Watchdog | AccountingWEB



Small businesses found to be especially vulnerable to fraud

According to a report released by the Association of Certified Fraud Examiners (ACFE), U.S. organizations lose an estimated seven percent of their annual revenues to fraud – but the damage is the worst among small businesses. Among the fraud cases detailed for the survey, the median loss suffered by organizations with fewer than 100 employees was $200,000, higher than the median loss for larger organizations.

Former BDO Seidman partner pleads guilty in multi-million dollar tax shelter scheme

Michael Kerekes, a former principal and attorney at BDO Seidman, pleaded guilty to a tax shelter scheme that prosecutors allege helped wealthy investors stay wealthy by avoiding $200 million in taxes. The Chicago Tribune reported that Kerekes, who lives in Santa Monica, CA, said he knew what he was doing was against the law during the plea in Manhattan federal court. He is cooperating with an ongoing investigation of tax work performed by his former employer.

Bounty hunter Duane "Dog" Chapman hounded by the IRS

His accountant says it's all a matter of bad timing. Duane "Dog" Chapman is the owner of Dakine Bail Bonds in Honolulu, but is more well-known as the star of the A&E reality show, "Dog and the Bounty Hunter."According to tax liens filed at the Hawaii Bureau of Conveyances filed January 27, Chapman owes $2 million in unpaid taxes that go back as far as 2002. Not that he hasn't had his share of tax woes before...

Did golf pro Jim Thorpe slice the IRS?

Three years of unpaid taxes, from 2002, 2003, and 2004... that's the bunker Jim Thorpe finds himself stuck in. Charges were filed in an Orlando, Florida federal court accusing Thorpe of failing to pay federal taxes – amounting to $1.6 million - on income of more than $5.2 million earned during that three year period.The U.S. Attorney's office in Orlando told reporters that in addition to the $1.6 million in taxes due, Thorpe is looking at a $3.2 million fine, and a possible seven year jail term, for failing to file income tax returns and three counts of failing to pay taxes.

Castroneves court requests denied, tax trial will begin in March

Brazilian racecar driver Helio Castroneves was in court again in early February and yet another hearing will take place on February 16th. In the latest courtroom drama, Castroneves and his codefendants were hoping to derail the government's tax evasion case against them. Unfortunately for them, the federal judge wasn't buying their arguments, and the March 2nd trial will proceed as planned. Castroneves is accused of carrying out various schemes designed to evade the taxes on $5,550,000 in fees he earned for racing and for the use of his name in endorsements in 1999-2002.

Did Al Franken pay the $70,000 back taxes he owes? He's not telling

With Congress in the hands of the Democrats, we're all still waiting a final count in the close Minnesota race for the U.S. Senate seat between incumbent Norm Coleman and his challenger, Al Franken. Franken is a comedian and political commentator who travels the country making speeches and earning speaker fees. Last spring as the Senate race started to heat up... so did the news that Franken had unpaid taxes in 17 states, plus other problems.

For Daschle, it was a short drive from tax problems to political oblivion

The story is becoming sadly familiar. On January 2, 2009 Tom Daschle rushed to file amended tax returns for 2005, 2006, and 2007, and pay $128,203 in unpaid taxes plus $11,964 in interest. There was no mention of penalties. Why the rush? The 61-year-old former U.S. Senator from South Dakota was nominated to fill a post in the Obama cabinet, as the head of Health and Human Services as well as a newly created post, the head of the White House Office on Health Reform.

As the bailout goose lays her golden eggs, who is guarding the henhouse?

"A billion here and a billion there and pretty soon you're talking about real money." That's a great line, attributed to the late Senator Everett Dirksen. But with the bailout of 2008 signed by President Bush and now the trillion dollar-plus rescue package that Democrats in Congress and Barack Obama are proposing, those billions are starting to look like chump change. It doesn't take a scholar to know... that's a lot of money. As a result, many financial professionals are bracing themselves for what history tells them will be the other fallout.

KPMG case study brings real-world forensic accounting to UNM

University of New Mexico students in Rutledge Professor of Accounting Richard G. Brody's forensic accounting class came face-to-face with the real world last night thanks to a case study presented by KPMG.The case is designed to provide an introduction to the forensic accounting process, challenging student teams to analyze evidence as part of an earnings management investigation.

