Watchdog

Practice

Executives Will ‘Never be Above the Law’

About two years ago it began and now the names Enron, WorldCom, Tyco, HealthSouth and Adelphia Communications are among those associated with scandal.
Tax

WorldCom’s Ebbers Indicted on Federal Charges

Former WorldCom chief executive Bernard Ebbers was indicted yesterday on federal charges, including securities fraud, conspiracy to commit securities fraud, and making false filings with the Securities and Exchange Commission. In a surprise move, the company’s former chief financial officer Scott Sullivan pleaded guilty and agreed to cooperate with prosecutors.The 31-page Ebbers indictment was filed in U.S. District Court in Manhattan and was announced by U.S.
Tax

IRS Updates 'Dirty Dozen' Scams for 2004

In an update of an annual consumer alert, the Internal Revenue Service urged taxpayers to avoid falling victim to one of the “Dirty Dozen” tax scams and a variety of other schemes. In the new 2004 ranking, several new scams have reached the top of the consumer watch list, including abusive trusts and the “claim of right” doctrine.In addition, the IRS has taken a new step this year and issued 10 new pieces of legal guidance involving scams in the “Dirty Dozen” and other tax schemes.
Tax

Federal Prosecutors Issue Subpoenas in Coke Fraud Case

The Coca-Cola Co.
Community News

Crowe Chizek Institutes Forensic Services & Investigations Practice

Occupational fraud is one of the most prevalent and costly problems faced by today's business community. According to the National White Collar Crime Center, it is estimated that losses due to employee theft can range from $20 to $90 billion annually, with as many as three-quarters of all employees stealing from their employers at least once. In its most recent "Report to the Nation," the Association of Certified Fraud Examiners estimated that fraud would impact the American economy by approximately $600 billion in 2002.
Tax

Prisoner Receives $215,000 Refund from IRS

Any law-abiding, tax-paying citizen might be delighted, if not shocked, to receive a $215,000 tax refund from the Internal Revenue Service, but it seems like an awful lot for a prisoner to get. John Wesley Sarpy pleaded guilty earlier this month to filing a false claim when he sent in a tax return from prison, claiming $213,000 refund after showing 2001 earnings of $987,219 and tax withholdings totaling $576,495.
Tax

SEC Files Civil Fraud Case Against Columbia Management Advisors, Inc.

The Securities and Exchange Commission filed a civil fraud action this week in federal court in Boston alleging that Columbia Management Advisors, Inc. and Columbia Funds Distributor Inc. allowed certain preferred mutual fund customers to engage in short-term and excessive trading, while at the same time representing publicly that it prohibited such trading. Columbia Management Advisors, Inc.
Tax

IASB Issues Standard on Share-based Payment

The International Accounting Standards Board (IASB) last week issued International Financial Reporting Standard 2 Share-based Payment (IFRS 2) on accounting for share-based payment transactions, including grants of share options to employees. Recent events have emphasised the importance of high quality financial statements that provide neutral, transparent and comparable information to help users make economic decisions.
Tax

Enron's Skilling Indicted for Fraud, Pleads Not Guilty

Former Enron chief executive Jeffrey Skilling surrendered to the FBI in Houston Thursday, accused of fraud, insider trading and lying about the company’s finances in a 42-count criminal indictment.Skilling, 50, is the highest ranking former executive to be charged in the implosion of the once-formidable energy giant. After surrendering, Skilling was taken in handcuffs to the federal courthouse, where an arraignment hearing was held.
Tax

Tax Me If You Can, Airs February 19; Investigates Abuse of Tax Shelters

It was one of corporate America's biggest hidden profit centers in the past decade -- the tax shelter -- and it became so lucrative that last year it helped major U.S. companies cut their tax rate to just half of what they had historically paid, leaving individual taxpayers to make up the difference. The General Accounting Office estimates that illegitimate tax shelters cost the government more than $85 billion in recent years.
Tax

SEC Charges Enron's Skilling With Fraud, Seeks Disgorgement of all ill-gotten Gains

