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Tag >> fraud
Dec 10

BREAKING NEWS: Three ex-finance execs of Vitesse charged

Posted by Stephen Taub in US Attorneystock optionsrevenue recognitionrestatementsfraudcompliancechief financial officerbackdating

Stephen Taub

The former chief financial officer and founder and former CEO of Vitesse Semiconductor were charged for their roles in an accounting and securities fraud scheme.

Louis Tomasetta, the co-founder and former CEO and former CFO and Executive Vice President Eugene Hovanec , were charged with securities fraud, making false entries in the books and records of a corporation, making false filings with the Securities and Exchange Commission and conspiracy for their roles in a scheme to manipulate Vitesse's reported financial statements, according to Preet Bharara, the United States Attorney for the Southern District of New York.

Dec 02

Ex-energy CFO sentenced to 16 years in prison

Posted by Stephen Taub in US Attorneysecfraudcompliance

Stephen Taub

The former chief financial officer of an Oklahoma energy company was sentenced to 16 years in prison for his role in a fraud.

David Grose, who served as CFO of Quest Energy Partners LP from 2004 to 2008, was also ordered to serve three years of supervised release upon his release from prison, forfeit $1 million in assets, and pay $1 million in restitution to the company.

Nov 04

Detecting and deterring fraud

Posted by Karen1 in fraudfinancial reportingCAQaudit


Over the past few years, a number of high-profile companies, from AIG to Qwest, have been caught issuing financial statements that were, to put it mildly, less than accurate. How can other CFOs ensure that their firms are not part of this group?

A recent study by the Center for Audit Quality (CAQ) sheds some light on the factors that can lead to fraud, as well as the attributes that need to be in place to minimize the risk of fraud. The study, "Deterring and Detecting Financial Reporting Fraud: A Platform for Action," incorporates the input gained from more than 100 participants in five roundtable discussions that occurred in both the US and the UK over the past year. Among the participants were corporate executives, members of boards of directors, internal and external auditors, investors, regulators, academics and others.

Oct 18

Be competitive, even in the face of growing risks

Posted by dbedell in TechnologyRisk, IT risk management, frauddata managementdata loss preventioncompliance


As a follow-on to my piece last week about IT risk management, it was interesting, and a little shocking, to see that a new survey just out found more than a quarter of global companies experienced some form of information theft or fraud in the past 12 months.

Plus, the fear of this risk is holding many companies back from exploring global growth opportunities.

Oct 06

The new Spitzer?

Posted by dbedell in white collar crime, US AttorneyRisk and CompliancePreet BhararaIn compliancefraudCivil Frauds Unit


Richard Zabel, chief of the criminal division, US Attorney’s Office, Southern District of New York, made some big announcements Monday at the Practicing Law Institute’s all-day seminar on white collar crime, according to a piece on

The office is pouring more resources into white collar crime investigation and prosecution, according to Zabel. Those resources will be used to dramatically increase the number of prosecutors—to 25—and change divisional foci to look at specific aspects of white collar crimes—such as accounting fraud, complex instruments, insider trading, and Ponzi schemes.

Sep 09

Civil frauds unit will beef up post-crisis prosecution

Posted by dbedell in US Attorney GeneralSEC enforcementfraudcivil suitburden of proof


It is time to take a new approach to dealing with fraud, according to Preet Bharara, US attorney for the southern district of New York.

With criminal cases hard to prove and many charges laid coming out of the crisis not finding any purchase, Bharara plans to take advantage of new legislation enhancing US attorney power in civil cases to prosecute in civil court those execs and companies accused of fraud.

Aug 30

Two former Dell finance execs settle fraud charges

Posted by Stephen Taub in settlementSecurities and Exchange Commissionsecfraudcookie jar accountingcomplianceAccounting

Stephen Taub

More problems for Dell.

The Securities and Exchange Commission settled civil charges with two former Dell finance executives for their role in the company's alleged accounting fraud.

Former chief accounting officer Robert Davis agreed to pay a penalty of $175,000, disgorgement of $19,080, and prejudgment interest of $9,078. He also agreed to a five-year suspension from appearing or practicing before the SEC as an accountant.

Aug 25

Ex-Beazer finance exec faces 11 criminal charges

Posted by Stephen Taub in frauddeferred prosecutioncookie jar accountingcomplianceAccounting

Stephen Taub

The former chief accounting officer for Beazer Homes USA has been indicted on 11 criminal counts stemming from a fraudulent accounting scheme.

Michael T. Rand was charged with conspiracy, securities fraud, obstruction, witness tampering, false statements to a financial institution, misleading conduct, and destruction of records, according to an announcement from First Assistant US Attorney David A. Brown of the Western District of North Carolina, and Owen D. Harris, Special Agent in Charge of the FBI in North Carolina.

Aug 17

Punish shareholders for managers' sins? By all means

Posted by Ron F in Securities and Exchange CommissionSarbanes-OxleyRegulationfraudfinancial reportingfinancial crisisEnroncomplianceCitigroupAccounting

Ron F

Barry Ritholtz today usefully repeats a point he made earlier this month in connection with an Andrew Ross Sorkin column about the SEC's proposed settlement with Citigroup and the court's refusal to go along with it.

And that is that shareholders of companies run by corrupt management are supposed to be punished.

Aug 16

Apple supply manager faces fraud, money-laundering charges

Posted by dbedell in Riskfraudforeign corrupt practices actCareers/ManagementAppleanti money laundering


Apple is the latest company to feel the sting of corruption. A supply manager in Asia, Paul Devine, was arrested on Friday for giving Apple suppliers in the region confidential company information to help them win favorable contracts. Devine received more than $1 million in kickbacks from the companies involved.

The mid-level manager is in the custody of the US marshals and will appear in the US District Court in San Jose, California, Monday to face 23 counts of wire fraud and money laundering. According to the indictment, Devine allegedly used a chain of US and foreign bank accounts and a front company for receiving payments.

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