Staff Writer and Editor AccountingWEB
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lunch beat

Bramwell's Lunch Beat: Accounting Fraud, ID Theft Bill, Trump’s Tax Plan

Sep 29th 2015
Staff Writer and Editor AccountingWEB
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Los Alamos National Bank pays $1.5 million to settle SEC charges
Los Alamos National Bank and its holding company Trinity Capital Corp. have agreed to pay $1.5 million to settle accounting fraud charges, the US Securities and Exchange Commission (SEC) announced on Monday, wrote Mark Oswald of the Albuquerque Journal. The SEC said an investigation found that Trinity “materially misstated” losses from loans and leases in filings during 2010, 2011, and 2012. “Trinity understated its reported 2011 net loss available to common shareholders by $30.5 million, reporting income of $4.9 million instead of a $25.6 million loss,” the SEC said. In settling, Los Alamos and Trinity didn't admit or deny wrongdoing. Five current or former executives also are charged in the case. The SEC's complaint filed in federal court alleges the fraud was directed by former longtime Los Alamos CEO Bill Enloe, former chief credit officer Jill Cook, and former senior lending officer Mark Pierce.

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SEC charges CPA, 4 others with insider trading
Five Florida residents – including two lawyers and an accountant – have agreed to pay a total of about $489,000 to settle SEC charges that they traded in Pharmasset shares based on inside information about a takeover bid, wrote Matthew Heller of CFO. According to the SEC, attorneys Robert L. Spallina and Donald R. Tescher and accountant Steven G. Rosen obtained the information from a member of Pharmasset's board whom they were advising on tax- and estate-planning matters. The three bought Pharmasset securities and Spallina also tipped off two friends – Thomas J. Palermo, a financial advisor at a brokerage firm, and Brian H. Markowitz, a securities trader and his next-door neighbor, the SEC said in a civil complaint. Following the announcement of Gilead's $11 billion takeover of Pharmasset in November 2011, the five defendants allegedly reaped more than $234,000 in illegal profits as Pharmasset stock rose by 84 percent.

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GOP lawmaker backs bill to combat identity theft
A House Republican wants to reduce identity theft by keeping Social Security numbers off many federal tax forms, wrote Cory Bennett of The Hill. Rep. Vern Buchanan (R-FL) has introduced the Taxpayer Identity Protection Act, which would let companies use an alternative to the Social Security number on the W-2 tax form, issued to every employee earning at least $600 a year. “This bipartisan, common-sense measure will protect Americans from identity fraud by limiting the use of Social Security numbers on the most popular tax forms, including the W-2,” said Buchanan, a member of the House Ways and Means Committee. These forms are valuable to fraudsters because they contain important sensitive information – such as Social Security numbers – that can be used to file fraudulent returns or commit a number of other types of identity theft.

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Trump plan highlights dubious assumption at heart of Republican tax proposals
Sahil Kapur and Michael C. Bender of Bloomberg wrote that Republican presidential frontrunner Donald Trump's tax plan, like many of the proposals put forth by his GOP rivals, contains a dubious assumption: that tax cuts will generate rapid economic growth. Trump's proposal is similar to the one Jeb Bush unveiled in early September. Both slash the top individual tax rate from 39.6 percent (Trump to 25 percent, Bush to 28 percent) and the corporate tax rate from 35 percent (Trump to 15 percent, Bush to 20 percent) and would eliminate the estate tax. Both provide the largest share of benefits to upper-income earners. To address the trillions of dollars in lost revenue, both Trump and Bush point to “dynamic scoring,” a method controversial among economists but popular with Republicans, that assumes tax breaks spur economic growth. While Bush assumes 4 percent growth under his plan, Trump said his plan could boost it as high as 6 percent.

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Quick Links

  • Britain consults on EU's accounting shake up (Reuters)
  • Taxes, drugs and commodities (Bloomberg View)
  • GOP's tax cutters keep their options open (Bloomberg View)
  • The man who talked Reagan into cutting taxes (Wall Street Journal)
  • Donald Trump: Tax reform for security and prosperity (Wall Street Journal)
  • Trump tax plan a triumph of showmanship over common sense (New York Times)
  • Jeb Bush: My tax proposal would deliver $2,000 to middle-class families (USA Today)
  • Carl Icahn is right on taxes, experts say (USA Today)
  • Schumer in talks with Ryan on major tax, infrastructure deal (Politico)
  • Nice firms finish last? Etsy tax woes shows why doing good is a drag (Fortune)

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