Litigation

A little ?Deep Capture? cover-up in the works?

Posted on June 20, 2008
Gary Weiss has a most excellent post on his blog about an apparent cover-up in progress by Patrick Byrne, CEO of Overstock.com (NASDAQ:OSTK). Here’s the deal: For a couple of years now, Patrick has been ranting and raving about conspiracies and Sith Lords and secret fax machines and other oddities related to Naked Short Selling...

Lie about your credentials, win CFO of the Year

Posted on June 19, 2008
Utah Business magazine should be ashamed of itself. Its first ever “CFO of the Year” award went to Gil Fuller, the CFO of Usana Health Sciences (NASDAQ:USNA) who lied about being a CPA. The lies were repeated over and over in SEC filings until Barry Minkow and Fraud Discovery Institute revealed that in fact, Fuller [...

State audit finds overtime problems

Posted on June 18, 2008
No, I’m not surprised. The Journal Sentinel tipped us off about the horrendous overtime situation with state employees several weeks ago. Now an internal audit confirms abuse of the overtime system, along with pure mismanagement of our tax dollars...

Does this sound legitimate to you?

Posted on June 18, 2008
Today I got an email from a marketing firm that specializes in helping CPA firms market their services. The sender of the email was inquiring about whether I charge hourly or fixed fees, and what my hourly rates are. He said his client, a CPA firm didn’t want him to mention their name...

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Preserving some Overstock.com history again

Posted on June 18, 2008
From time-to-time, I like to cut and paste from the ever-entertaining stock message boards about Overstock.com (NASDAQ:OSTK). I admit to being a casual observer. I don’t post on those message boards, but do read on occasion. And this exchange was too good to ignore...

Anatomy of a fraud investigation gone wrong

Posted on June 17, 2008
I recently wrote an article for White Collar Crime Fighter, detailing my experience with a company that tried to do a fraud investigation on its own. The investigation was headed up by the president of the small manufacturer, who should have been spending his time on his real job duties, in order to help the [...

Suspect in title company fraud to be charged with felonies

Posted on June 17, 2008
In March I wrote about a case involving Parkview Title Service and a mom and daughter team that allegedly stole huge sums of money from it. In mid-2006, Bill Molkenthen (the owner of Parkview) believed that Bobbi Moths and her daughter Jamie Wilson were stealing from him, using the money to pay personal bills like [...

Tomatoes and Cheap Labor: A commentary on immigration reform

Posted on June 16, 2008
CHEAP TOMATOES?  This should make everyone think, be you Democrat, Republican or Independent  The following is from a Southern California, LA area school teacher… As you listen to the news about the student protests over illegal immigration, there are some things that you should be  aware of:  I am in charge of the English-as-a-second-language department [...

Thousands of victims of Naked Short Selling, but I?m not naming names!

Posted on June 16, 2008
I’m not an expert on Naked Short Selling. Frankly, I’ve just never really been interested in the topic. Does it appear to exist? Yes. Does it appear to be the reason Overstock.com (NASDAQ:OSTK) is doing so poorly and its stock is far below where it was a few years ago? No...

You thought the MMAC was supposed to help businesses? Wrong!

Posted on June 16, 2008
I used to be a member of the MMAC (Metro Milwaukee Association of Commerce). It’s our chamber of commerce, just with a funny name. I quit paying the toll a few years ago because the organization is worthless. By virtue of its name (COMMERCE), its goal is supposed to be helping businesses...

Fixed Fees: I?m not a fast food joint

Posted on June 14, 2008
Recently I’ve had a bunch of conversations about fixed fees (also called flat fees) in the context of providing professional services: lawyers, auditors, accountants, fraud investigators… And I get a lot of pushback on the idea. Professional service providers have been billing by the hour forever...

R. Kelly acquitted: Will he ever get his reputation back?

Posted on June 14, 2008
This week singer/producer R. Kelly (Robert Kelly) was acquitted by a jury of all 14 criminal charges related to child pornography. It took six years, but only 8 hours of jury deliberations, to reach this verdict. He was accused of first having sex with the alleged victim when she was 13...

Perspectives on the SEC?s no action letter to Overstock.com (NASDAQ:OSTK)

Posted on June 11, 2008
The discussion of the Securities & Exchange Commission’s “no action” letter to Overstock.com (NASDAQ:OSTK) continues around the blogosphere. On the one side we have the supporters of the company and wacky CEO Patrick Byrne (whos says “yipikaye” in response to the situation), who see this as a complete vindication of the company...

This week?s blog carnivals including Fraud Files

Posted on June 11, 2008
I’m a regular participant in blog carnivals, an organized way to promote blogs with similar topics. Each week, a host posts links to some of the most interesting posts on their topic from the last week. This week, Fraud Files is included in the following carnivals: Carnival of Money Stories Carnival of Real Estate Festival of Stocks Carnival of [...

Carnival of Fraud - June 10, 2008

Posted on June 10, 2008
Welcome to the June 10, 2008 edition of carnival of fraud. Tracy Coenen presents From whistleblower to charges of financial fraud posted at The Fraud Files Blog. Leon Gettler presents Dell’s mixed report card posted at Sox First, saying, “Dell has been found guilty of false advertising and fraud...

