Watchdog

Tax

SEC Files Fraud Charges Against Hollinger, Inc. & CEO, Conrad Black

The Securities and Exchange Commission announced on Monday that it has filed an enforcement action against Hollinger International's former Chairman and CEO Conrad M. Black, former Deputy Chairman and COO F. David Radler, and Hollinger, Inc., a Canadian public holding company controlled by Black. The Commission's complaint alleges that from approximately 1999 through 2003, Black, Radler and Hollinger Inc. engaged in a fraudulent and deceptive scheme to divert cash and assets from Hollinger International, Inc., a U. S.
Tax

GAO: Governments Could Do More to Reduce Identity Theft

While the use of Social Security numbers (SSN) can be very beneficial to the public sector, SSNs are also a key piece of information used for committing identity crimes. The widespread use of SSNs by both the public and private sectors and their display in public records have raised concern over how SSNs might be misused and how they should be protected.
Tax

Senators Press for SEC Enforcement of Whistle-blower Law

Two senators are ratcheting up pressure on the Securities and Exchange Commission to enforce a tough whistle-blower law. With a government finding that a publicly traded company retaliated against a whistle-blower, Iowa Republican Charles Grassley and Vermont Democrat Patrick Leahy asked for “aggressive enforcement” in a letter last week to SEC Chairman William H. Donaldson, the Associated Press reported. Donaldson was also asked for details of the agency's enforcement plans.
Tax

IRS and Puerto Rico Announce Partnership to Fight Abusive Transactions

The Internal Revenue Service and Puerto Rico Department of the Treasury, the Hacienda, this week announced a new partnership to fight abusive tax avoidance transactions.The partnership is the latest development in an effort unveiled in September 2003 to enable federal, state and commonwealth tax agencies to join together in ensuring all taxpayers fulfill their obligations under the tax code. Puerto Rico joins 48 states, the District of Columbia, New York City and the Virgin Islands on the list of tax agencies that have signed partnership agreements with the IRS.
Tax

U.S. Court Freezes $500M In Probe of Doctors' Tax Shelter

Eileen J. O'Connor, Assistant Attorney General for the Tax Division of the Department of Justice, and Carol C.
Tax

Spyware Infiltration Rises in Corporate Networks

Corporations are experiencing a steady infiltration of spyware into enterprise networks, but only a small number have deployed an enterprise-class solution to combat the threat, according to a new survey conducted by Equation Research. The survey, which canvassed more than 275 IT managers and executives nationwide, found that even as IT organizations spend more time fighting spyware, very few corporations are deploying corporate solutions against the growing threat.
Tax

McDonough Predicts Some Won't Meet Reporting Deadline

Companies need to be prepared for how they will tell investors about internal control weaknesses uncovered by ongoing reviews mandated by Sarbanes-Oxley, said William McDonough, chairman of the Public Company Accounting Oversight Board (PCAOB).Investors.com reported on a speech McDonough gave last week to the Securities Industry Association. The PCAOB was created by the Sarbanes-Oxley Act of 2002, passed to reform corporate governance in the wake of numerous accounting scandals.
Tax

Justice Dept. Seeks Injunction Against Promoter of Fraudulent Tax Scheme

The Justice Department recently announced that it has sued a Cincinnati-area man in federal court, seeking to halt an allegedly fraudulent tax scheme. The lawsuit alleges that Richard W. Standring, of Batavia, Ohio, gives seminars at which he falsely claims that he can help customers “decode” IRS records to help them establish that they need not file federal income tax returns or pay federal income taxes.
Tax

Defendants Convicted in First Enron Trial

The government has secured all-important convictions against the first group of Enron defendants, signaling that juries have had enough of corporate malfeasance, the New York Times reported.Convicted Wednesday in a Houston federal court were four former Merrill Lynch executives and a former Enron official, who were found guilty of conspiring to help Enron report false profits.
Tax

