I am participating in a tribute to the victims of 9/11. On September 11, 2006, bloggers will be posting tributes to the 2,996 victims who lost their lives in the tragedy.

The tribute is described by the organizer:

2,996 is a tribute to the victims of 9/11.On September 11, 2006, 2,996 volunteer bloggers will join together for a tribute to the victims of 9/11. Each person will pay tribute to a single victim.

We will honor them by remembering their lives, and not by remembering their murderers.

If you would like to help out, either by pledging to post a tribute on your own blog, or by offering your services to promote this cause, just leave a comment here and I.ll email you the name of a victim.

Then, on 9/11/2006, you will post a tribute to that victim on your blog.

But, and this is critical, the tributes should celebrate the lives of these people.kind of like a wake. Over the last 5 years we.ve heard the names of the killers, and all about the victim.s deaths. This is a chance to learn about and celebrate those who died. Forget the murderers, they don.t deserve to be remembered. But some people who died that day deserve to be remembered.2,996 people.

Thank you,

D.Challener Roe

My tribute will be to John Patrick Tierney, age 27 when he died. When I saw his picture, the first thing I could think of was his parents. I am honored to be able to pay tribute to their son for them.

You can sign up to participate here.

As I’ve mentioned several times before, Conspiracy of Fools by Kurt Eichenwald has been a fascinating read. He dug so far into the details of the demise of the company and its executives.

The company was in a downward spiral, and a merger with another energy company, Dynegy, was seen as the only way for the company to survive. Dynegy injected some cash into the company, but immediately thereafter, Dynegy executives started finding out about Enron’s true financial picture. Undisclosed debt and secret related party transactions put the merger in jeopardy.

Finally, Dynegy called off the entire deal. It was clear that Enron’s only option was bankruptcy. Ray Bowen, treasurer of Enron, raced to a telephone.

He had to move fast. Some $400 million was sitting in accounts at Citibank, which would now be owed far more than that in the bankruptcy. The bank might seize the money as its own. Bowen needed to move it. Enron owed basically nothing to Goldman Sachs. That’s where it would go. He dialed the number for Mary Perkins, the assistant treasurer.

“Pull every penny we’ve got out of Citibank and wire it over to Goldman Sachs,” he said. “Do it now.”

McMahon immediately called the ratings agencies to let them know. Standard & Poor’s was the first to downgrade the company. Its debt was now rated at junk levels. Trading in Enron shares was suspended. When it resumed, the price plummeted 75 percent, to just above one dollar.

Computer-support technicians at Enron watched as the commands went through. Millions and millions of dollars were moving out of Enron’s bank accounts. They had no doubt what was going on. Someone was stealing all of Enron’s cash.

One executive made a decision. He had to stop it. He telephoned the first reporter he could think of.

Back in May, I published an article in the [tag]Wisconsin Law Journal[/tag] about [tag]red flags[/tag] of [tag]fraud[/tag] related to employees. The article is a must-read for business owners and executives. The are often surprised to find that the common characteristics exhibited by on-the-job thieves can be found in some of THEIR employees!!!

The article covers the work habits, attitudes, and lifestyles of employees. A few of the specific red flags include:

• Unusal dedication to job
• Rationalization of poor work performance
• Instability in relationships and household
• Personal financial problems
• Substance abuse problems

For the rest of the common characteristics and an explanation of why they can be indicators of fraud, you’ll have to read the article.

While Enron and Dynegy executives were trying to work out the details of their pending merger, William McLucas, one of Enron’s outside lawyers began questioning Jeff Skilling about the Southampton partnership and LJM. These were two of the several entities that put large amounts of money into the pockets of Enron executives.

Skilling claimed he knew nothing about the fact that Andy Fastow, Enron’s former CFO, received $35 million from LJM in the prior two years. Fastow had told the Enron board of directors that Skilling had approved each deal done by LJM. Skilling denied it.The attorney brought out an approval sheet for an LJM deal named Margaux. The sheet had Skilling’s signature on it.

“You signed this one,” McLucas said. “There is a list of questions with answers, and you signed it.”

“Now, wait a minute,” Skilling shot back. “My signature doesn’t mean I’ve reviewed these questions independently and satisfied myself the answers are right.”

McLucas crossed his arms. “What does it mean, then?”

Skilling pointed at the signature page. “Right here, I saw Causey and Buy already signed,” he said. “The fact that they signed it was good enough for me to sign without reviewing the same facts again.”

So was Skilling just trying to get out of responsibility for that deal, or did he really not examine the terms of the deal before he approved it?

Recently, New Jersey.s Committee on Attorney Advertising ruled that advertising done by lawyers in “New Jersey Super Lawyers” violates attorney professional conduct rules. New Jersey is the first state to make such a rule about “Super Lawyers”.

