Sommet Group Fraud May 18, 2007 had to be one of Brian Whitfield’s greatest moments of his life. A news conference held that day by the NHL’s Nashville Predators declared the name for the stadium as the Sommet Center (Brumley, 2007). Sommet (pronounced So-may) also happened to be Whitfield’s growing business. Whitfield was also a huge Predators fan, as he mentioned in a 2007 interview with the Nashville Business Journal, citing the Predators as on his three passions in life, along with spending time with family and traveling to new places. Sommet was making an impact on the growing field of small businesses outsourcing their non-revenue generating business functions such as human resources administration, payroll processing, insurance and …show more content…
His wife and Ed’s daughter, Marsha Whitfield, also played a part in the company as the Vice President in charge of Sommet’s payroll division. Brian’s background was varied with Bachelor’s in Psychology, but he was an entrepreneur at heart. He had started companies in fields as diverse as genetic testing and web based e-learning, but along he got into the staffing business, with a friend of his. Eventually this led to the formation of Summit, which wouldn’t only concentrate on small business staffing needs, but also on other nonrevenue activities, including …show more content…
Payroll fraud is sometimes overlooked, but that shouldn’t be the case. According to a 2014 report by the Association of Certified Fraud Examiners (ACFE), payroll fraud is the top source of accounting fraud and employee theft, occurring in 27% of all businesses (Ernst, 2015). When thinking of types of payroll fraud, the outsourced payroll service providers (PSP) aren’t always what comes to mind. company doesn’t always get discussed. Instead, the discussion of payroll fraud is typically that of an employee for the organization, Yet, similar frauds, including ghost employees can occur with
I believe that asset misappropriation by accounts payable fraud is occurring at Wayland Manufacturing Company due to a lack of proper internal controls. Making the company’s Chief Accountant responsible for additional day-to-day functions provides him with opportunity to commit by creating fictitious vendors with his information and then creating fictitious invoices. Newbaker can then conceal his fraud by approving the invoices for payment. Employees working at an organization for more than five years are more likely to commit fraud. Therefore, Newbaker’s six-year history with the company has made him trustworthy and very knowledgeable, which could indicate involvement in asset misappropriation. The high employee turnover could represent a past fraudster leaving before getting caught or employees refusing to continue with the asset misappropriation. In addition, the varying monthly accounts payable transactions ranging from the lowest being April 2014 and
With the economy beginning to rebound, many companies are looking for every way possible to save money and/or maximize profits. One of the biggest costs incurred by any business is labor. Consequently, employers sometimes attempt to minimize this expense by utilizing independent contractors instead of employees. There are potential risks for employers who mischaracterize an employee as an independent contractor, because, while it may save payroll taxes and other benefit costs in the short term, it may lead to penalties on such taxes as well as other inadvertent violations of worker’s compensation laws, FMLA, etc, which each hold separate penalties for violation.
Imagine having to clock out mid-shift to prevent getting paid overtime, but not leaving for another hour or two. Having to punch out for a break but work through it, or having a paid vacation taken away as if it never existed? Situations relative to these are reality and are classified as wage theft, defined by the wage theft website as “a variety of infractions that occur when workers do not receive their legally or contractually promised wages” (Wage Theft). The public is generally uneducated about the concept of wage theft and the effects it has on our society, let alone what can be done about it. The Wage Theft Prevention Act, an act established in 2011 by the state of New York, provides laws protecting working citizens, and is an act that should be effective nationwide.
Fraudulent activities within a company can lead to its downfall and prosecution of those responsible for said fraud. More than 80% of fraud committed within an organization occurred within accounting, operations, sales, executive or senior management, customer service or purchasing according to an Association of Certified Fraud Examiners (ACFE) 2010 survey (Association of certified Fraud Examiners, 2010). In the case of Phar-Mor, the fraud was initiated by the Chief Operating Officer (COO), Mickey Monus, and supported by the Chief Financial Officer (CFO), Patrick Finn in response to declining profits of the company.
The idea to build a domed sports venue in Toronto came after a driving rainstorm during the Grey Cup Football game of November 1982. The media nicknamed the game “the Rain Bowl.” (CITE 2) The rain forced thousands of fans to move from their uncovered seats to instead watch the game from the concession stands. Making matters worse, the aging Exhibition stadium also suffered from overflowing washrooms. Politicians, including the Premier of Ontario, were among the fans attending the drenched Grey Cup game held at the outdoor stadium. Paul Godfrey, then Metro Chairman, said the words, “Never again.” (CITEZ) The game attracted close to 8 million televisio...