Fraud Detection is not Just by the Numbers

By Francis C. Brulenski, CPA, and Ricardo J. Zayas, CPA, CFE, CVA. Reprinted with permission from the Pennsylvania CPA Journal, a publication of the Pennsylvania Institute of Certified Public Accountants." Audit professionals should, by now, be knowledgeable of Statement on Auditing Standards (SAS) No. 99, Consideration of Fraud in a Financial Statement Audit. Professional standards mainly focus on fraud detection procedures, but beyond this, the standards available for the auditor to consider once fraud has been detected are limited.
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.
Tax

Atlanta Businessman Convicted for Tax Fraud Conspiracy

An Atlanta businessman has pleaded guilty to conspiring to defraud the IRS, a felony, announced Daniel G. Bogden, United States Attorney for the District of Nevada, Eileen J. O’Connor, Assistant Attorney General for the Department of Justice Tax Division, and Nancy Jardini, Chief of Internal Revenue Service Criminal Investigation. Robert F. Holliday, entered his guilty plea late late week afternoon before United States District Judge David W. Hagen.
Tax

IRS Highlights Examples of Abusive Return Preparer Investigations

The following examples of Abusive Return Preparer Fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.Tax Preparer Sentenced for Tax Fraud and Worker’s Compensation FraudOn September 20, 2004, in Greenbelt, MD, John A. Williams was sentenced to 40 months in prison, followed by three years of supervised release and ordered to pay $144,443 in restitution after a jury convicted him for worker’s compensation fraud and aiding and assisting in the preparation of false tax returns.
Tax

‘Renaissance, The Tax People’ Promoters Indicted for $84M Tax Fraud

Michael Craig Cooper, founder of Renaissance, The Tax People, Inc. was arrested late Tuesday crossing the border from Mexico to the U.S. near Laredo, Texas. On August 13 of this year, a federal grand jury returned a 148-count indictment charging Mr. Cooper, together with Jesse Ayala Cota, Todd Eugene Strand, Daniel Joel Gleason, and Renaissance, The Tax People Inc. ("Renaissance") with conspiracy to defraud the United States by impeding the IRS and to commit mail and wire fraud, willfully assisting in the preparation of fraudulent federal income tax returns; mail fraud and wire fraud.
Community News

HealthSouth's Scrushy Begins New Career: Religious Talk Show Host

While preparing for a criminal trial due to begin in January, ousted HealthSouth CEO Richard Scrushy has apparently added a new member to his legal team: Jesus, USA Today reported.Scrushy, 52, who stands accused of orchestrating a $2.7 billion fraud at the medical services company he founded in 1984, has been hosting a half-hour religious talk show every weekday morning since March with his wife Leslie.The show, called Viewpoint, is supported by the Guiding Light Church, an African-American oriented ministry Scrushy joined last year after attending church for years in his upscale suburb
Tax

IRS Warns: Check Carefully Before Applying for Offers in Compromise

The Internal Revenue Service this week issued a consumer alert advising taxpayers to beware of promoters’ claims that tax debts can be settled for “pennies on the dollar” through the Offer in Compromise Program.Such promoters make money by inappropriately advising indebted taxpayers to file an application for an offer in compromise with the IRS, promising unrealistic results, even when the taxpayers do not meet the requirements of the program.
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

SEC Charges Qwest with Multi-Faceted Accounting & Financial Reporting Fraud

Qwest Agrees to Anti-Fraud Injunction, $250 Million Penalty, and Will Permanently Maintain Chief Compliance Officer Reporting to the Outside Directors of the Board. On Thursday, The Securities and Exchange Commission charged Qwest Communications International Inc., one of the largest
Tax

WorldCom Whistleblower to be Inducted Into Hall of Fame for CPAs

Cynthia Cooper, the former vice president of internal audit at WorldCom who exposed the largest corporate fraud in U.S. history, will lead the list of three new inductees into the 2004 American Institute of Certified Public Accountants. (AICPA) Business & Industry Hall of Fame, an annual event sponsored by Ajilon Finance, a leading accounting and financial staffing services company. Cynthia Cooper’s name became synonymous with integrity when she exposed the fraud at WorldCom – to date the largest corporate fraud in history. At the time, Ms.

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