From whistleblower to charges of financial fraud

Posted on June 09, 2008
The New York Times published a very interesting story about Joseph Ripp, the former AOL CFO who went from being a whistleblower, to finding himself with civil charges of financial fraud. Ripp became a whistleblower in May 2001 when he faxed a letter to auditing firm Arthur Andersen about one of AOL’s business partners...

State stopping payments to 3 voucher schools

Posted on June 09, 2008
Wisconsin’s Department of Public Instruction is indefinitely suspending payments to three voucher schools that are not in compliance with regulations: Bessie M. Gray Preparatory Academy (211 voucher students), Agape Center of Academic Excellence (115 voucher students), Victory Preparatory Academy (48 voucher students)...

Herbalife ?responds,? media doesn?t verify

Posted on June 08, 2008
Today Herbalife Ltd (NYSE:HLF) “responded” to the allegations of lead content in Herbalife products brought by Barry Minkow and Fraud Discovery Institute.  Barry’s allegations were supported by test results from an independent laboratory...

Note to executives prone to spin and deflect

Posted on June 06, 2008
Ethisphere has published its 2008 list of the World’s Most Ethical Companies. One of the guiding principles in putting this list together: The World?s Most Ethical Companies are the businesses that respond not with a PR campaign, but with real action, such as complete transparency for the public and significant effort given to fixing the core [...

Securities & Exchange Commission closes inquiry into Overstock.com

Posted on June 06, 2008
Overstock.com (NASDAQ:OSTK) announced today that the Salt Lake City office of the SEC notified them that it is not recommending any enforcement action against the company. The following was reported: “I know that the SEC has an obligation to look into allegations it receives about any company — even when those allegations are false,” said Patrick Byrne, [...

Milwaukee Public Schools budget time: Fun to be had by all

Posted on June 05, 2008
If you live in the Milwaukee area, you’re well aware that the Milwaukee Public Schools (MPS) is easily one of the worst school systems in the country. The answer always seems to be MONEY. But the money isn’t really “for the children” as they would have you believe...

Antoin ?Tony? Rezko convicted of 16 corruption charges

Posted on June 04, 2008
This afternoon, Tony Rezko was convicted on 16 counts of corruption. He was convicted of working with Stuart Levine to extort millions of dollars from companies that wanted to do business with the state or that needed regulatory approval. The convictions include 12 counts of wire and mail fraud, 2 counts of money laundering, and 2 [...

Headhunters desperate: Now using auto-dialers

Posted on June 04, 2008
I just got a call from a headhunter. Yahoo. But here’s the best part: The number was blocked so it came up private and they were using an auto-dialer. You know… the things telemarketers use to dial, dial, dial, and then connect the call to a person after you’ve said hello? The things you [...

Fund manager being sued for libel

Posted on June 04, 2008
Timminco Limited is suing fund manager Ravi Sood and his firm Lawrence Asset Management because of the following statement made by Sood on Business News Network in April: There is no evidence that they have any sort of proprietary technology. There is no evidence that they can actually deliver on their claims...

Hotel Coenen in Mönchengladbach, Germany

Posted on June 03, 2008
Hotel Coenen in Mönchengladbach, Germany Copyright © 2008 Sequence Inc. All rights reserved. The use of this feed on other websites breaches copyright. If this content is not in your news reader, it makes the page you are viewing an infringement of the copyright...

Are You Ready for Future Labor Shortages?

Posted on June 03, 2008
By Barb Bartlein, CSP People are getting old. Not just in the US but all over the world. The elder population, 65 and older, is the largest growing sector in all developed countries. According to Census Bureau projections, the US elderly population will more than double between now and the year 2050, to [...

?Redemption? trailer - Drama series about the life of Barry Minkow

Posted on June 03, 2008
Disclaimer: I don’t know if Barry can really act! “Redemption” is a drama series based on the life and the crimes of Barry MInkow of Fraud Discovery Institute. As the founder of ZZZZ Best Carpet Cleaning, Barry was responsible for millions of dollars of fraud and went to prison for his crimes...

Article on Barry Minkow?s Herbalife investigation

Posted on June 03, 2008
Yesterday the Los Angeles Business Journal did a feature article on Barry Minkow and his investigation of Herbalife (NYSE:HLF) and other multi-level marketing companies. A few snippets from the article, Minkow Targeting Supplement Maker: Former fraudster hectors Herbalife: Five years ago [actually 13], former ZZZZ Best carpet cleaning charlatan Barry Minkow was released from prison after [...

No profitability to ?maintain? at Overstock.com

Posted on June 02, 2008
Sam Antar pointed out this hilarious directive that Patrick Byrne and Overstock.com (NASDAQ:OSTK) received in 2002 from the SEC. (Note that the company has still never had a profitable year. Ever.) From Overstock.com S-1 filed on 03/05/02: “We have grown quickly and if we fail to manage our growth, our ability to generate new revenues and maintain [...

Overstock.com is doing better if EBITDA is worse than they reported?

Posted on June 02, 2008
This level of logic from the supporters of Patrick Byrne and his supporters is pathetic. Sam Antar has brought up the issue of Overstock.com’s (NASDAQ:OSTK) violation of SEC regulations in reporting EBITDA. The result of that improper reporting? EBITDA is materially overstated by Overstock...

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