The Securities & Exchange Commission is set to issue guidelines on fines for corporate wrongdoer. SEC Chairman Christopher Cox is pushing for standards in levying fines, and would like those guidelines available to the public. The standards won’t speak to the size of fines, but will dictate when a fine is appropriate.

Some more recent penalties include:
WorldCom (MCI) – $750 million for fraudulent financial statements
Time Warner – $300 million for inflating advertising revenue at AOL
Qwest Communications – $250 million for accounting fraud

Full story here.

Brian Hines and his sister, Charmaine Hines, have been charged with stealing Red Cross debit cards that were meant to go to Hurricane Katrina evacuees. A Red Cross employee researching missing debit cards came across one debit card loaded with $4,695, which corresponded to a card number on a piece of paper in the possession of Mr. Hines. At least 100 cards were missing, and it was determined that approximately half were activated with an unusual value of $4,695 each.

Mr. Hines eventually admitted that he used stolen Red Cross debit cards to get cash out of ATMs. He also admitted giving 20 to 25 debit cards to his sister. Mr. Hines stated that he bought jewelry, vehicles, clothes, and shoes with the money. The investigation is ongoing, but the Red Cross estimates the loss at about $230,000.

Read the DOJ press release here.

Say it isn’t so! The maker of my all-time favorite ice cream suffers a fraud at the hands of its CFO?

The ex-CFO of Ben & Jerry’s Homemade Inc., Stuart “Mickey” Wiles pleaded guilty to wire fraud for embezzling $300,000 from the company. He had company checks issued for things such as charitable contributions and professional fees, but actually used the money for personal expenses such as entertainment, vacations, and an addition to his home.

Wiles also used his company credit card for personal expenses. He resigned in May 2004.

In 2002, Xerox set a record, receiving the largest SEC fine up to that point – $10 million. The new record is now held by WorldCom, which received a fine of $750 million. Other companies that have received 6-digit fines include Royal Dutch/Shell Group, Qwest Communications International, AOL-Time Warner, and Computer Associates International.

Thanks CFO Magazine for this bit of trivia!

Lee Jones, the former dean of graduate studies at the University of Wisconsin – Whitewater “improperly used” over $50,000 on a group he founded called Brothers of the Academy. The spending was discovered during an audit. The audit report says that Mr. Jones broke university policies on credit card expenditures, but that the spending wasn’t found sooner because the university failed to follow oversight procedures.

Most of the $50,000 was spent on travel expenses to bring 30 participants to the national conference of Brothers of the Academy in May. School officials say that Mr. Jones was authorized to spend $4,000 of school funds for the event, but the audit shows that he spent $54,000 in tuition and student fees.

His attorney, David Lasker says that the errors were minor and mostly the fault of the university for not properly training Mr. Jones and for being racist.

Mr. Jones filed suit in November to prevent the release of the audit report, because it would harm the public’s interest in diversity.

The Associated Press reported that Mr. Jones was accused of similar misappropriations of funds while he was the associate dean at Florida State University in 2003.

Full story from the Journal Sentinel here.

I always get quizzical looks when I say I’m a forensic accountant. I explain it briefly by saying that I do financial investigations. This week’s column “The Fraud Files” in the Wisconsin Law Journal was devoted to a discussion of the difference between regular accountants and forensic accountants.

Read my column here.