Watchdog

Tax

IRS Hits AmeriDebt with $15 Million Claim

The Internal Revenue Service has filed a claim for $15 million against credit counseling firm AmeriDebt as part of a recent crackdown on allegedly not-for-profit debt management firms. The claim stems from the IRS's expectation that the firm will lose its tax-exempt status.
Tax

Charles Schwab Settles Mutual Fund Probe for $350K

On Tuesday, the Securities and Exchange Commission (SEC) announced that it has instituted settled enforcement proceedings against San Francisco-based broker-dealer Charles Schwab & Co., Inc. The Commission charged that Schwab allowed investment adviser customers to change mutual fund orders after the 4:00 p.m. Eastern time market close, creating the risk that such customers could unfairly capitalize on late-breaking news at the expense of other mutual fund investors.
Tax

Former Executive Joins Most Wanted List

Getting your picture on the wall in the post office is not usually a time for celebration. For Tomo Razmilovic, the disgraced former president and CEO of Symbol Technologies Inc., the Holtsville, NY bar code scanner company, it simply means he is in no hurry to return to his former home in the United States. "I still believe in the American judicial system," the 62-year-old Mr.
Community News

Identity Theft Perpetrator Pleads Guilty

A 35-year-old former help desk associate at Teledata Communications Inc. (TCI) has pleaded guilty in federal court to charges in what may be the largest identity theft case in U.S. history. New Yorker Philip Cummings appeared in federal court Tuesday to plea to wire fraud, fraud, and conspiracy charges in the case which reportedly bilked more than 30,000 victims out of more than $2.7 million.Cummings was employed at TCI during 1999 and 2000. TCI is a company that provides computer access to credit reports for banks and other financial institutions. During his employment with TCI, Mr.
Tax

Pimco Settles Fraud Charges for $50 Million

The Securities and Exchange Commission this week announced that PA Fund Management LLC (PAFM), PEA Capital LLC (PEA), and PA Distributors LLC (PAD) (collectively, the PIMCO Entities) agreed to a settlement of charges that they defrauded investors in the PIMCO Funds: Multi-Manager Series in connection with an undisclosed market timing arrangement. Under the settlement, the PIMCO Entities have been ordered to pay $50 million, consisting of $10 million in disgorgement and a civil penalty of $40 million.
Tax

Judge Allows Tax Shelter Suit Against Law Firm to Proceed

A federal judge has allowed an aggrieved tax shelter client to pursue a fraud lawsuit against Deutsche Bank AG and the law firm of Sidley Austin Brown & Wood.While the courts have thrown out similar suits against Sidley Austin and others, U.S. District Court Judge Shira A. Scheindlin has ruled that a Virginia telecommunications executive can pursue his lawsuit, although not in New York, the Wall Street Journal reported. Scheindlin said the allegations of malpractice, breach of contract and breach of fiduciary duty could be refiled in Virginia.
Tax

Former CEO Gets 9 Years in Prison, $3.5M Fine

A federal judge has ordered a former chief executive to pay $3.5 million and serve more than nine years in prison for his part in a scheme that plunged his company into bankruptcy in 2001. The former executive of National Environmental Services Co. (Nesco), Eddy Lynn Patterson, was convicted in December on 22 counts of conspiracy, fraud, tax evasion and making false statements on loan documents, the Associated Press reported. His September 1 sentencing called for a federal prison term of nine year and two months.
A&A

Former Invesco Executives Settle Market Timing Abuses

The Securities and Exchange Commission (SEC) announced this week settled enforcement actions against Timothy J. Miller, the former chief investment officer and a portfolio manager for Invesco Funds Group, Inc. (IFG); Thomas A. Kolbe, the former national sales manager of IFG; and Michael D. Legoski, a former assistant vice president in IFG's sales department. The Commission issued orders alleging that Miller, Kolbe and Legoski violated federal securities laws by facilitating widespread market timing trading in certain Invesco funds in contravention of those funds' public disclosures.
Tax

SEC Supports Extension on Statute of Limitations on Fraud Cases

The Securities and Exchange Commission has asked a U.S. federal appeals court to allow investors to sue companies for fraud even if the alleged violation took place after the statute of limitations had expired. Investors have been allowed to file lawsuits within one year of discovering fraudulent behavior and three years after the violation occurred. The Sarbanes-Oxley Act of 2002 changed those time limits to two years and five years, respectively. However, investors who have recently alleged fraud have done so even though the three-year limit had expired.
Tax

Inmate Accused of Filing Bogus Tax Returns in $73,000 Scam

Using a copy machine and correction fluid, an inmate at Missouri Eastern Correctional Center created 66 false tax returns that cost taxpayers more than $73,000, a federal indictment says.AdvertisementAccounting Department Policy Groups Offered By PolicySoftOver 200 accounting department
Tax

