employer. That's exactly (allegedly) what happened with 39-year-old Michelle Hice. You see, Michelle was fired from a third-party accounting firm in October […]

Bad Spelling Can Derail an Otherwise Promising Career in Fraud

For God's sake, get a good education.

In his 2013 State of the Union address, President Obama said, "To grow our middle class, our citizens must have access to the education and training that today’s jobs require." However, the President failed to mention the education and training that today's crimes require.

Burn of the Day: NJ Embezzler Pleads Guilty To Not Paying Taxes on Money She Stole

Ouch! According to the DoJ, a former employee of Atlantic County Concrete and Material Co. admitted yesterday evading federal income taxes on nearly $700,000 she received in 2008. Nancy Armienti, 59, of Elmer, N.J., pleaded guilty in U.S. District Court to one count of tax evasion. According to documents filed in this case and statements […]

It Looks Like Clifton Gunderson Knew About Rita Crundwell’s Secret Bank Account

Everyone remember Rita Crundwell? She's the horse lady that gave Dixon, Illinois a long face when it was discovered that she had been helping herself to the city's money. About $53 million or so over a couple of decades. That's not Madoff, Stanford, or Petters money, but it's not exactly a small sum. Last summer Dixon […]

Ernst & Young Study Finds That Fraudsters Aren’t So Creative with Code Words Over Email

If you and some cohorts are fed up with walking the straight and narrow, be advised that a recent study by Ernst & Young discovered something that may help assist you in making your future fraudulent endeavor a wild success:   Phrases such as “nobody will find out”, “cover up” and “off the books” are […]

Study: Competing Forensic Accounting Bodies Pretty Much Hate Each Other; Regulation Needed

The continued prevalence of fraudulent activity in business will undoubtedly lead many of you to a career in forensic accounting and/or fraud examination. Because of the nature of their work, you might be under the impression that the organizations in this little corner of the sandbox would be above reproach and bickering over petty differences […]

Let’s Discuss: Auditors and The Responsibility to Detect Fraud

When I finally got around to writing about the HP/Autonomy finger pointing party yesterday, the topic of fraud detection by auditors came up as it often does in these scenarios. More specifically, the statement that "audits are NOT designed to detect fraud."   A friend of Going Concern emailed me later in the day with […]

Stop What You’re Doing and Get One of These 2013 Corporate Scandal Calendars at Once

As dutiful capital market servants, it is crucial that you know all the important dates in the history of your craft. The day Andersen died. The first day the computerized CPA exam was offered. The moment you knew that your joke of a college band was going nowhere and that a degree in accounting was […]

Rita Crundwell to Appear in Federal Court Tomorrow with a Long Face

With the ponies, RV, and Thunderbird all gone, the ex-Dixon, Illinois comptroller must have figured that the jig was up: Former Dixon comptroller Rita Crundwell plans to plead guilty Wednesday to a federal fraud charge that alleges she siphoned more than $53 million from the small northwestern Illinois city’s coffers, according to the U.S. Attorney's […]

This Is Not a Good Day For South Carolina

What the heck is going on in South Carolina? First we find out last week that an "international hacker" got into the SC Department of Revenue and managed to get his or her hands on 3.6 million tax returns going all the way back to 1998. It is being called "the largest cyber-attack against a […]

City of Detroit’s Finance Department Makes Case for Most Hysterically Pitiful Internal Control System in Recent Memory

There are plenty of examples of internal control systems that are, shall we say, miserably deficient. Koss is one example. Dixon, Illinois is another. Churches are victims, too. And there are many, many others. Let it be known that the City of Detroit shall be included as having one of the most contemptible control systems […]

IIA Chief: Resist Temptation, Would-be SEC Whistleblowers

Last week, the SEC announced that it had paid out its first whistleblower award and that the program was coming along just grand as the Whistleblower Office said that the Commission receives "about eight tips a day" since the it started last August. That's great and all, but the internal auditors might be feeling slighted […]

ACFE Fraud Report Fingers You

My fraud IQ sucks. The Journal of Accountancy told me that when I took the "What's Your Fraud IQ" quiz in the August issue. I usually do pretty well. Not this month – 40 percent. I should've cheated. The answers are right there. But like you, I live my life according to a Code of […]

PwC Forensic Experts to Determine How Much Money PFGBest Customers Won’t Be Getting Back

The bright side in all this is…oh, let's face it: when your broker's auditor is in jorts, the situation is hopeless: Peregrine Financial Group's bankruptcy trustee has hired a team of forensic accountants to help figure out what remains at the failed futures brokerage after its CEO's arrest and confession to years of stealing from customers. PricewaterhouseCoopers […]

CFTC Chairman Knows PFGBest Auditors Shouldn’t Have Passed GAAS

Gary Gensler, who may or may not be aware that PFGBest's auditor preferred to don jorts at the (home) office, is familiar enough with auditing standards to know there are certain ones that always need to happen: Commodity Futures Trading Commission Chairman Gary Gensler told lawmakers on Wednesday that Peregrine Financial Group's outside auditors should […]

Ex-NMFA Controller Admits That He Was ‘Probably Negligent’ to Submit a Fake Audit Report But It’s Okay Because a Real Audit Will Confirm That Everything Is A-okay

The New Mexico Finance Authority ("NMFA") has a bit of a mess on its hands. You see, a week or so back, the State Auditor discovered that the audit report – that was submitted six months late – was fake. Bogus. A sham. The NMFA management and board investigated and determined that the authority’s former […]

Pearl Jam Had a CFO?

