Litigation

Update on Koss fraud

Posted on May 22, 2010
The story of the alleged $31 million fraud at Koss Corp by the company’s former VP of Finance, Sue Sachdeva, hasn’t gotten much air time over the last month or so.  Aside from the usual class action lawsuits when there is a fraud discovered at a public company, the only bits of news that are [...

Wasteful spending at Milwaukee Public Schools

Posted on May 19, 2010
I have spent plenty of time ranting about the employee costs at Milwaukee Public Schools. The bulk of the problem is teacher salaries and benefits, which average $100,000 per teacher per school year. In order to make things work financially within MPS, they must cut salaries and benefits for the teachers...

A victim of United First Financial speaks

Posted on May 18, 2010
This was left as a comment on an article here about United First Financial (UFF) and their Money Merge Account (MMA). Tracy, I wish I had read this earlier, like 2 months earlier. I did a Google search for paying down mortgages, and came across UFF?s Money Merge Account...

Get over the Facebook privacy drama

Posted on May 16, 2010
Today Daily Finance has published an article by me about the current state of the Facebook privacy drama. Simply put, it’s completely overblown. I don’t like the fact that Facebook seems to make huge changes just when I’ve finally figured out the last batch of changes...

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Someone is finally starting to talk sense at MPS

Posted on May 14, 2010
No one is really solving the money problems at Milwaukee Public Schools, but finally the school board is at least talking sense about some of the costs. Last night the school board made it clear that if MPS teachers want the district to restore teaching positions (particularly in elective-type areas like art and music), they [...

Minkow Anti-SLAPP motion filed in Medifast case

Posted on May 07, 2010
The Medifast Inc. litigation over its multi-level marketing division Take Shape For Life (TSFL), and the criticism of it by me, Barry Minkow, Fraud Discovery Institute, William Lobdell, Robert FitzPatrick, and an anonymous message board poster who referred to the company’s board chairman Bradley McDonald as “Pimp Daddy Brad” marches on...

An anonymous source reveals numbers for MonaVie

Posted on May 03, 2010
I received the following information about multi-level marketing company MonaVie via email from an anonymous source. I have written here about MonaVie in the past, and my opinion is that it is another thinly veiled pyramid scheme with an overpriced product (magic juice) as a front...

Marquette Alumni Awards video

Posted on April 30, 2010
Last weekend I took part in an amazing celebration at my alma mater, Marquette University. I was honored with the Entrepreneurial Award from the College of Business Administration. I am grateful to my family for making that education possible for me, and was humbled to have wonderful friends and colleagues join me for the awards [...

No surprise: MPS is cutting teachers because of out-of-control employee costs

Posted on April 30, 2010
Yesterday it was reported that Milwaukee Public Schools is cutting 684 jobs, which includes 260 teachers. The reason? Out-of-control employee costs, thanks to the teachers’ union. The first thing you’ll hear is how the district doesn’t have money, and more tax money needs to be directed to MPS because it’s for the children...

Medifast Lawsuit: Anti-SLAPP motions filed

Posted on April 28, 2010
Anti-SLAPP motions have been filed in the Medifast lawsuit by me and by my co-defendant, Robert FitzPatrick. My motion can be read in its entirety here, and Fitzpatrick’s can be read here. SLAPP stands for Strategic Lawsuit Against Public Participation...

A comparison of Medifast and Pre-Paid Legal

Posted on April 22, 2010
This week Barry Minkow and iBusiness Reporting did a comparison of the business models of Pre-Paid Legal Services Inc. (NYSE: PPD) and the Take Shape For Life division of  Medifast Inc. (NYSE:MED).  Pre-Paid Legal is being investigated by the SEC, and Barry wondered how the compensation plans of Pre-Paid and TSFL stacked up...

Medifast changes auditors: Was Barry Minkow right when he criticized former auditors?

Posted on April 20, 2010
Last week, Medifast Inc. (NYSE:MED) announced that it changed auditing firms. The company previously used Bagell, Josephs, Levine and Company, and they were criticized for the choice of auditors by Fraud Discovery Institute and Sam Antar. FDI’s criticism was summed up in a press release: Expert?s letter sites possible stock-touting of Medifast (NYSE:MED) stock by company?s [...

Medifast lawyers continue to lie to the court

Posted on April 13, 2010
The Medifast (NYSE:MED) lawsuit against Barry Minkow, Fraud Discovery Institute, me, Robert FitzPatrick, William Lobdell, and others marches on. Yesterday, the Medifast lawyers filed an amended complaint in the case. The passage of time has not made Medifast or its lawyers more honest, however, as the amended complaint repeats factual inaccuracies (those are called lies [...

Daughter turns in mom in Tri Energy Ponzi scheme

Posted on April 03, 2010
More than two years ago, I mentioned here a news story about a Ponzi scheme called Tri Energy Inc. The Securities and Exchange Commission first took action against the company in 2005: The Securities and Exchange Commission yesterday obtained a temporary restraining order, an asset freeze, and other emergency relief, in a civil action [...

On working with felons

Posted on April 03, 2010
I have been criticized on many occasions for working with felons in my fraud investigation practice. Specifically, I have been working with Barry Minkow and Sam Antar for over three years on a variety of fraud investigations. Both are convicted felons for their participation in large-scale financial frauds in the 1980s...

Koss Fraud: Unrecorded revenue?