The Super Lawyers publication is done in 21 states, and is clearly labeled as an advertising supplement by the publishers. Approximately 5% of a state’s attorneys are selected for inclusion in the publication.

The basis for New Jersey’s ruling is that the designation of “Super Lawyer” could give a buyer of legal services a false impression. Such a designation is considered to be “comparative” which is prohibited in lawyer advertising. That is, the publication could wrongly lead a consumer to believe that an attorney in this publication is better than one who is not.

The committee handing down the ruling believed that the publishers don’t provide enough information on the methodology used to award the Super Lawyer designation. The committee believes that the rankings are arbitrary. The publisher, however says that there is extensive research that goes into the awarding of the title.

The state cannot prevent the publication from being published and distributed in New Jersey, however, lawyers who advertise in the publication could be subject to sanctions. The company that puts out the publication is appealing the ruling.

The [tag]American Institute of Certified Public Accountants[/tag] ([tag]AICPA[/tag]) has been losing ground ever since the accounting scandals that started in 2001. Now, they may be headed for even more problems.

The organization decided this year to move many of its functions from New Jersey, New York, Texas, and Washington D.C. to Durham, North Carolina. About 400 jobs are being affected, and only about 50 employees have decided to make the move.

The AICPA has lost influence since the accounting scandals partly because it lost duties to [tag]PCAOB[/tag], the [tag]Public Company Accounting Oversight Board[/tag]. The PCAOB now sets the standards used to audit public companies instead of the AICPA. Currently, the AICPA has about 330,000 members, and is still the largest professional membership group for accountants. The organization says that the consolidation and move will save $10 million per year.

On September 21, I will be presenting the keynote address for the Louisiana Society of CPAs at the Louisiana Business and Industry Conference. My presentation is based upon the article I wrote for Fraud Magazine (reprinted in Lagniappe – The Magazine for Louisiana CPAs), Financial Statement Fraud in the Katrina Aftermath:A Whirlwind of Opportunities. I will be talking to CFOs and accounting managers about the financial statement risks that they face following the hurricane, and strategies for avoiding the temptation to improperly report financial events.

I’m looking forward to seeing New Orleans for my first time. I have heard that it’s impossible to comprehend the magnitude of the damage unless you see it firsthand.

Chewco, one of the special purpose entities (SPE) that Enron used to enhance its financial statements, was under examination by the Arthur Andersen accountants. Specifically, they came across a letter that indicated that six million dollars from JEDI (another SPE) would fund a reserve account.

This was the proof of a secret side agreement used to get the Chewco deal closed. The six million dollars had been placed in a reserve account to secure a portion of the money provided by Barclays Bank. Enron could argue all it wanted that Barclays’s cash was really equity and not a loan. It didn’t matter anymore. Chewco had been constructed with exactly three percent independent equity. With six million dollars secured, Barclays did not have that cash at risk. Even assuming Barclays’s money was equity, Chewco was short the three percent by at least six million dollars.

There could no longer be any question. The accounting failed. Chewco was not a valid special-purpose entity. It was Enron.

And that it how it came to pass that Enron was going to have to recognize losses from these entities on its own financial statements. The entities were really not independent, so their financial results were Enron’s financial results. The vehicles that Enron executives used to move losses off Enron’s financial statements failed.

Wisconsin recently enacted a law which prohibits companies from implanting tiny computer chips under employees’ skin, also known as [tag]RFID[/tag] (Radio Frequency Identification) michrochip implant.

The small chips are used to track the movements of people, and may have been used by some employers to track employee activities. RFID tags are normally attached to products or animals, and radio waves are used to identify the chips. For example, chips like this can be used on products instead of the bar codes that are traditionally used at store checkouts.

Under the new law, any employer who requires a person to receive a [tag]microchip implant[/tag] will be fined $10,000 per day until the microchip is removed. While the chips could be useful to help positively identify employees and give them access to secure areas of companies, the risk exists that someone could cut the chips out of people and use them nefariously.

In order to prevent the kinds of [tag]fraud[/tag] and abuse that went on after Hurricane Katrina, the Federal Emergency Management Agency ([tag]FEMA[/tag]) is changing the way it distributes emergency aid.

The changes include the following:

• Displaced families will receive $500 in emergency aid after a major disaster, down from $2,000 per household
• FEMA will start registering evacuees before the storms hit, which will help with distributing money and finding temporary housing for people whose homes are damaged
• Evacuees will not be moved from shelters to apartments or temporary housing until their identities are verified
• State and local governments will be asked to sign contracts with local clean-up companies prior to a disaster

These changes are being made after discovering that over $1 billion in aid to hurricane victims was misspent. Some of the fraudulent spending included $3,700 for jewelry, $2,000 for New Orleans Saints season tickets, $600 for strippers and $300 for “Girls Gone Wild” videos.