Yep! And he allegedly stole about $380,000 from the band. King County prosecutors say that Ricky Goodrich swiped the funds from 2007 to 2010, spending it on "lavish family vacations, spa treatments, life insurance and pricey California wines." Luckily for PJ, an accountant discovered the missing money and finally the jig was up. The Seattle […]

Possibly Racist Georgia Accountant Forgets To Pay State Taxes But Remembers To Test Internal Controls

Alright listen, we're all busy. Sometimes I forget to scoop out the litter box or to take a shower for, you know, a few days. It's hard to balance work and your personal life and, in the case of 37-year-old Summer Payne, the work and personal life of an employee made up just so she […]

Lawyer Suing Moss Adams Seems to Have Hurt Feelings After Opposing Counsel Called His Lawsuit “Flimsy”

Anyone remember Frederick Darren Berg? He's a guy who had a thing – nay, a passion – for charter buses. It just so happens that he also was running Washington's largest ever Ponzi scheme to finance his passion. Moss Adams (who Berg says is not at fault) was the auditor for FDB's Meridian funds – […]

Things Are Turning Out Okay for Ex-Olympus CEO, Less So for Current Olympus Employees

Former Olympus CEO Michael "Go ahead and fuck with me, I'm from Liverpool" Woodford took a big risk blowing the whistle on the $1.5 billion accounting fraud at his old employer. In a show of thanks for finding the booboo, the company promptly fired him. A questionable strategy it seems because Mr. Woodford sued Olympus […]

Woman’s Absurdly Unsophisticated Tax Scheme Still Managed to Dupe The Oregon Department of Revenue

As we've witnessed, perpetrators of tax fraud oftentimes utilize very simple methods. Slapping a dead person's name, birthdate, social security number, isn't terribly difficult once the data is obtained; throw some minors on there as dependents and you've got yourself a nice little refund at the expense of some grieving family members. Not complicated. You […]

City of Dixon Sues Auditors Over…Ya Know

That money isn't going to find itself now, is it? An attorney for the city of Dixon filed a civil complaint this morning against the accounting firms that conducted the city's audit for the past 5 years. The complaint says that Samuel S. Card, CPA, P.C., and Janis Card Company, LLC, both located at 501 E. […]

Is There Any Subtle Indication of the Dixon Fraud in the Names of Rita Crundwell’s Horses?

The Associated Press reports that some property of alleged Dixon, Illinois sticky fingers Rita Crundwell will be put up for sale. The property includes her four homes in Illinois, a home in Florida, and a $2.1 million motorhome. So if you're in the market for a place in the Illinois countryside or in a state […]

Chicago-based Recruiting Firm Should Keep in Mind That the City of Dixon Would Jump at the Chance to Switch Places

Shaun Horan is no Rita Crundwell (allegedly!): A former Oak Brook accountant stole nearly $300,000 from his employer by writing checks to himself over a five-year span, prosecutors said Wednesday. Shaun Horan, 31, of the 1600 block of Blackwell Lane in Aurora, appeared in DuPage County bond court on a felony theft charge. Horan is accused of […]

California Board of Accountancy Wants to Throw the Book at Mayer Hoffman McCann for City of Bell Audit

Remember the fiasco in Bell, California? Mayer Hoffman McCann performed an audit of the city except it turned out that they didn't really perform an audit and it was later discovered that some of the city's leaders were making off with some money. The California State Board of Accountancy called MHM's audits "little more than a […]

Dixon, Illinois Finds Itself in a Bit of Pinch Since, Ya Know, $53 Million Went Missing

Accordingly, Dixon Mayor Jim Burke is putting the brakes on any investigation because "[it] would cost the city hundreds of thousands of dollars" and the woman who had the magic credit card is in a bit of trouble. Hey, someone had to apply the tourniquet after the city bled out. [WAND] 

Andrew Fastow Has Some Food for Thought

The ex-CFO of Enron, oh humbly, asks: "If the internal and external auditors and lawyers sign off on it, does that make it okay?" History has shown us that, "that all depends." However, maybe things have changed?  [via HBR]

Oh Look, the Dixon, Illinois Fraud Is Way Bigger Than Everyone Thought

How big? In the neighborhood of $53 million, according to the indictment. Earlier reports had put it closer to $30 million and change. It further alleges that Rita Crundwell stated the scheme in December of 1990 and was "[creating] fictitious invoices purported to be from the State of the Illinois to show the auditors for […]

Here’s an Ominous Statement a Former Dixon City Finance Commissioner Made About Accused Embezzler Rita Crundwell

Crundwell reported to the city's finance commissioner, a member of the City Council, but the mayor declined to comment on whether that current commissioner, David Blackburn, or former Commissioner Roy Bridgeman should have detected the alleged thefts. As Bridgeman left office last year, he praised Crundwell for being an asset to the city and said […]

Minnesota Accounting Professor’s Real World Experience Proves To Be a Double-Edged Sword

Joseph Traxler was the CFO of Centennial Mortgage and Funding Inc. in Bloomington. He helped run an $8 million fraud by misleading banks that allowed Centennial to obtain more loans. He also hid defaults and double-funded mortgages from lenders, as well as little check kiting in order to keep the business afloat (rather than enrich […]

The Dixon, Illinois Fraud Is the Latest Example of Why Reasonable Assurance Is Bullshit

As you know, the former CFO of DIxon, Illinois, Rita Crundwell, has been accused of misappropriating $30,236,503 and 51¢ from Ronald Reagan's boyhood home. It's a haul of Sue Sachdeva proportions, although it appears that obsessive shopping wasn't so much the motive as it was a My Little Pony fascination for a grown woman. ANYWAY, […]