INTRODUCTION
This paper is designed to examine a few ways in which people commit fraud. Specifically, it will look at a recent complaint filed by the Securities and Exchange Commission (“SEC”) with the United States District Court for the Central District of California (“CDCA”). The complaint alleges that five executive of iPayment (the “Company”), a New York City headquartered credit and debit card processor, defrauded iPayment of approximately $11.6 million. Their alleged actions defrauded the company of millions of dollars and, in turn, caused the Company to file multiple false reports with the SEC. The three ways the alleged fraud took place was through:
1. Expense reimbursements;
2. Kickbacks; and
3. Merchant fraud.
Note that unless otherwise
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Nasir Shakouri Shakouri was the former Senior Vice President of Sales and Marketing for the Company. He previously co-owned Vinmost Holdings LLC with Robert Torino. He violated sections of the Securities Act of 1933 (“Securities Act”) and the Securities Exchange Act of 1934 (“Exchange Act”). He also aided and abetted violations of multiple sections of both the Securities Act and the Exchange Act.
Robert Torino Torino held multiple executive positions with iPayment. Notable, he was the Company's Executive Vice President and Chief Operating Officer. As previously stated, he and Shakouri co-owned Vinmost Holdings LLC. He violated sections of the Securities Act and the Exchange Act . He also aided and abetted violations of multiple sections of both the Securities Act and the Exchange Act.
Bronson Quon Quon was iPayment's Vice President and Corporate Controller. He was one of the signatories for the Company's Form 10-K. He violated sections of the Securities Act and the Exchange Act . He also aided and abetted violations of multiple sections of both the Securities Act and the Exchange
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The schemes are estimated to have caused a loss of approximately $11.6 million. The scheme to defraud the company of millions of dollars is alleged to have started with Shakouri and Torino. They later recruited Quon, Hong, and Skaire and rewarded them with a portion of the misappropriated funds. All of the defendants conspired with others to defraud the Company through false employee expense reimbursements, receiving kickbacks from vendors, stealing Company portfolios, and creating fictitious sales representatives and paying the commissions. The quintet's schemes came to a halt in August 2012 when another Company executive revealed the scheme the then-Chief Executive Officer and Chief Financial Officer. The Company then had to correct and refile multiple Annual
John Jacob Jingleheimer Schmidt was a Harvard graduate, Founder of a hedge fund, CEO and portfolio manager of International Management Associates LLC. John Jacob Jingleheimer Schmidt swindles millions of dollars from his clients. IMA collapsed in 2006, when Jingleheimer Schmidt wrote bad checks to his client and investor NFL football players. John Jacob Jingleheimer Schmidt was charged with security fraud and money laundering. John Jacob Jingleheimer Schmidt was looking to served jail sentence of approximately 710 years when he grew a flower in his jail cell. (AJC News)
After being seized, CenTrust sold its deposits in June 1990, to Great Western Financial Corp., Beverly Hills, California. Mr. Paul, the former chairman and CEO of the failed CenTrust Savings Bank of Miami, was sentenced to 11 years in federal prison after being convicted in a jury trial of 68 fraud-related counts in US District Court in Miami involving the spectacular collapse of CenTrust at a cost of $1.7 billion to taxpayers, and for allegedly helping arrange the sham purchase of $25 million in CenTrust securities by Bank of Credit & Commerce International. The verdict followed a six-week trial. In all felony counts, most involving allegations that he siphoned $3.2 million from CenTrust and spent it on his 95-foot yacht, his homes in Miami, his luxuries, and elsewhere during the 1980s.
John Rigas started Adelphia Communcations in 1952 with the help of two partners, but soon bought it out. The company was taken public in 1986 and as a result would have to abide by the regulations of the SEC. By the early 2000s, Adelphia was one of the top cable companies in the United States. This was the peak of a corporation that would begin a downward spiral over the first half of 2002 as a result of fraudulent use of the company’s assets at its’ shareholders expense. Members of the Rigas family drove the company to bankruptcy through rampant spending of company funds on personal expenditures (Barlaup, 2009). These expenditures included the likes of gross misuse of the company’s aircraft for personal trips by members of the Rigas family and the construction of a personal golf course on the family’s private land (Markon, 2002). This was accomplished after careful manipulation of the company’s reported numbers and fabrication of transactions within the company. Co-borrowing and self-dealing were commonplace in this time period that resulted in over 2 billion dollars’ worth of debt. All this was done under the nose of shareholders and culminated in an insurmountable debt that would lead the company to bankruptcy and to the imprisonment of multiple members of the Rigas family (Barlaup, 2009).
