Litigation

Primerica Financial Services: The Fake Job Interview

Posted on May 20, 2013
Primerica Financial Services is a multi-level marketing company that sells life insurance and investments. I’ve written about Primerica in the past, questioning whether Primerica is a pyramid scheme, and whether PFS is a scam. The bottom line is that Primerica sells legitimate products and services (life insurance and investments), but sells them at inflated prices [...

Lawsuit Against Expert Witness Highlights Issue of Conflicts of Interest

Posted on May 15, 2013
A lawsuit  recently filed in federal court in Chicago by Cottrell Inc. against J. Nigel Ellis highlights the issue of conflicts of interest for expert witnesses. Ellis is reportedly the founder of Ellis Litigation Support, Dynamic Scientific Controls, and Ellis Ladder Improvements...

ABA Section of Litigation?s Sound Advice: Dividing Shared Business Assets During a Divorce

Posted on May 14, 2013
Earlier this year, I recorded a Sound Advice podcast for the American Bar Association’s Section of Litigation.  When dividing shared business assets in a divorce, it is important to fully evaluate the finances of the businesses. It is impossible to fairly divide these assets if you do not dig into the financial details...

CHECKLIST: Gathering Financial Documents for Divorce

Posted on May 06, 2013
This article was originally printed in the ABA Section of Family Law eNewsletter, April 2013. Financial documents are at the heart of divorces. Regardless of how contentious or amicable a divorce is, the finances of the spouses will need to be separated, and financial documents are required to make the division...

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Kevin Trudeau Bankruptcy Filing

Posted on April 25, 2013
Serial charlatan Kevin Trudeau is up to his old tricks. Despite being caught by regulators violating consumer protection laws many times… despite being fined and sanctioned multiple times…. despite repeated violations of injunctions and orders…...

My Spouse Is Hiding Assets In Our Divorce?

Posted on April 19, 2013
One frequently asked question from divorcing individuals is what to do if the spouse is suspected to be hiding assets. I recently outlined the steps that should be taken if a spouse is worried about the other spouse manipulating assets and income: If you think your spouse may be attempting to hide income or assets [...

Dave Ramsey Officially Sucks

Posted on April 15, 2013
I have always been a big Dave Ramsey fan, and believed that his financial advice for consumers is first rate. But today Dave Ramsey got it wrong in a big way. On his blog, he published an article about making money in multi-level marketing. The article failed to acknowledge the fact that over and over [...

Is Usana Running an Illegal Pyramid Scheme?

Posted on April 12, 2013
All good multi-level marketing companies have one thing in common: They fail to disclose enough information to allow consumers and regulators to determine if they are in the business of recruiting or selling products. They disclose just enough facts and figures to make it appear that they are being transparent...

Scott London?s Other Crime

Posted on April 11, 2013
Former KPMG audit Partner Scott I. London brought great shame to the accounting profession this week by being charged with conspiracy to commit securities fraud through insider trading. After nearly 30 years with KPMG, London went down in flames after being caught passing insider information on audit clients of the Los Angeles office to his [...

Scott London?s Other Crime: Tax Fraud

Posted on April 11, 2013
Former KPMG audit Partner Scott I. London brought great shame to the accounting profession this week by being charged with conspiracy to commit securities fraud through insider trading. After nearly 30 years with KPMG, London went down in flames after being caught passing insider information on audit clients of the Los Angeles office to his [...

Timothy Sykes: Millionaire Trading Challenge

Posted on April 08, 2013
I recently joined the Trading Challenge being being run by Tim Sykes. I introduced you to Timothy Sykes in 2008 when I reviewed his book An American Hedge Fund. He took about $12,000+ that he got for his Bar Mitzvah, and turned it into $1.65 million as a young high school and college student...

Divorce Lies: Red Flags of Common Financial Untruths

Posted on April 05, 2013
This article was originally printed in the ABA Section of Family Law eNewsletter, March 2013. Experienced family lawyers are familiar with the common ways spouses attempt to commit financial fraud in divorce: hiding or undervaluing assets, overstating debts, concealing income, and inflating or fabricating expenses...

Finding Hidden Income and Assets In Family Law Cases

Posted on April 03, 2013
This article was originally printed in the On Balance, the magazine of the Wisconsin Institute of CPAs, March/April 2013. Divorce and child support cases often are highlighted by disputes over money. One party may be accused of artificially depressing earnings, hiding assets or manipulating the finances to lower the financial obligation to another party...

MckMama House Fire is Not Suspicious In the Least

Posted on March 29, 2013
Readers of the Fraud Files are familiar with the story of Jennifer McKinney – - mommy blogger who calls herself MckMama – - who is prone to lies and exaggerations. She and her husband Israel were accused of  lying to and manipulating readers for financial gain...

For Aspiring Forensic Accountants and Fraud Investigators

Posted on March 24, 2013
I receive many requests for information on the field of forensic accounting, including questions on courses of study, certification, job opportunities, and preparing for a career. Over four years ago I wrote this article for students and job seekers, and I thought it was a good time to update the information...

