Ex-Grant Thornton partner gets 4-1/2 years for $4 million theft
Craig Haber, a partner at Grant Thornton from 1993 to 2012, was sentenced to four-and-a-half years in prison on Wednesday for stealing nearly $4 million from the accounting firm, Reutersreported.
Haber, who was a partner at Grant Thornton’s New York office, had pleaded guilty last August to a charge of mail fraud stemming from what prosecutors say was an eight-year scheme to divert client payments to a personal bank account. He was arrested in February 2013 on charges he stole nearly $4 million in client payments from the firm.
The judge ordered Haber to forfeit $3.97 million but said he would wait for further briefing before restitution, which could go as high as $4.31 million, according to the article.
[Click here for an article by our sister site, Going Concern, on Haber’s arrest in February 2013.]
BDO USA chief looks to grow through deals
BDO USA LLP, one of the midtier accounting firms below the Big Four, has been aggressively trying to grow faster under Chief Executive Wayne Berson, and it believes a flurry of acquisitions is the best way to do it, Michael Rapoport of the Wall Street Journalreported yesterday.
BDO has acquired seven firms since Berson became CEO in November 2012 – more than any other major accounting firm over the same period. And more deals are on the horizon.
BDO believes the strategy is helping the firm thrive in a competitive market, according to Rapoport. The firm’s string of acquisitions helped it add a net 57 audit clients in 2013, according to figures from consulting firm Audit Analytics – by far the most of any accounting firm, including the Big Four. By comparison, KPMG added a net five clients, and PwC, Deloitte, and Ernst & Young all had net client losses. McGladrey added eight clients; Grant Thornton lost 19.
“I don't understand why other firms aren't seeing it the same way,” Berson said in an interview with the Wall Street Journal. “What we are seeing is that M&A growth fuels organic growth.”
Ex-Credit Suisse banker Bachmann admits guilt in tax case
David Voreacos of Bloombergreported yesterday that Andreas Bachmann, a former banker at a Credit Suisse AG unit, pleaded guilty in federal court in Alexandria, Virginia, to helping American clients evade taxes, implicating his superiors as the bank faces a probe of how it helped US clients hide $4 billion in assets from the IRS.
“Bachmann, who is cooperating with prosecutors, said superiors at his unit condoned violations of US law and of a 2001 agreement that Credit Suisse reached with the IRS to withhold and pay taxes on US client accounts,” Voreacos wrote. “Bachmann said he once complained to the CEO of his subsidiary about the accord’s restrictions on activities in the United States.”
Credit Suisse is the largest of 14 Swiss banks under US criminal investigation in a crackdown on offshore tax evasion, the article stated. Bachmann’s plea follows a report by the Senate Permanent Subcommittee on Investigations saying Credit Suisse helped 22,000 Americans hide as much as $10 billion from the IRS.
For SEC, a much-needed win
The US Securities and Exchange Commission (SEC) has taken a number of hard knocks in the courtroom lately. Now a federal judge has handed the regulator a pat on the back that may embolden it to take more cases to trial, Ben Protess of the New York Timeswrote yesterday.
The judge on Wednesday ordered Fabrice Tourre, the former Goldman Sachs trader at the center of a troubled mortgage deal, to pay the SEC $825,000 in penalties and other costs. The sum fell just short of the roughly $1 million payout that the agency had requested, the article stated.
The SEC’s track record in other recent trials hasn’t been great: The agency has lost five of its last 12 trials.
“The ruling, a capstone to one of the SEC’s most prominent Wall Street cases and its first significant courtroom victory stemming from the financial crisis, was equal parts validation and leverage for an agency that has threatened harsher penalties and fewer settlements,” Protess wrote. “The case could signal to Wall Street employees, with all their legal resources, that the agency is willing to take them on and just might win.”
Democrats: Darrell Issa botched rules in run-up to IRS contempt vote
Rachael Bade of Politicoreported yesterday that two veteran House legal experts – Morton Rosenberg, a 35-year veteran of the Congressional Research Service, and Stan Brand, House counsel from 1976 to 1983 – say House Oversight Committee Chairman Darrell Issa (R-CA) botched his shot at holding former IRS official Lois Lerner in contempt of Congress by ignoring Supreme Court rules, according to Democrats.
In a legal brief of sorts sent by Oversight Democratic staff to House Speaker John Boehner (R-OH) on Wednesday night, Rosenberg and Brand said Issa was legally required but failed to present Lerner, who asserted her Fifth Amendment right at a high-profile hearing last week, with a “clear-cut choice” between answering the committee’s questions and risking contempt.
Rather, Issa said Lerner “may” be held in contempt if she didn’t answer questions, according to the article.
“Pointing to several 1950s Supreme Court cases that threw out similar congressional contempt votes, Rosenberg and Brand said Issa was required to overrule Lerner’s Fifth Amendment claim, and specifically order her to speak,” Bade wrote.
“This procedural hiccup, the duo said, is ‘fatal’ for the House’s looming contempt vote.”
IRS seeks volunteers for Taxpayer Advocacy Panel
The IRS is seeking civic-minded volunteers to serve on the Taxpayer Advocacy Panel (TAP), a federal advisory committee that listens to taxpayers, identifies major taxpayer concerns, and makes recommendations for improving IRS services. Applications for the TAP will be accepted through April 11.
The TAP provides a forum for taxpayers to raise concerns about IRS service and offer suggestions for improvement. The TAP reports annually to the Treasury secretary, the IRS commissioner, and the National Taxpayer Advocate.
The TAP includes members from all 50 states, the District of Columbia, and Puerto Rico. Each member is appointed to represent the interests of taxpayers in his or her geographic location, as well as taxpayers as a whole. The TAP is also seeking to include at least one additional member to represent international taxpayers.
The TAP is seeking members in the following locations: Alaska, Arizona, California, Delaware, Idaho, Indiana, Kansas, Kentucky, Massachusetts, Minnesota, Montana, Nevada, New Jersey, New York, Oregon, Pennsylvania, Utah, Vermont, Virginia, and International.
The panel needs alternates for the District of Columbia, Florida, Georgia, Illinois, Louisiana, Maryland, North Dakota, Puerto Rico, Rhode Island, South Carolina, and West Virginia.
For more information on the TAP, including how you can become a member, click here.
Wall St. counting days to Levin’s retirement
From his perch atop the Senate Permanent Subcommittee on Investigations, Senator Carl Levin (D-MI) has antagonized big finance by doggedly pursuing banks for bad behavior, such as laundering money for drug cartels or helping the wealthy hide money in offshore accounts.
To Levin, the subcommittee’s extensive reports and question-and-answer sessions were a chance to bring accountability to some of the world’s most powerful institutions, including Goldman Sachs, JPMorgan, and even Apple.
According to an article by Peter Schroeder and Bernie Becker of The Hill, Levin, who will retire at the end of 2014, has no qualms about taking financial giants to task if their bad behavior merits it.
“People who have done extremely well financially – when you go after some of the ways in which that’s been accomplished, they obviously are not thrilled about it,” Levin said, according to the article. “But that’s something which is part of the job.”
- Businesses sour on chances for new tax legislation (Wall Street Journal)
- Tax reform targets executive pay, but may raise salaries (Wall Street Journal)
- True tax reform (The Hill)
- The last time everyone gave up on tax reform, it actually happened (Forbes)
- House panel finally looking at Internet sales tax legislation (Don’t Mess With Taxes)
- Jobs, growth, and tax reform: Everybody’s hungry, and looking for a cook (TaxVox)