Litigation

Bring Out the Big Guns?

Posted on November 14, 2010
From my Thought Leadership series at Securities Docket: When companies have big problems, they usually bring out the big guns. The benefits of using large law firms, audit firms, and other professional service firms are undeniable. These firms offer a depth of experience that is invaluable, and they have seemingly unlimited resources in terms of [...

The case for independent internal investigations

Posted on November 10, 2010
The United States Sentencing Guidelines (USSG) continue to make life tough for those in charge of corporate compliance and ethics. Corporate attorneys, both in-house and outside counsel, must ensure that companies are following protocols set for by the USSG...

Settlement in Amway class action suit

Posted on November 04, 2010
The following is a summary issued by Robert FitzPatrick and Pyramid Scheme Alert about the historic class action settlement that was just reached with the Amway Corporation, the largest of all multi-level marketing companies. Three directors and advisors of Pyramid Scheme Alert, including Robert FitzPatrick, served as experts and consultants for the victims in this [...

Usana?s ?distributor hall of fame? analyzed

Posted on October 29, 2010
Usana Watch Dog has been busy compiling more data about the Usana Health Sciences “business model” for distributors. He writes about what I already know from my years of research into multi-level marketing schemes: Nearly everyone loses money in these schemes, and those who do make  living are almost always those at the top of [...

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Risks and Rewards of Independent Internal Investigations (ACC Docket)

Posted on October 03, 2010
The Association of Corporate Counsel publishes ACC Docket, a monthly magazine for members. The October 2010 issue features an article by James McGrath, Esq. on the benefits of independent internal investigations. Click here to see a pdf of the article, Risks and Rewards of Independent Internal Investigations...

Internal investigations and the use of auditors and accountants

Posted on September 29, 2010
When whistleblowers report potential ethics violations within companies, the first step the company must take is an internal investigation. The best internal investigations are independent and led by outside counsel, for a variety of reasons. But what about the part of the investigation that involves analyzing accounting records, financial statements, and SEC filings? Management often [...

The fun continues in the Medifast litigation

Posted on September 18, 2010
For nearly two years, Medifast (NYSE:MED) and its lawyers have known that I am not an appropriate target for a lawsuit. Nonetheless, they have pursued their malicious civil suit against me. Since the suit was filed, Medifast has been made aware of all the reasons why they shouldn’t be suing me: I never said anything [...

The Future of Financial Investigations

Posted on September 14, 2010
From my Thought Leadership series at Securities Docket: What is at the heart of almost every securities case, whether the case is pursued by the government or a private party? It is a trail of money. The difficulty in prosecuting or defending a securities case is the fact that there is voluminous financial data that [...

Follow the Money, Find the Fraud

Posted on September 13, 2010
Forensic accounting has been around for decades, but only in the last ten years have people become aware of the profession on a wide scale. Many of the techniques used by forensic accountants to investigate fraud and analyze the numbers are the same today as they were decades ago...

Whistleblower provisions under Dodd-Frank

Posted on September 12, 2010
There has been lots of chatter about the whistleblower provisions under Dodd-Frank. A whistleblower  can earn 10% to 30% of any penalty the federal government imposes against a company. And companies have to be very careful, because there are anti-retaliation provisions in the legislation too...

Who is short selling Medifast stock?

Posted on September 02, 2010
So who is short selling Medifast (NYSE:MED) stock? I’m not, but apparently plenty of other people are. (No, Medifast, I have no idea who it is, nor do I care who it is. That’s your problem. Not mine.) As my readers already know, Medifast is on the hunt for anyone who would dare to say [...

Acquisition by Usana Health Sciences gets them into China (legally, this time)

Posted on August 29, 2010
A few years ago, I was involved in an investigation of multi-level marketing company (MLM) Usana Health Sciences (NASDAQ:USNA).  One of the allegations that came out during that investigation was that Usana was illegally conducting business in China. China has strict laws against multi-level marketing, making it impossible for the company to do business there [...

Another reason why more anti-SLAPP legislation is needed

Posted on August 16, 2010
I am currently on the receiving end of a SLAPP suit, thanks to my good friends at Medifast (NYSE:MED) and their scam-like pyramid-like multi-level marketing division Take Shape For Life (TSFL). SLAPP = Strategic Lawsuit Against Public Participation It goes like this… Someone criticizes your company...

MonaVie lawyers are again threatening critics

Posted on August 15, 2010
These stories never get old. People criticize multi-level marketing in general, and particular MLMs specifically, and the lawyers come running. They cry that the bloggers are saying bad things about their companies, and that can’t be allowed to happen...

Questions raised about the figures reported in USANA?s SEC filings

Posted on August 11, 2010
USANA Watchdog  just posted an article this morning which questions the active associate count of USANA Health Sciences (NASDAQ:USNA) and whether there is illegal recruiting of associates in China. Watchdog’s analysis of the numbers found some very curious things: Associates in Hong Kong have increased by 300% in the last three years, when the rest [...

