Legal issues

DaimlerChrysler Hit with Whistleblower Suit, SEC Investigation

A whistleblower complaint has prompted a Securities and Exchange Commission investigation of DaimlerChrysler AG, over possible violations of federal anti-bribery laws, the Associated Press reported."The investigation follows the filing of a whistleblower complaint with the U.S. Department of Labor under the Sarbanes-Oxley Act by a former DaimlerChrysler employee whose employment was terminated earlier this year," the company said in its third-quarter earnings statement.
Tax

IHI's Outside Accountant Pleads Guilty, Will Testify Against Ex-CEO

In a case the Securities and Exchange Commission called one of the biggest pyramid schemes in history, federal prosecutors secured a guilty plea from another participant, who has agreed to testify against Stan Van Etten, former chief executive officer of International Heritage Inc., the News-Observer in North Carolina reported.David Walter Brown, 50, of Raleigh, IHI's outside accountant, pleaded guilty in federal court in Raleigh to a conspiracy charge, agreeing also to testify against Van Etten.
Community News

Grant Thornton, Bank of America Seek to Counter-Sue Parmalat

Grant Thornton and Bank of America are seeking court permission to counter-sue failed dairy group Parmalat, which has filed massive suits against each of the companies.Former auditors Grant Thornton and Deloitte are facing one $10 billion suit; separate suits seeking the same amount were also filed against Citigroup Inc. and Bank of America.Reuters reported that Grant Thornton International (GTI) and Bank of America filed motions in a New York court late Thursday that would remove an injunction that bars the companies from counter-suing Parmalat.
Community News

Marsh May Pay Over $500 Million to Settle Civil Case

With stock prices falling and a new chief executive at the helm, Marsh & McLennan Cos. may quickly settle a civil suit filed by New York Attorney General Eliot Spitzer, but it may cost $500 million or more.According to the Wall Street Journal, which cited people familiar with the matter, the financial services company is eager to settle charges that its insurance brokerage was involved in bid-rigging for its client's insurance contracts. Stocks have dropped more than 37 percent since the suit was filed Oct. 14, and Michael G.
Technology

EU Clears Obstacle to Takeover of PeopleSoft

The European Union's executive body has announced it could find no reasons to stop Oracle's hard-fought battle to take over PeopleSoft Inc., clearing the last antitrust barrier in Oracle's way.The Wall Street Journal reported Wednesday that the European Commission studied the proposal for more than a year and cleared it without conditions. The EU concluded that the presence of PeopleSoft in the business-applications software market didn't "necessarily give rise to more aggressive discounting" and that a larger Oracle wouldn't hurt competition.
Community News

Ovitz, Eisner Relationship Spotlighted in Disney Suit

A shareholder suit brought about by outrage over the severance package paid to former President Michael Ovitz is unveiling some deep dissention in the House of Mouse, the Wall Street Journal reported.The Walt Disney Co.'s current and former executives are the hot seat in a Delaware courtroom, defending themselves against a seven-year-old shareholder derivative lawsuit, the Wall Street Journal reported.The suit accuses Disney's board of failing in its fiscal responsibilities by not properly scrutinizing Ovitz's employment contract when he joined the company in 1995 and then granting him a
Tax

CA Man Gets Prison Term for Harassing Female IRS Agent

Earlier this year, a Santee, California man pleaded guilty to twice sending threatening letters containing white powder to a female IRS agent who was auditing him. On Monday, a judge sentenced James Robert Harer to one year in federal prison according to the Union Tribune. Harer, a self-employed contractor, was responsible for the evacuation of the federal building in downtown San Diego last summer after the second letter was sent to IRS agent Vickie Hom.