The Securities and Exchange Commission announced on Thursday of this week that it has charged Jeffrey K. Skilling, Enron Corp.'s former President, Chief Executive Officer and Chief Operating Officer, with violating, and aiding and abetting violations of, the antifraud, lying to auditors, periodic reporting, books and records, and internal controls provisions of the federal securities laws. The charges, which amend the Commission's Complaint filed against Richard A. Causey, Enron's former Chief Accounting Officer, in U.S.
Tax

Jailed Parmalat Founder's Children Among New Arrests

Italian police on Tuesday arrested the son and a daughter of jailed Parmalat founder Calisto Tanzi in a widening probe into Europe’s largest white-collar crime.Stefano Tanzi, president of the soccer club owned by Parmalat, also sat on the board of Parmalat Finanziaria, the holding company of the failed food group. Stefano's elder sister, Francesca Tanzi, headed the Tanzi family's tourism business Parmatour.
Tax

Sham Site's a Scam: There Is No 'National Do Not E-mail Registry'

Have you submitted your e-mail address to a "National Do Not E-mail Registry" that promises to reduce the amount of spam (unsolicited e-mail) you receive? If so, you are the victim of a scam, according to the Federal Trade Commission, the nation’s consumer protection agency.The Web site at "unsub.us" mimics the language, look, and navigation of the Web site for the National Do Not Call Registry, a legitimate free service of the federal government. The unsub.us site is not run or authorized by the FTC.
Tax

Most Companies Get an 'F' in Fraud Prevention

Enron had a code of conduct. Enron had a hotline. And in the end, Enron had fraud. Today, companies operate with a false sense of security because they either don't have a fraud prevention program or the program they have is a legal, yet ineffective "fig leaf." "One key to fraud prevention is to create an atmosphere where employees feel confident in reporting wrongdoing without being victimized, even if executives appear to be involved," explains Toby Bishop, president & CEO of the Association of Certified Fraud Examiners (ACFE), the largest anti-fraud association in the world.
Tax

Criminal Charges Against Enron’s Skilling Expected Soon

A criminal indictment against former Enron chief executive Jeffrey Skilling is expected to be handed up sometime this month, sources close to the case say.Two sources, who spoke to the Houston Chronicle last week on condition of anonymity, said federal prosecutors were finalizing criminal charges against Skilling. Specific charges were not known, but the sources said that the Department of Justice investigation has heated up in recent weeks and that information provided by former finance chief Andrew S.
A&A

IRS Highlights Information to Combat Retirement Plan Tax Shelter Schemes

As part of its effort to combat abusive tax shelter schemes and transactions, the IRS launched a new section on IRS.gov containing important information about abusive schemes involving employee retirement plans.
Tax

FTC Hotline to Assist Small Business Recovery from Web Scam

The Federal Trade Commission has launched a consumer hotline to assist alleged victims of a Web cramming scam operated by Miami-based Epixtar Corporation and several of its subsidiaries, including one formerly known as SBA Online, Inc.
Tax

Helpful Hints When Choosing a Return Preparer: How to Avoid Fraud

Return Preparer Fraud generally involves the preparation and filing of false income tax returns by preparers who claim inflated personal or business expenses, false deductions, unallowable credits or excessive exemptions on returns prepared for their clients. Preparers may also manipulate income figures to obtain fraudulent tax credits, such as the Earned Income Tax Credit.In some situations, the client (taxpayer) may not have knowledge of the false expenses, deductions, exemptions and/or credits shown on their tax returns.
Tax

Proposed SEC Budget Would Increase Funding by 13 Percent

President Bush’s budget for next year mirrors the headlines of the day in that only Defense, Homeland Security and the Securities and Exchange Commission would see any significant increase in their budgets.The SEC has seen its workload expand significantly over the last year as it has taken civil action in cases related to Enron and WorldCom as well as conflicts of interest in a number of investment companies and trading irregularities/marketing issues in mutual funds, the Associated Press reported.
Education & Careers

Does Corporate America Need CPOs?

First there was the chief executive officer and the chief financial officer. With scandals and fraud came the advent of the chief accountability officer and the chief ethics, knowledge, regulatory and disclosure officers, to name a few. Technology brought us the chief information officer.

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