Litigation

The myth of ?reduced budgets? for Wisconsin schools

Posted on February 18, 2011
This week, public workers’ unions in Wisconsin are up in arms because Governor Scott Walker has issued a budget which seeks to strip the unions of many of their bargaining rights. He wants to make the union members pay their fair share for their pensions and health care costs, and the unions aren’t having it! [...

The Tax Man Cometh -IRS Global High Wealth Industry Group

Posted on February 11, 2011
Guest post by Brian Mahany, Esq. A recent article in the Wall Street Journal discussed the new IRS? Global High Wealth Industry Group. Over 1 year ago we warned readers of the new group when Commissioner Shulman announced its formation in an address to the American Institute of CPA?s during October of 2009...

Failing to find fraud when auditing cash

Posted on February 10, 2011
Earlier this week, I posted an article about China MediaExpress Holdings (CCME) and the allegations of fraud that were leveled recently against the company. I took a look at some of the commentary out there, asked questions and made comments, and ultimately decided that I am concerned about the potential that the company is a [...

China MediaExpress: Massive fraud or victim of short sellers?

Posted on February 09, 2011
As I have found out all too well in the last two years, those who are critical of public companies risk retaliation. Retailing failure Overstock.com (NASDAQ:OSTK) has spent years perfecting their methods of stalking and intimidating anyone who dares to criticize their perpetual losses, their wackadoo CEO Patrick Byrne, the gross incompetence of management, and [...

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New tax amnesty program for taxpayers with overseas accounts

Posted on February 08, 2011
The IRS is again allowing people with illegal, overseas bank and brokerage accounts to turn themselves in for reduced penalties. In 2009, the IRS did the same thing, giving taxpayers the opportunity to rat on themselves with the Voluntary Disclosure program...

Spending more money on education does not work

Posted on January 24, 2011
We are constantly bombarded with pleas for more money for education. After all, it’s for the CHILDREN. They DESERVE a good education. MORE MONEY is the answer. Sadly, more money is not the answer. Locally, Milwaukee Public Schools shows us exactly why money is not the problem...

The truth comes out in the Medifast litigation

Posted on January 18, 2011
Nearly a year ago, Medifast Inc. (NYSE:MED) filed suit against me and several others, for what it claimed was defamation of its Take Shape For Life division (TSFL). My client initiated an investigation of Medifast more than year prior to the filing of the lawsuit, and published several reports on the company...

FPCA compliance in the real world

Posted on January 16, 2011
If you follow any business new sites, you can’t help but notice that the U.S. government is talking tough about enforcement. Issues like insider trading, Foreign Corrupt Practices Act enforcement, and healthcare fraud are hot topics. I question the government’s ability to significantly step up enforcement efforts, particularly in light of budgetary issues related to [...

FCPA compliance in the real world

Posted on January 16, 2011
If you follow any business new sites, you can’t help but notice that the U.S. government is talking tough about enforcement. Issues like insider trading, Foreign Corrupt Practices Act enforcement, and healthcare fraud are hot topics. I question the government’s ability to significantly step up enforcement efforts, particularly in light of budgetary issues related to [...

Controlling legal fees and expert fees

Posted on December 27, 2010
With the challenging economy we’ve had over the last couple of years, people are constantly asking me how business is going. The assumption is that people and companies don’t have money for litigation, and so my business is probably suffering...

How to screw up a mortgage modification, Bank of America style

Posted on December 23, 2010
I don’t often feel a lot of pity for people who get themselves into debt that they can’t pay off. I was raised in a frugal family. You only buy what you can afford. You save money for emergencies. And no matter what, you pay what you owe. It’s easy to have no sympathy for [...

Securities Docket Webcast: 2010 Year in Review

Posted on December 22, 2010
2010 has been a momentous year for securities enforcement, litigation and compliance issues?and there are still a few days left in 2010 for more crazy stuff to happen! On December 29, 2010, Securities Docket will host its annual ?Year in Review? webcast featuring many of the leading bloggers and commentators in the field...

Webcast: Follow the Money ? Using Technology to Find Fraud or Defend Financial Investigations

Posted on December 20, 2010
Last week I presented a webcast for Securities Docket, Follow the Money – Using Technology to Find Fraud or Defend Financial Investigations. In this presentation geared toward attorneys, I gave an overview of some of the technology tools I’m currently using in my practice to provide better, faster financial investigations...

Financial analysis in FCPA cases

Posted on December 17, 2010
This week I recorded a podcast for the International Association for Asset Recovery (IAAR), which is accessible to IAAR members on their site. We talked a bit about where financial investigations are going, and how I am using technology to complete these investigations quicker and more effectively...

Deception about the history of Medifast and Take Shape For Life

Posted on December 16, 2010
Robert FitzPatrick filed an absolutely riveting anti-SLAPP motion in the case brought against us by Medifast Inc. (NYSE:MED) and its Take Shape For Life (TSFL) multi-level marketing division. Below is probably the most interesting part of the filing. It discusses at lengthy the shady past of the company, efforts to improperly conceal the prior bad [...

Financial investigation best practices

Posted on December 15, 2010
I recently did a podcast for the International Association for Asset Recovery (IAAR), which is accessible to IAAR members on their site. One of the great questions asked by David Quinones, host of the podcast and Editorial Director for IAAR, related to best practices in financial investigations...