In July 1996, Alert J.Dunlap (also known as Chainsaw Al)was hired as CEO and Chairman by Sunbeams' board of directors to help the company from a period of lagging sales and profits and make it an attractive acquisition target.
One of the most recent white-collar crime involved Wells Fargo, a banking and financial services provider. In 2016 San-Francisco based bank Wells Fargo (WFC) employees secretly created millions of unauthorized bank and credit card accounts without permission of their customers. Opening about 1.5 million fraudulent deposit accounts and submitting 565,443 credit card applications allowed Wells Fargo employees to boost their sales targets and receive bonuses. Consequently, customers were wrongly charged fees for accounts they did not know existed. In this business crime scenario, Wells Fargo involved to pay $185 million in fines and refund $5 million to affected customers. Also, around 5,300
Wall Street's demand for high growth motivated Peregrine Systems' executives, to fraudulently inflate revenues and stock prices. According to the SEC, "Peregrine filed materially incorrect financial statements with the commission for 11 consecutive quarters." Steven Spitzer, a member of Peregrine's sales team admitted to meeting regularly with senior management near the end of the quarter to determine how much revenue was needed to exceed Wall Street's expectations. The primary fraud committed by Peregrine was done by inflating revenue by booking revenue when sales never occurred. By recognizing revenue from sales that never occurred, the accounts receivable balance and net income were fraudulently overstated; the accounts receivable would never be collected, because the merchandise was never sold. To cover up their high, outstanding, accounts receivable balance as a result of booking sales that did not occur, Peregrine fraudulently engaged in financial agreements with banks.
In 1992 Sears Auto center was charge with fraud by California consumer protection. They were accused of setting quota to their employee to sale a certain number of product or services during their 8-hour work shift. This caused an overcharge that was about $233.00 a car. Auto-repair shops chairman Edward A. Brennan, stated that the incentive compensation program and sales goals created an environment where mistakes occurred but Sear never admitted to any wrongdoing took place. Eventually there were penalties faced, 72 of Sears California auto department was put on three years probation.
One of the most recent stories involving white-collar crimes in the United States involves the Wells Fargo. Wells Fargo is banking and a financial institution that offers financial services to very many people in the United States as well as around the world. As reported by the Washington Post, Wells Fargo as banking and a financial institution was involved defrauding its customers millions of dollars through their employees. It was reported that the employees were involved in the opening of close to 2 million bank accounts with Wells Fargo and proceeded to offer credit cards towards the same as a way of attracting the huge bonuses that were being offered (Merle, 2017). The white-collar crime perpetuated by Wells Fargo falls under the Corporate
Wells Fargo set an unattainable goal for their employees and this caused that most of them enrolled in unpractical procedures in order to achieve the target that was set. in order to do that, employees used every resource they had and ended up creating fake paperwork and opening
In the United States a charitable foundation is an organization which has formalized the process of relieving poverty, advancing education, supporting disaster relief, and/or assisting with community projects. Charities are non-profit organizations which can take the form of either a non-operating private foundation (trusts) or operating foundation (public charities). When many of us hear of a tragic event that hits close to home, we give our support with an open heart in order to help others in need. Unfortunately, with this act of kindness we could be creating an environment that is highly vulnerable for fraud perpetrators and fake charity scams.
Friedman, S.. (2009, April). Tough Times Prompt Spike In Employee Theft, Chubb Warns. National Underwriter. P & C, 113(16), 10. Retrieved October 14, 2010, from ABI/INFORM Global. (Document ID: 1709736101).
The following memorandum written by a director of a security and safety consulting service discusses a critical issue effecting business in our economy today, that of employee theft. "Our research indicated that, over past six years, no incident of employee theft have been reported within ten of the companies that have been our clients. In analyzing the security practices of these ten companies, we have further learned that each of them requires its employees to wear photo identification badges while at work. In the future, we should recommend the uses of such identification badges to all of our clients." The issue of employee theft is a broad problem and has different labels to identify it, shrinkage for the retail industry and hidden profit loss in the technology sector are serval examples of common terms used for employee theft. The author of this memorandum presents several data points and suggests one recommendation to effect the issue of employee theft based on a sampling of the client population.