House Fires and Land Contracts

Posted on March 24, 2013
Several readers have posed questions to me recently about house fires and land contracts, and I will attempt to address them in this article. Remember: I am not an attorney, so the information I am providing here is only a product of my research and my experience as a forensic accountant...

Voter Fraud in Milwaukee is Real

Posted on March 22, 2013
Milwaukee Mayor Tom Barrett is somewhat infamous for denying that voter fraud occurs in Milwaukee, telling constituents “give me one name” of a person committing voter fraud. Names have been given over and over and over again. Now there are ten more people charged with voter fraud in Milwaukee County...

Jennifer McKinney Can Pay Her Creditors

Posted on March 22, 2013
Jennifer McKinney – - former mommy blogger nicknamed MckMama – - has good news for the many creditors that she owes hundreds of thousands of dollars…. SHE CAN PAY THEM! This month’s issue of Xyngular’s Momentum magazine featured Jennifer Howe Sauls McKinney on the cover...

Forensic Accountants and the Private Investigator License

Posted on March 19, 2013
Recently the AICPA published an article on its Journal of Accountancy website regarding private investigator licensing rules across the country. There is a concern that forensic accountants may be subject to private investigator regulations since they are doing investigative work...

How Does Multi-Level Marketing Affect People?

Posted on March 14, 2013
Jon Taylor, PhD has written a thorough and excellent book about multi-level marekting: The Case (For and) Against Multi-Level Marketing: The Complete Guide to Understanding the Flaws – and Proving and Countering the Effects – of Endless Chain “Opportunity” Recruitment, or Product-Based Pyramid Schemes...

Finding Hidden Income in Divorce and Child Support Cases

Posted on March 06, 2013
This article was originally printed in the Family Law Review, a publication of the Family Law Section of the New York State Bar Association, Fall 2012. Family law cases often focus heavily on financial issues. Whether the parties to a case are of modest means or great wealth, both sides want their own version of [...

Herbalife Hides Behind IncomeAtHome

Posted on March 03, 2013
You’re listening to a national radio show with a popular host. You hear an advertisement for IncomeAtHome. You don’t know what it is, other than you can make an income while working at home. But why on earth would the voices not tell you exactly what this “business opportunity” is? Because it is Herbalife...

Moving Beyond Quicken Software for a Lifestyle Analysis

Posted on February 28, 2013
This article was originally printed in the ABA Section of Family Law eNewsletter, February 2013. Forensic accountants and Certified Divorce Financial Analysts often use Quicken personal financial software to complete the lifestyle analysis in divorce cases...

Calculating Damages: What is Reasonable Certainty?

Posted on February 21, 2013
One of the common issues raised when an expert calculates damages is “reasonable certainty.” It is not uncommon for opposing counsel to suggest that the expert’s calculated damages are speculative. The calculation of damages necessarily requires estimates and assumptions...

Xyngular: Starve, Binge, Purge, Repeat!

Posted on February 13, 2013
Multi-level marketing companies are getting lots of attention lately thanks to the Bill Ackman smackdown of Herbalife in December. MLMs offering “nutrition products” are of special interest to consumers, and with good reason. They all offer magic potions that claim to make you lose weight, absorb more vitamins and minerals, and cure all diseases...

Is Multi-Level Marketing a Legitimate Business Method?

Posted on February 11, 2013
Defenders of multi-level marketing (MLM) are often heard saying that it’s a legitimate business method! Even government regulators say MLM is legitimate. And it is true that state and federal governments in the United States generally allow multi-level marketing companies to operate with little oversight...

Divorce Financial Analysis: Disappearing Income and Asset Values

Posted on February 06, 2013
This article was originally printed in the ABA Section of Family Law eNewsletter, January 2013. We?ve all seen it before: A spouse owns and operates one or more businesses. Divorce is filed, and the ?out? spouse is told that the businesses have little or no value...

Create Your Own MLM in Ten Easy Steps

Posted on February 05, 2013
Hundreds of thousands of Americans get sucked into Multi-Level Marketing (MLM) companies each year. From Mary Kay to Amway to Herbalife to PrePaid Legal (now Legal Shield), the list is seemingly endless. Each offers its own special spin on the products it sells, but the main focus of an MLM is on recruiting new members...

Herbalife Under FTC Investigation? Or Not?

Posted on February 04, 2013
Today the New York Post reported that Herbalife (HLF) is under investigation by the Federal Trade Commission (FTC), and that has sent the stock price down more than 10%. The newspaper bases this story on a Freedom of Information request done by the newspaper...

mArc RaNdaZza tAkeS bACk His nAmE

Posted on February 02, 2013
First Amendment lawyer Marc Randazza is amazing. He is truly a “First Amendment Badass.”  Last year, he had an unfortunate incident occur, which proves that no good deed goes unpunished. Marc Randazza briefly agreed to represent “investigative blogger” Crystal Cox in an appeal of the lawsuit against her for defamation of Kevin Padrick and Obsidian [...

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