Atlanta newspaper examines MLM scheme Stream Energy / Ignite

Posted on December 11, 2010
By Robert FitzPatrick of Pyramid Scheme Alert In a feature report, a major metropolitan newspaper, the Atlanta Journal-Constitution, examined the MLM scheme, Stream Energy/Ignite, focusing on the question of whether the company is operating a disguised pyramid scheme...

Is ?channel checking? illegal insider trading?

Posted on December 10, 2010
Bruce Carton of Securities Docket wrote a very interesting article called Who’s Checking Your Channel? The article highlights the practice of “channel checking” which has been something investment analysts have done for a long time. Now it appears that our government is trying to decide whether channel checking is actually illegal insider trading...

Congress Seeks More Jail for FCPA Violations

Posted on December 07, 2010
Guest post by Brian Mahany, Esq. More arrests and tough prison sentences for were the topic at the Senate Subcommittee on Drugs and Crime last week in Washington D.C.  Committee chair Sen. Arlen Specter grilled Justice Department officials on November 30th asking why so few individuals are prosecuted under the Foreign Corrupt Practices Act (FCPA)...

A victory for free speech in California: Will I get my victory?

Posted on December 03, 2010
A Swedish film maker, WG Film, won a victory for free speech in California. The documentary film producer made a movie about Dole Food, called “Bananas!”, detailing how the company was using pesticides and how it was treating its Nicaraguan workers...

December 15 Webcast: Follow the Money ? Using Technology to Find Fraud or Defend Financial Investigations

Posted on December 02, 2010
On December 15, I am doing a webcast for Securities Docket. Sign up here. Financial investigations with high volumes of documentation are difficult, time-consuming, and not always effective. Traditional forensic accounting techniques rely primarily on a manual analysis of the documentation, combined with data entry or other primitive means to capture the numbers...

This is why I do white collar criminal defense work

Posted on November 30, 2010
I read a very interesting article yesterday on NYTimes.com, by John Kinnucan of Broadband Research. The FBI “invited” him to wear a wire and essentially entrap clients. He said no, and he told his clients about the FBI’s request. Of course, some are skeptical about his FBI story, but it makes for interesting reading and [...

Books and records control person and FCPA enforcement

Posted on November 29, 2010
I’ve recently been looking more closely at the Foreign Corrupt Practices Act (FCPA) as I consider the types of services companies will need from independent forensic accountants. This is an area in which government enforcement is skyrocketing, and so there are lots of opportunities for me to work with companies that need investigations or ongoing [...

FTC Staff Take Further Measures to Protect MLMs, Making Consumers Easy Prey for False ?Business Opportunity? Solicitations

Posted on November 28, 2010
From Pyramid Scheme Alert newsletter, by Robert FitzPatrick The largest of all multi-level marketing companies, Amway, just agreed to pay $150 million in restitution and reform to settle consumer charges of fraud. The heart of the consumers’ complaints is that Amway uses false information to trick consumers into investing in its “business opportunity...

December 7 Webcast: Follow the Money ? Using Technology to Find Fraud or Defend Financial Investigations

Posted on November 25, 2010
On December 7, I am doing a webcast for Securities Docket. Sign up here. Financial investigations with high volumes of documentation are difficult, time-consuming, and not always effective. Traditional forensic accounting techniques rely primarily on a manual analysis of the documentation, combined with data entry or other primitive means to capture the numbers...

From Chaos to Clarity in Financial Investigations

Posted on November 23, 2010
From my Thought Leadership series at Securities Docket: The financial part of a case can become overwhelming very quickly. Particularly in cases involving white collar crime, securities fraud, Ponzi schemes, or other fraud recoveries, the trail of financial documentation is often very long...

Milwaukee Public Schools: Is merit pay the answer?

Posted on November 22, 2010
Yesterday’s Milwaukee Journal Sentinel had an article on the concept of merit pay for teachers. The idea has been floated many times, but not tried very often. Teachers are against it for the most part. Wouldn’t you be? Why give up your $100,000 compensation package in return for having to earn your pay and benefits? [...

Learn from the costly FCPA mistakes of others

Posted on November 18, 2010
A recent Compliance Week article, An Expensive Lesson on FCPA Compliance [subscription required], provides some valuable insights on the direction that our government is taking with enforcement. Foreign Corrupt Practices Act violations are a huge focus of the feds right now...

Genuine remorse from Sachdeva? Laughable.

Posted on November 18, 2010
Yesterday, Sue Sachdeva was sentenced to 11 years in prison for her $34 million theft from her employer, Koss Corp.  I predicted a little slap on the wrist of 5 to 7 years, so she got two little slaps instead. The Washington Post is reporting that Judge Lynn Adelman gave her less than the 15 [...

Koss fraud coverup deemed ?complex? by the government

Posted on November 16, 2010
Yesterday the government’s sentencing memorandum in the criminal case against Sujata Sachdeva (the woman who stole more than $34 million from her employer, Koss Corp.) was released.  It had a number of items of interest. Prior to sentencing, the prosecution and the defense each get to make their case for a higher or lower sentence...

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