Crackdown on Internet Fraud Slams Spammers

Federal and state law enforcement agencies have teamed together in recent weeks to arrest or charge dozens of people with crimes related to online scams, the New York Times reported.Since Congress passed a law last year that calls for fines and prison sentences for those convicted of sending fake e-mails, efforts have multiplied to fight spammers. Some Internet abusers send millions of junk e-mail messages; others commit identity theft; some perpetrate credit card fraud and other financial crimes.
Tax

KPMG Tax Shelters Under Scrutiny Again

A series of e-mails dating from the mid-1990s to 2003 show that even after KPMG was ordered by the Internal Revenue Service to stop pushing tax shelters considered abusive, the Big Four firm continued to promote at least a dozen new similar shelters, the New York Times reported.New documents issued Monday by the Senate subcommittee looking into the abusive shelters, show that KPMG was continuing to develop tax shelters similar to those deemed abusive, but do not indicate whether the new tax shelters were ever actually sold, the Times reported.
Tax

Sex Addiction Drives Florida CPA to 'Moral and Ethical Bankruptcy'

Small businesses, elderly investors, a church group and the Palm Beach County Police Benevolent Association were among the victims of a scheme that paid for the sex addiction of a Broward County certified public accountant, the Sun-Sentinal reported.Thomas E. Sewell was sentenced Monday in Fort Lauderdale by U.S.
Tax

Former IRS Lawyers Suspended For Tax Shelter Case

The bar associations in Oregon and Arkansas have suspended the law licenses of two former Internal Revenue Service lawyers for two years, the New York Times reported.The state organizations' actions come after a federal court ruled last year that the two defrauded the courts to help the IRS prevail in 1,300 tax shelter cases, many of them involving airline pilots, the Times reported.Oregon suspended the license of W. Kenneth McWade and Arkansas suspended the license William A. Simms. In addition, the U.S.
Tax

Tips on Spotting Bogus Mutual Fund Web Sites

High-pressure e-mails and phony Internet addresses that tout bogus mutual fund Web sites are a problem that investors must learn how to deal with in advance if they are to avoid being stung by such a scam, according to Pax World Funds. Last week, Pax World Funds issued six "phishing tips" that mutual fund investors can use to spot and avoid fake mutual fund Web sites, including those that are promoted by what may at first appear to be legitimate e-mail messages.In June, Pax World Funds cooperated with the U.S.
Tax

IRS Files $1 Million Tax Lien Against Baseball Great, Pete Rose

Last week the IRS hit Pete Rose with a $1 Million federal tax lien, contending that the wannabe baseball Hall of Famer owes the money for tax years dating back to 1997, The Smoking Gun reported. The IRS lien was filed in Florida's Broward County courthouse. According to the report, Rose owes the IRS a total of $973,693.28 for years 1997, 1999, 2000, 2001, and 2002 (the lien notes that the IRS has "made a demand for payment of this liability, but it remains unpaid"). A tax lien covering 1998 was reportedly filed against Rose in California several years back.
A&A

Investor Scam; Con Artists Snaring Victims Across the Country

The Securities and Exchange Commission (SEC) this week issued an investor alert designed to warn Americans about a new scam sweeping the country-answering machine "wrong number" stock touts. Voice mail messages are appearing on home answering machines from coast to coast saying that the stock price of certain small, thinly traded companies will soon shoot up.
Tax

Janus Finalizes $226M Settlement on Fraud Charges

The Securities and Exchange Commission (SEC) announced on Wednesday a settled enforcement action against Janus Capital Management LLC (JCM), for entering into undisclosed market timing agreements with certain investors. The Commission ordered JCM to pay disgorgement of $50 million and civil penalties of $50 million, for a total payment of $100 million. JCM also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual-fund governance reforms.Stephen M.
Tax

Large Databases Can Mean Big-Time Fraud

Storing massive amounts of credit card information in one place proved to be a costly mistake for BJ's Wholesale Club Inc. earlier this year.Thousands of credit card numbers were stolen in what may have been the biggest retail fraud of its kind. Secret Service agents say the suspects arrested in the case may be connected to an international identity theft ring."There are some pretty heavy losses out there," Greg Smith, president of the Pennsylvania State Employees Credit Union, told the Associated Press.
Tax

Enron's Kenneth Lay Asks to Forgo Jury Trial

Update 8-12-04: According to a Washington Post reporter, a judge denied a September 14th trial start date and said that he would wait until additional motions were filed late in September or October.

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