March 20, 2003, Richard Scrushy, the former chief executive officer of HeathSouth Corporation, was charged by the Securities and Exchang...
Ulinski, Michael. "AN ANALYSIS OF SMALL COMPANY FRAUDS AND." American Society of Behavioral Society. Dept of Business, Pace University. 05 Feb. 2008.
In conclusion, Barry Minkow was a thief from the beginning well before the incorporation of ZZZZ Best. He committed security fraud and left many investors without any money. He was a conniving thief since he was 16, and founded the business. He never conducted business in a legit matter. He ignored customer complaints, wrote bad checks and created false insurance contracts. The false insurance contracts were made up to have a paper trail of his revenues and profits. Barry had one motive and that was to make money by any means necessary. Everything that he portrayed about the business was false and in violation of several laws. He violated Generally Accepted Accounting Principles and Auditing standards. Barry should have been punished to the fullest extent of the law. He robbed his own friends for personal gain.
The case study Chris and Alison Weston describes how Chris and Alison committed mail fraud. The case is recorded from their recollection of events in an interview style format. Chris enlisted his wife Alison to set up a business that would provide the company with research services and identifying potential possible candidates for open positions at the company Chris worked. The Westons then started to overbill Alison’s business with each invoice. According to Chris, he saw opportunities with what he was doing, but he did not see the risks involved.
Stewart was convicted of conspiracy, perjury and obstruction of justice in 2001, and for using insider information to sell shares of the company ImClone Systems. This type of fraud damages the confidence of investors, it makes them perceive the lack of equality.
Paul, Weiss, Rifkind, Wharton & Garrison (Paul, Weiss) and Skadden, Arps, Slate, Meagher & Flom (Skadden Arps) represented Chinese technology giants Tencent and JD.com Inc, respectively, on their $863 million investment in apparel platform Vipshop, which turned to Latham & Watkins for advice.
Stewart did afterward was illegal. She lied about knowing the fact that the Waksal family was selling their shares and falsified the phone message log before having second thoughts and had her assistance restored the original message. Furthermore, she jointly collaborated an untruthful story with her broker to indicate that there was a stop order to sell the stock at $60 per share (SEC, 2003).
Weld, L. G., Bergevin, P. M., & Magrath, L. (2004). Anatomy of a financial fraud. The CPA
This project will look at two specific corporate collapses in the U.S. resulting from the Bernie Madoff Ponzie Scheme of 2008 and the Le-Nature Soda Company Pyramid-Ponzie Scandal of 2006. The diverse nature of these organizations (one dealing in financial investments and the other in product manufacturing), yet both their abilities to successfully operate Ponzi schemes , is the primary reason for their selection in this project. This report highlights the accounting and non-accounting frauds conducted within these organizations and analyses the reasons for their collapse.
The principle territory we are planning to address is accounting fraud and how it could impact an organization by answering, the who, what, when and how. Its goal is to increase the awareness of accounting fraud and fraud counteraction. The intriguing thing about accounting fraud is that little disclosure as a rule usually leads to an enormous increase in fraud. A number of categories and sub-categories can be divided up for fraud.
In 1995 The Bayou Hedge Fund Group, referred to as the fund, was founded by Samuel Israel III in Stamford, Connecticut with the intention to produce high returns for investors. Good intentions were not enough when the fund began to experience losses almost immediately and Mr. Israel resorted to fraudulent activities to keep the appearance of success alive. The resulting life of the fund was filled will illegal, fraudulent, and unethical activities that finally brought the fund to bankruptcy and landed Mr. Israel and some of his key associates in prison. The objective of this paper is to overview the history of the case and to highlight some of the major issues that should have alerted investors and other outside parties to the wrongdoings being perpetrated.
One may ask, how is that different from the “Enron” scandal? There isn’t much to separate these two, it could be said that they are cousins. They both managed to cover their debts by overstating their revenue and profits and using other companies they owned to make profit or at least attempted to, but ultimately drowning in debt and committing fraud. What makes these two companies different would be the cooperation of the executives with the prosecutors or officials, which goes back to why Andrew Fastow only faced 10 years because he took a plea deal. On the other hand I believe 25 years for conspiracy, misrepresentation of statements and 7 counts filing false statements was well deserved because not only did that make a statement to the public, but in the eyes of the law Ebbers should have learnt from “Enron’s”