Watchdog

Tax

Report: Thousands of Unique Phishing Attacks Occurred in June

Tumbleweed Communications Corp. and the Anti-Phishing Working Group last week released the Phishing Attack Trends Report for June 2004, an analysis of phishing scam attacks submitted to http://www.antiphishing.org, the Internet's most comprehensive archive of email fraud and phishing attacks. Analysis of over 1,400 attacks reported in June shows that 92% of all attacks use forged from addresses.
Tax

Bristol-Myers to Pay $150M to Settle Accounting Fraud Charges

The SEC announced this week that it has filed an enforcement action against Bristol-Myers Squibb Company.
Technology

IRS Reissues Consumer Warning on Identity Theft Scheme

Earlier this week, the IRS renewed its warning about a fraudulent scheme targeting non-resident aliens who have income from a United States source. The IRS has seen signs the scheme is spreading in the Caribbean area.Caribbean countries in which this scheme has surfaced include Barbados, Puerto Rico, Tobago, Trinidad and the Turks & Caicos Islands. Earlier this year, the scheme appeared in South America and Europe.The scheme uses fictitious IRS correspondence and an altered IRS form in an attempt to trick the foreign persons into disclosing their personal and financial data.
A&A

Victims of ID Theft Applaud New Way to ‘Freeze’ Credit Reports

Bridget Thomas of Prairieville, Louisiana, lobbied for a way to block access to credit reports in her state after she was badly burned by identity theft that destroyed her credit status.A woman with the same name as Thomas, but a different middle initial, obtained her social security number and started spending.Lawmakers in Louisiana and a few other states, moved by stories like Thomas’, have instituted a privacy option called a security freeze.
Tax

Tough Prosecutors Changing Corporate Environment

The consequences of bad corporate behavior have never been so severe or so well-publicized.As yet another high-profile executive is led away in handcuffs on the nightly news, corporate officials are getting the point that fraud doesn’t pay.Justice Department officials and legal observers say the crackdown by the two-year-old Corporate Fraud Task Force combined with laws that hold the executives themselves liable for malfeasance have had a "significant deterrent effect," according to the Associated Press.The Justice Department says the task force has prosecuted more than 700 people a
Tax

Scandal-Ridden Parmalat Seeks Damages from Citigroup

Parmalat Finanziaria SpA has gone to court seeking damages from Citigroup Inc., which allegedly played "an integral part" in the Italian dairy giant’s collapse.The suit was filed Thursday in Bergen County Superior Court in New Jersey by Parmalat Chairman Enrico Bondi, who is trying to salvage the company from the billions in losses it sufffered in a massive fraud scandal. According to Bloomberg News, the complaint states that Citigroup structured the company’s financing so that debt was hidden and cash flow was falsely inflated.
Tax

Settlement Reached with Two Firms For Securities Violation

The U.S. Securities and Exchange Commission (SEC) and the New York Stock Exchange today announced the initiation and settlement of enforcement actions against two NYSE specialist firms. The firms will pay a total of $5.2 million in penalties and disgorgement, consisting of $1.7 million in civil money penalties and $3.5 million in disgorgement, and implement steps to improve their compliance procedures and systems. The two settling specialist firms are SIG Specialists, Inc. and Performance Specialist Group LLC.
Tax

Whistle-Blower Leads Increase Sharply During 2004

A sharp increase in whistle-blower complaints is on the rise according to the SEC, forensic accountants and corporate lawyers, USA Today reported. "There is increased whistle-blowing activity," said Harvey Kelly, a forensic accountant who heads fraud investigation at law firm Alix Partners.
Tax

Three Ex-Ahold Executives Charged with $700 Million Fraud

Three former executives of Royal Ahold NV’s U.S. unit have been charged with fraud conspiracy for exaggerating earnings by more than $800 million, Bloomberg reported.Michael Resnick, 42, former chief financial officer of the unit; Mark Kaiser, 47, ex-marketing manager; and William Carter, 43, a former vice president, were charged with a fraud conspiracy, Interim U.S. Attorney David Kelley said Tuesday."It was a cooking of the books fueled by the greed of the defendants," Kelley said at a press conference in Manhattan.
Tax

IRS Could Use More Help from Federal Agencies With Tax Violators

A federal investigation has revealed that tax violators are going unpunished because agencies aren’t sharing data with the Internal Revenue Service.The Government Accountability Office (GAO) has found that about 25 percent of the businesses that applied to hire immigrant workers since 1997 owed back taxes, failed to file tax returns or never registered with the IRS.According to the Washington Post, the Bureau of Citizenship and Immigration Services failed to verify financial data provided by businesses with the IRS.
A&A