Posted on April 02, 2010
How does a company with about $40 million in annual revenue fall victim to a $31 million (or more) fraud by the VP of Finance? Simply, Koss Corp. gave Sue Sachdeva the keys to the castle. She apparently ran the company’s finance function with little oversight from anyone else...

Why solos and small firms shouldn?t ?partner? with larger CPA firms on projects

Posted on March 27, 2010
A couple of weeks ago I had an email exchange that exemplified why solo practitioners like myself should not “partner” with larger firms on projects. There is no “partnering” about it. The bottom line is their bottom line, and their bottom line is enhanced by two key moves: Profiting from your work Stealing your intellectual property so [...

World of forensic accounting unveils how companies are cheated out of millions

Posted on March 26, 2010
Brad Hicks at Fox6 did a bang-up job of showing the world the job of a forensic accountant: Millions of dollars are missing from a Milwaukee company, and an employee is charged with stealing a staggering sum of money. How deep the fraud goes is something investigators are still deciphering...

Lennar Corp: Being right feels so good

Posted on March 11, 2010
On January 7, 2009, Barry Minkow and the Fraud Discovery Institute issued an initial report on Lennar Corporation (NYSE:LEN), citing 10 Red Flags of Fraud.  Lennar immediately came forward and called FDI and its investigators liars, saying in one press release: Today convicted felon Barry Minkow, acting as an agent for a disgruntled [...

Marquette University Alumni National Awards

Posted on March 10, 2010
I am being presented with one of the Marquette University Alumni National Awards in April. I am honored! College of Business Administration and Graduate School of Management Entrepreneurial Award Tracy L. Coenen, Arts ‘93, Grad ‘96 Tracy Coenen may not know where the bodies are buried, but she knows how to follow the numbers...

The heart of the Milwaukee Public Schools problem: Employee costs

Posted on March 08, 2010
Every year we hear how Milwaukee Public Schools (MPS) has a budget problem. We’re told they simply don’t have enough money to operate the school system. That is an outright lie. Every year they increase spending. Here is a breakdown of the budget and enrollment by year: The 07-08 budget was $1...

Medifast lawsuit update

Posted on March 07, 2010
A few weeks ago, Medifast Inc. (NYSE:MED) sued Barry Minkow, his Fraud Discovery Institute, me, my corporation, William Lobdell (a journalist working with Barry), Robert FitzPatrick (an expert witness on mutli-level marketing and pyramid schemes), and an anonymous message board poster (good luck with that)...

More fallout from Koss fraud, but Michael Koss stays on Strattec board

Posted on March 04, 2010
The latest news related to the $31 million fraud committed by Koss Corp.’s ex-VP of Finance Sue Sachdeva is activity at Strattec. Laughably, Michael Koss was the chairman of Strattec’s audit committee since 2003. In January, he was removed as head of that committee, but still remains on the board and on the audit committee...

This is why welfare sucks

Posted on March 02, 2010
There are many different types of welfare. There are straight-up handouts to those who haven’t earned them. There are programs to bridge a gap and help a family in dire need. There are things like unemployment, which people somewhat earn while they work, and collect after they lose a job...

Lifestyle Analysis in Criminal Cases: Proving Income Without Full Documentation

Posted on February 28, 2010
Both civil and criminal cases often involve an element of proving or disproving income of an individual or business. It is not unusual for a divorce case to include allegations of hidden income or assets. In contract disputes alleging the loss of sales or profits, an accurate determination of income is critical...

Medifast files lawsuit, Fraud Discovery Institute reopens investigation

Posted on February 19, 2010
On Tuesday, Barry Minkow and the Fraud Discovery Institute issued a press release stating they were ending their investigation of Medifast Inc. (NYSE:MED) in order to focus on other companies. One day later, Medifast filed a defamation suit in California against Minkow, FDI, Robert Fitzpatrick, William Lobdell, iBusiness Reporting, me, my company Sequence Inc...

Koss says they?ll be more profitable now that their VP of Finance isn?t stealing $31 million from them

Posted on February 17, 2010
Koss Corporation (NASDAQ:KOSS) filed a 10-Q with the Securities and Exchange Commission yesterday that pointed out the obvious… Now that their VP of Finance isn’t stealing at least $31 million from them, they think they’ll be more profitable...

Fraud Discovery Institute ends investigation of Medifast Inc.

Posted on February 17, 2010
In mid-2009, Barry Minkow and Fraud Discovery Institute began investigating Medifast Inc. (NYSE:MED), and published several reports on the company and its business model. The company was compared to Your Travel Biz (YTB), a company that was under fire from the authorities for being an alleged pyramid scheme...

The U.S. Government wastes our money, and wants us to let them ?run? health care?

Posted on February 16, 2010
You don’t have to look far for examples of the ineptitude of the American Government. They waste billions and billions of dollars each year, but somehow, we’re supposed to believe they’ll do better with health care? Hardly. It’s not even a challenge to find examples of waste and mismanagement in our government...

Timothy Sykes calls foul, Shaq and his lawyer cry

Posted on February 14, 2010
Timothy Sykes is a fantastically successful blogger, penny stock trader, and educator. He makes a living by teaching people how to recognize “pump and dump” schemes by penny stock promoters… and then short those stocks for a profit. They make money when the price of the stock they’ve shorted goes down… which is inevitable if [...

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