Penn & Teller on multi-level marketing and pyramid schemes

Posted on August 10, 2010
Last month, Penn & Teller’s Showtime show Bullshit! featured multi-level marketing. They did an excellent job of hitting the high points on why MLMs almost guarantee failure for all the participants. Sure, there will be a couple of people at the top of the pyramid that make money, but that’s only because hundreds or thousands [...

United First Financial is being shopped to private equity groups

Posted on August 07, 2010
Recently, the cat has been let out of the bag that UFirst Financial, the company selling the worthless “Money Merge Account” software via a multi-level marketing business model is on its last legs.  Top members of the salesforce are plotting how to oust other sales people and keep the profits for themselves...

Prosecutors expand use of ID theft laws

Posted on August 06, 2010
by Jack Zemlicka Wisconsin Law Journal With the explosion in social networking and business conducted online, it?s easier than ever for a thief to steal someone?s identity. To fight that, prosecutors are taking a more aggressive approach in how they use Wisconsin?s identity theft laws...

Ufirst Financial software users jumping ship

Posted on July 21, 2010
This interesting information was posted on a Canadian discussion board where the members were talking about United First Financial. As you saw here, some of the top people in UFF see that the company is going under, and are looking for a way to take this horrible software to a new company, and leave all [...

Medifast is abusing the legal system to punish critics of Take Shape For Life

Posted on July 20, 2010
Earlier this year, Medifast (NYSE: MED) filed a $270 million lawsuit against Barry Minkow, me, and several other defendants for what it has alleged are false statements and a conspiracy to damage the stock price of the company. This lawsuit is nothing more than the typical big company suing a critic to shut her up...

Milwaukee County employee Chris Liebenthal engages in ?extensive political blogging? while on the taxpayers? dime

Posted on July 12, 2010
The following press release from Citizens for Responsible Government explains how the Milwaukee County DA’s office investigated political blogger Christopher Liebenthal, and found he was doing his political blogging on taxpayer time. I believe Liebenthal should lose his job and be required to pay back the taxpayers for the wages he stole from them...

Ufirst Financial: This is what a collapsing pyramid looks like

Posted on July 09, 2010
The demise of United First Financial is apparently imminent. The company has had anemic sales for more than a year, and it seemed it was only a matter of time before Ufirst folded. The end is coming nearer, as people at the top of the pyramid are looking to  the best people (not those bad [...

Koss Fraud: We didn?t bother to look at the endorsements on our own checks, but Grant Thornton should have!

Posted on June 26, 2010
The latest news in the Koss Corporation fraud committed by ex-VP of Finance Sue Sachdeva is a lawsuit filed by the company against Sachdeva and auditors Grant Thornton. It’s unlikely that the company will collect much from Sachdeva, but the auditors are a great target because they have deep pockets (especially in the form of [...

United First Financial: Will the last person to leave please turn off the lights?

Posted on June 25, 2010
This was left as a comment on an article on this blog. I have no way to verify the accuracy of any of the information, but wanted to share it with my readers. As of June 2010, UFF is all but out of business. They had their last round of lay offs at the home [...

?Monitoring? That Works

Posted on June 22, 2010
Guest Post by Ronald Kral, MBA, CPA, CMA Managing Partner of Candela Solutions LLC All organizations use some form and degree of monitoring in reaching strategic, operational, reporting and compliance objectives. Yet, many organizations do not fully leverage the power of monitoring in reaching objectives or in supporting their regulatory control assessments...

Correlation between forclosure figures and minority status?

Posted on June 18, 2010
Let me start out this post by saying that I don’t like it when anyone is taken advantage of. Any individual, any group. I don’t like scammers who prey on the elderly, or those who speak English as a second language, or members of a certain religion or ethnic group, etc...

Rich Dad Education: Buyer beware

Posted on June 13, 2010
Robert Kiyosaki is a best-selling author, but his advice is controversial. I’ve always thought he was heavy on hype, light on substance. Nonetheless, Kiyosaki’s “Rich Dad” brand is recognized by many and therefore worth a lot of money...

Risk Intelligence in the Boardroom: Take a Quick Test to Measure Your Company?s Maturity

Posted on June 11, 2010
Guest Post by Ronald Kral, MBA, CPA, CMA Managing Partner of Candela Solutions LLC Sound data, information and intelligence are clearly critical business success factors; however, is it getting to the right people? Too often we think of C-level decision makers as the ultimate end-user...

Barry Minkow debunks the Glenn Beck and Goldline International fraud connection

Posted on June 01, 2010
Recently, Representative Anthony Weiner (D-New York) issued a report on Goldline International to the SEC and FTC, claiming that Goldline is guilty of misrepresenting itself to buyers and charging astronomical prices for its precious metals. The reason Goldline is being attacked? It buys advertising during Glenn Beck’s Fox News television show, and Glenn happens to think [...

Another thinly veiled pyramid scheme: Numis Network

Posted on June 01, 2010
Today Fraud Discovery Institute and Barry Minkow released a report on Goldline International, in response to a report by Representative Anthony Weiner (D-New York). In short, the Weiner report attacking Goldline was politically motivated. Representative Weiner wanted to prove that conservative political commentator Glenn Beck was promoting a fraud in Goldline International, which purchases advertising during [...

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