31 Aug

Corporate moles

A growing problem for companies is the presence of corporate moles – – employees who are stealing information and giving or selling it to outsiders (especially competitors).

Anti-fraud software maker Actimize conducted a survey on this issue, and included 40 large financial services firms in the U.S. and United Kingdom. About 50% of the companies surveyed said they believe they have had a corporate mole recruited and trained by outsiders to commit fraud. 85% of respondents said their company has been affected by employee fraud in general, and 65% think it is going to be a bigger problem in the future.

The 50% of companies that reported a data theft within the last 12 months have had losses averaging $875,000 per incident. The largest incident created $6 million in losses.

30 Aug

Home Depot fires employee for apprehending thief

Yes, you read that correctly. Home Depot fired (former) employee Dustin Chester, who worked at a store in Murfreesboro, TN, after he apprehended a thief.

Last week, Dustin saw a man with a crowbar by a soda machine in front of the Home Depot store. He says the thief started running, and Dustin took off after him. He caught him and restrained him until the police came.

Unfortunately, Dustin was a department manager, and Home Depot’s policy prohibits managers and most employees from going after thieves. He was informed afterward by the district manager that he was supposed to let thieves go. Only loss prevention employees are allowed to go after thieves for safety reasons, says the company.

Since Dustin didn’t follow the company’s policy, he was fired. He says that he was just looking out for the other employees. He was worried about what the man might do with the crowbar and he didn’t want the customers or other employees to be in danger.

30 Aug

IRS and work product

Yesterday, a judge ruled that the IRS was not entitled to see workpapers that were deemed work product. This is a very important ruling in tax matters.

“Work product” is used in legal cases to protect papers that you don’t want the other side to see. Essentially, the attorney in a case doesn’t have to show the other side his notes and his work. Why? Because doing so would give the other side an unfair advantage if they get to see his research and though process. Read More

29 Aug


Those who have been involved in high-profile fraud investigations and general scam-busting are used to getting threats. The wackos typically like to threaten jobs, reputations, and families, and the levels to which they will stoop seem to have no lower limits. No lie or distortion is beneath those who want to silence the critics.

Last night, the threats went to another level. Barry Minkow’s life was threatened on Yahoo by someone who posted a pretend article from USA Today with a headline “Barry Minkow, Dead at the Age of 41.” The threat was complete with social security numbers, a drivers license number, the names of his wife and children, and a date and location in the future. The threat went on to note Barry’s investigation of Usana Health Sciences, the catalyst for this threat. Read More

29 Aug

Tax deductions by Usana distributors

This is from TerminatedRamp on the Yahoo message board for Usana. He raises an excellent issue. The IRS already has a generally dim view on multi-level marketing because the odds of turning a profit are less than 1:100 (1%). In order for business deductions on a tax return to be legitimate, the “business” activity must be done with the intent of making a profit and with a likelihood of profit. Doesn’t sound like a Usana distributorship meets these guidelines if you listen to Usana CFO Gil Fuller. Read More

29 Aug

News on Amway class action suit from Pyramid Scheme Alert

Robert FitzPatrick at Pyramid Scheme Alert reported in his recent newsletter on the class action suit that has been brought against Amway (Quixtar) by high-ranking distributors:

The lawsuit states:

* Quixtar’s (Amway and Quixtar are both part of the same company) products are so overpriced they cannot be profitably retailed.
* Only 3.4% of product sales are made to customers outside of the Quixtar distribution network.
* The sole way to make money is for a (distributor) to continually recruit new distributors who are also willing to buy and self-consume, or give away, the Quixtar products.
* Quixtar a classic recruitment pyramid scheme. Read More

28 Aug

Fraud Awareness Training is Key!

Studies have shown that fraud awareness training is one of the keys to preventing and detecting fraud at corporations. If employees know what fraud looks like, they can help avoid it and they can report suspicious behavior. And corporate executives agree that fraud awareness training is key (see below graphic; click on it to view full size).

Most current ethics and compliance training programs have failed. FraudAware specializes in fraud awareness training, and comes highly recommended.



28 Aug

Usana insider says Tim Ramey is a distributor

Can an analyst covering Usana Health Sciences really provide an independent analysis of the company if he is a distributor? Tim Ramey covers Usana for DA Davidson. Isn’t it kind of weird to cover the company and to be a distributor? And at the very least, wouldn’t this be an important disclosure to make before recommending a “buy” on Usana stock?

From the insider on the Yahoo message board: Read More

28 Aug

Integrity at Usana? Yeah, right.

Okay, this commentary is just silly. Integrity at Usana Health Sciences is non-existent. At the very least, the executives and board members lie about their credentials. Then we have the information that is never provided to distributors/recruits and investing community. At the worst, this rises to the level of fraud in a public company.

Here are an analyst’s comments: Read More