Georgia Southern students can concentrate their studies in fraud and forensic accounting

By Anne RosivachDemand for courses in fraud and forensic accounting has been strong and is growing at colleges and universities throughout the country. Georgia Southern University is no exception, and The College of Business Administration's Center for Forensic Studies in Accounting and Business has taken the lead by offering two educational tracks in fraud and forensic accounting to students at both the undergraduate and graduate level.

Auditors and airport screeners have similar blind spots

But terrorists don't pay the screenersBy Gary D. Zeune, CPAEven though the items and information are right in front of them, airport screeners miss banned items, according to a December 30, 2005, article in The Wall Street Journal. Auditors miss fraud for the same reasons screeners miss weapons. To test terrorism readiness, British authorities digitally inserted images of guns, knives and other banned objects into luggage. Initially the screeners' performance was mediocre. But with practice it improved dramatically.

Prevalence of corporate fraud and misconduct is high according to KPMG survey

KPMG's 2008-2009 Integrity Survey, the third in a periodic series that began in 2000, published by KPMG Forensic, concludes that little has changed in the frequency and pattern of corporate fraud and misconduct over the years. The survey found however, that "Ethics and compliance programs continue to have a favorable impact on employee perceptions across the board.

Post-Madoff, forensic accountants seeing increase in business

Investigators say that the number of people trying to pull off low-level Ponzi schemes is increasing so quickly that they are now calling them "mini-Madoffs."And forensic accountants believe their skills will be even more valuable in this climate, as jilted investors are asking tough questions about where their money went. Business owners and governments are also being cautious, watching their funds with more scrutiny than ever.

Geithner sworn in as new Treasury Secretary

In a decisive vote of 60 to 34, members of the U.S. Senate chose to ignore disclosures that Timothy Geithner might have been guilty of cheating on his taxes for four years, and gave him the nod as the next Secretary of the Treasury.From 2001 to 2004, Geithner worked at the International Monetary Fund (IMF) and received fees for services on which no Social Security and Medicare tax were withheld.

Did Obama's Treasury nominee, Tim Geithner, weave a tangled tax web?

Last November when then president-elect Barack Obama tapped Timothy Geithner to take the reins as Treasury Secretary, Geithner's confirmation seemed like a slam dunk. But that was before the Obama team started vetting the nominee to make sure there would be no surprises. Geithner has been hailed as a financial wizard after working in several Treasury positions under three different presidential administrations, nearly four years at the International Monetary Fund (IMF), and most recently, as president of the New York Federal Reserve Board.

Castroneves takes back seat to Will Power while awaiting tax trial

In a press conference Tuesday, January 13, Tim Cindric, president of Penske Racing, announced that racecar driver Helio Castroneves will be replaced in the #3 Penske Indy Car by Aussie driver Will Power. Castroneves is awaiting his tax evasion trial, scheduled to begin March 2, 2009.According to Cindric, Power "will be stepping into the number three car for at least the first part of the 2009 testing while Helio's court case is being settled."Cindric stated, "We have three drivers for 2009," referring to Power, fellow Aussie driver Ryan Briscoe, and Castroneves.

A look back at famous tax cheaters of 2008

For tax cheaters, 2008 was not a good year. Celebrities, sports figures, and other famous people who underestimate the IRS may wish they could have a do-over for some of their previous activities.

Avoid a fraud hangover this New Year

Fraud loves Christmas. Andrew Durant provides a checklist of actions for finance staff to undertake before and after the festive holiday that will help prevent fraud or spot something out of order.The Finance Director had been acting strangely for weeks - he said this was due to work pressures in the lead up to the year-end. He was due to return from the Christmas break in the first week of January but called in ill.

"Dividing the Estate" enlivens Broadway

In addition to making audiences laugh out loud, the revival of Horton Foote's Dividing the Estate takes a sharp look at family politics and economic interests that have played a role in our current economic outlook.Pulitzer Prize-winner Foote shows how tough economic times in the late 1980s are forcing a chatty Texas family to confront its past before it can prepare for its future. Southern matriarch Stella Gordon rules over the purse strings and dominates her family, which lives off the income earned from her estate.

Raffaello Follieri's fall from grace

Oh, how the mighty have fallen! As it turns out, Raffaello Follieri doesn't exactly qualify as "mighty," but to attain a lavish lifestyle and celebrity girlfriend -- Anne Hathaway -- he dropped some mighty big names... the biggest. His romance with Hathaway fell apart last summer shortly before she helped the FBI put together a case against Follieri that could've gotten him a prison sentence of 265 years.Here's what Follieri did, according to authorities. In 2003, he arrived in New York, claiming to have inside ties to the Vatican.


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