More Automated Check Payments = More Scams

In what has been termed “the e-commerce equivalent of mugging,” scammers are targeting checking accounts as an easy access point for fraud.The huge number of automatic checking account withdrawals and deposits is opening the door to the increase in fraud.
Tax

President Bush Signs Identity Theft Bill into Law

On Thursday, President Bush signed into law, the Identity Theft Penalty Enhancement Act, creating stiffer criminal penalties for identity theft. The goal of this bill is to prevent identity theft by increasing the punishments associated with the crime and establishing a new crime of aggravated identity theft, which is the use of a stolen identity to commit certain criminal acts. Though solid numbers are hard to come by, identity fraud has been called one of the fastest-growing crimes in the U.S, touching millions of people at a cost of billions of dollars a year.
Tax

MCI Files Suit to Collect Close to $300M in Funds Loaned to Ebbers

In the heydays leading up to the collapse of WorldCom and other corporate entities, loaning money to top executives was a common practice. MCI Inc., formerly known as WorldCom, filed suit last week to recoup more than $300 million ousted chief executive Bernard J. Ebbers still owes the company.Ebbers borrowed $408 million from WorldCom after company stock he had pledged as collateral for personal loans lost value, the Wall Street Journal reported. When the stock no longer provided adequate collateral, Ebbers was going to have to sell stock to cover the loans.
Practice

SEC Charges Lay, Enron's Former Chairman and CEO, with Fraud & Insider Trading

The Securities and Exchange Commission today initiated civil charges against Kenneth L. Lay, former Chairman and Chief Executive Officer of Enron Corp., for his role in a wide-ranging scheme to defraud by falsifying Enron's publicly reported financial results and making false and misleading public representations about Enron's business performance and financial condition. The Commission also alleges Lay profited from the scheme to defraud by selling large amounts of Enron stock at prices that did not reflect its true value.
Community News

Lay Faces Charges He Conspired to Manipulate Enron Finances

Former Enron Chairman Kenneth Lay, who became a symbol of corporate greed but an elusive target for investigators, was indicted Wednesday by a federal grand jury for his part in allegedly manipulating financial statements to defraud investors.The Wall Street Journal, citing people familiar with the matter, reported that the criminal indictment is expected to be unsealed Thursday morning. The indictment is likely to include many charges, possibly lying to the public about Enron's financial condition, or hiding losses and creating reported earnings on financial statements.
Tax

Whistleblower Rules May Provide New Niche for Accountants

As public companies begin actively encouraging whistleblower complaints, accountants and consultants are offering products and services to gather the sensitive information and deal with it quickly.The new whistleblower provisions, required by the Sarbanes-Oxley Act, are providing another opportunity for accounting firms to help companies cope in the post-Enron environment.Under the corporate reform law, audit committees must allow employees to report accounting or auditing irregularities without fear of being identified.
Technology

Tips for Effective Internal Investigations

by Stuart R. Buttrick, Baker & DanielsEmployers are forced to defend themselves against large numbers of EEOC charges and lawsuits, many of which could be avoided by prompt and effective internal investigations. A primary goal of any human resource or EEO officer should be to have an effective mechanism for allowing work-related complaints to be resolved internally.
Tax

Five Rules to Detect and Avoid Phishing Scams

One of the more sinister and increasingly prevalent methods of identity theft is the practice of "spoofing" or "phishing," involving the sending of e-mails that mirror the appearance of a popular Web site or company in an attempt to commit identity theft.
Tax

Banc One Unit Agrees to Pay $50M to Settle SEC Fraud Charges

The Securities and Exchange Commission (SEC) announced on Tuesday a settled enforcement action against Banc One Investment Advisors Corporation (BOIA), a registered investment adviser based in Columbus, Ohio, and Mark A. Beeson, age 46, of Westerville, Ohio, former President and CEO of One Group Mutual Funds (One Group) and Senior Managing Director of BOIA.
Tax

SEC Settles Insider Trading Matter against Former FleetBoston Employee

The Commission announced that a Massachusetts federal court has entered a final judgment against Guillermo Garcia Simon, a former FleetBoston Financial Group employee residing in Buenes Aires, Argentina, in connection with his trading in the securities of FleetBoston in advance of the announcement of its acquisition by Bank of America Corporation. Under the terms of the final judgment, entered by consent, Simon was ordered to pay approximately $525,000 in disgorgement, interest, and a penalty.

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