SEC, Spitzer Look for Conflicts in Investment, Retirement Planning Relationships

In a new conflict of interest case, the Securities and Exchange Commission (SEC) is finding signs that mutual-fund companies and other investment advisors paid retirement-plan consultants for referrals, the Wall Street Journal reported, quoting sources close to the SEC's year-long investigation.Last December, the SEC began an investigation of possible conflicts within the financial services industry, looking for “quid pro quo” arrangements between consulting firms and financial managers, especially when the two branches fall under the same umbrella company.Last week, New York Attorne
Tax

Court Halts Nationwide Tax Promotion

The Justice Department recently announced that a federal court has ordered a Palmdale, California man to stop promoting two nationwide tax scams. The preliminary injunction entered by Judge Florence-Marie Cooper of the U.S. District Court for the Central District of California orders Joseph O.
Tax

IRS Highlights Examples of Corporate Fraud Investigations

The following examples of fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.151 Month Sentence ReceivedOn July 20, 2004 in Akron, OH, Gary Harris was sentenced to 151 months imprisonment, to be followed by 3 years supervised release, and a $95,000 fine.
Tax

Black & Decker Prevails in Tax-Shelter Suit

The Internal Revenue Service owes Black & Decker Corp.
Tax

California Couple Sues High-Priced Tax Assistance Firm

Lily and Rene Guzman needed help with a federal tax debt, but the firm they hired did nothing more than take their money and leave them to fend for themselves. Those allegations are contained in a lawsuit the Guzmans, of Oakland, Calif., filed Tuesday in Alameda County Superior Court. The Guzmans allege that they paid $3,800 for the South Carolina-based firm of J.K. Harris to represent them in an Internal Revenue Service “offer-in-compromise” process, the Argus of Oakland reported.
Community News

KPMG, Auditors Sanctioned by SEC, Agree to $10M Settlement

The Securities and Exchange Commission this week sanctioned KPMG LLP, two former KPMG partners, and a current partner and senior manager for engaging in improper professional conduct as auditors for Gemstar-TV Guide International, Inc. KPMG and the auditors agreed to settle the action without admitting or denying the SEC's findings. As part of the settlement, KPMG was censured and agreed to pay $10 million to harmed Gemstar shareholders. This represents the largest payment ever made by an accounting firm in an SEC action.

SEC Opens Formal Probe into Fannie Mae

The Securities and Exchange Commission is formally investigating allegations of accounting tricks by the mortgage giant Fannie Mae.In a disclosure filed with the SEC late Tuesday, Fannie Mae said the SEC “has initiated a formal order of investigation," Dow Jones Newswires reported.
Tax

Cross-Dressing IRS Agent Claims Vindictive Prosecution

A Pennsylvania cross-dresser is accusing his employer, the Internal Revenue Service, of singling him out for prosecution because of his extracurricular activities and his plans to have a sex-change operation, the Times Leader of Northeastern Pennsylvania reported. In 2002, a federal grand jury indicted Edward F. Snarski II, 53, of Wilkes-Barre, of mail fraud, bank fraud and misuse of a Social Security number, the Times Leader reported.Snarski, an IRS agent, is seeking dismissal of the charges, claiming the U.S.
Tax

Court Halts Colorado Couple's Tax Scheme, Arrests California Promoter

The Justice Department announced this week that a federal court has barred Charlene G. Chapin and her husband, Thomas S. Chapin, both of Denver, Colorado, from selling two tax schemes known as the "corporation sole" and "claim of right" programs.

CA's Texas Tycoon Investor Displeased with Settlement

A major investor in Computer Associates International Inc.

Rite Aid Scandal Earns Ex-Officer 10 Years in Jail

Rejecting arguments that a former Rite Aid Corp. officer should be spared jail time, a federal judge sentenced 76-year-old Franklin Brown to 10 years in prison, Reuters reported.
Community News

Washington State Sues E&Y Over Met Mortgage Woes

Washington's insurance commissioner is seeking millions of dollars from accounting firm Ernst & Young for its alleged neglect in overseeing finances at Metropolitan

Forensic Accounting: A Basic Guide to The Profession

By, Alan Zysman, B.Comm, CA·IFA, CFE - Forensic accounting has existed for many years. With the growing complexities of the business environment and the growing number of business related investigations, forensic accounting professionals are increasingly asked to assist in the investigation of financial and business related issues.What is Forensic Accounting? The integration of accounting, auditing and investigative skills yields the specialty known as forensic accounting.

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