Today’s Milwaukee Journal Sentinel provides additional insights into the alleged fraud committed by Koss Corp. VP of Finance Sue Sachdeva. Initially the fraud was estimated at $4.5 million, but that was quickly revised upward to more than $20 million.  It is alleged that Sachdeva spent millions in corporate funds on clothing, jewelry, and other items.

My comments in the article:

As if uncovering more than $1.8 billion in frauds hasn’t been enough, Barry Minkow (famous for his ZZZZ Best Carpet Cleaning fraud for which he did 8 years in prison) has just busted another fraudster who was running a Ponzi scheme.

Dow Jones Newswire reports:

One type of case I really enjoy working is suspected arson. On either a personal or business level, an insurance company may be looking for a motive when arson is supsected. A difficult financial situation is one obvious motive for arson.

Today’s article about a fire at the house of a women accused of defrauding Wisconsin’s child care system brought this to mind. Latasha Jackson has gotten rich off of providing daycare services in the city of Milwaukee. But not just any daycare services. The ones paid for by the Wisconsin Shares program, essentially a welfare program that pays the daycare costs for low income families.

This week Koss Corp (NASDAQ:KOSS) announced that Sujata “Sue” Sachdeva was fired from her position as Vice President of Finance for stealing at least $4.5 million from the company. Two members of the accounting staff Sachdeva supervised were suspended without pay.

And then the estimate of losses went up to $20 million. The theft occurred between 2006 and 2009, and the company has said that none of the financial statements for those years can be relied on.

Anyone who has spent some time on this site knows I’m no fan of the United First Financial Money Merge Account (UFF MMA).  This “revolutionary” software is supposed to help you pay off your mortgage in record time, all for the low, low price of $3,500. Unfortunately, it’s being marketed with lies, and the UFF proponents who comment here consistently repeat the lies.

The argument in favor of the UFirst MMA that seems most likely to get any traction is: “You just don’t understand the product!” I’ve been asked a zillion times whether I’ve actually used the product, and have been told I don’t really know how it works. Nothing could be further from the truth.

I don’t have to flush $3500 down the toilet to know that the UFF Money Merge Account is worthless. I know enough about numbers to analyze the program and see that it doesn’t offer consumers any savings. They’d be better off doing one simple thing: Pay the minimum on all debts each month, and use any extra cash they have left toward the debt with the highest interest rate.

UFF would have you believe that some complex “factorial math” is necessary and is what creates the savings for the consumer. But that’s a lie.  Sure, there may be hundreds of different ways to pay your 10 debts each month, but only ONE way matters. Paying the minimum on all debts and using all extra cash to pay down the debt with the highest interest rate. You don’t have to be smart to do this. It really couldn’t be any simpler.

MMA proponents have often challenged me to compare the do-it-yourself (DIY) method I promote (which is free!) and the UFF program (which is $3,500) to see which puts the consumer further ahead. None of them have actually participated in their own challenges, although I’m more than happy to do so.

But we don’t need my participation. On FatWallet.com, this challenge has been completed over and over, and the UFF MMA loses every time. Here is a set of links that will show you how the MMA loses. It is astonishing that promoters of United First Financial can still pretend that their product is worthwhile:

There once was an agent named James Hughbanks.

He challenged us to see the truth. He said that spreadsheets and other cheap stuff are nothing compared to what the MMA can do.

10 different scenarios to prove that MMA is better. Different loans, different interest rates, life-changing situations.

A simple spreadsheet we created. In all 10 scenarios, the MMA was behind.

In the end, he had to admit the truth. The MMA will always lose.

The UFF agent proposed 10 different scenarios. Under every single one of them, the consumer using the UFF MMA would lose… taking a longer time to pay off their debts.

UFF Results::
MONEY MERGE ACCOUNT START PAYOFF PERIOD 6.75 YEARS
SCENARIO PAYOFF
1. PAY RAISE OF $50 BIWEEKLY – PAYOFF – 6.667 YRS 8/2014
2. SAVE $150 MO IN BUDGET – PAYOFF – 6.25 YRS 3/2014
3. SPEND $900 FRO 8.5 MO – PAYOFF – 6.583 YRS 7/2014
4. DEPOSIT 3500 – PAYOFF – 6.417 YRS 5/2014
5. SPEND 20,350 FROM EQUITY – PAYOFF – 7.167 YRS 2/2015 TRUE COST IS $28,084
6. BUY CAR-12K PAY MO. PAYMENT PAYOFF – 7.583 YRS 7/2015
7. LOSE JOB OF BIWEEKLY ———- OUT OF MONEY IN 35 MONTHS FROM EQUITY LINE
8. SAVE $500/MO IN CHILD CARE PAYOFF – 20.667 YRS 8/2028
9 NEW BIWEEKLY JOB – PAYOFF – 10.583 YRS 7/2018
10 RUN HELOC AT 18% FROM DAY ONE PAYOFF – 11.167 YRS 2/2019

DIY Results:
Base: 5/2014 (6.5 years)
1. 2/2014 (6.25 years)
2. 10/2013 (5.917 years)
3. 2/2014 (6.25 years)
4. 12/2013 (6.08 years)
5. 8/2014 (6.75 years)
6. 1/2015 (7.167 years)
9. 4/2016 (8.417 years) (7, 8 and 9 are related scenarios.)
10. 5/2016. Note that my simulation did not get affected that much by the HELOC rate increase to 18% because I used HELOC for emergency purposes only. Total HELOC interest incurred (Cell T7, non-compounded) increased from 557.23 to 1487.94 but you are still able to pay off the loan at the same month.

Summary:
The DIY approach had a .25 year (3 months) advantage to begin with because of the $3500 software cost. From scenarios 1 to 6,the DIY approach remained between .20 to .40 year advantage (~2 to 4 months). This is to be expected since we’re supposedly running the same scenarios, therefore similar results. The variance of +/- 1 month between the scenarios would be due to the fact that the loan could be paid off in month x, but in certain instances there is some balance left causing the other scenario to finish the following month.

Our end result after scenario 9 are quite different, so we would have to look into that. As mentioned above, the DIY approach did not get affected by the HELOC rate change (Scenario 10).

JHB, I do not need to see your software as we have produced similar results (except maybe for 7, 8, 9 where you end much later). If you disagree on the result in any scenario, investigate the spreadsheet. I display ALL the data monthly. If you think I entered the wrong payment scenario (incorrect start or end month, incorrect amount), go ahead and change it and click on Calculate. It should give you the payoff date.

And now, I rest.

And it was all done with one simple spreadsheet. No factorial math. No complicated paydown scenarios. Just the simple “pay more toward the debt with the highest interest rate” plan.

Back in the day, a government-run delivery service was a good idea. It put some quality controls in place and made the service more reliable. People could actually count on their letters getting to their final destination.

But in this day and age, the U.S. Postal Service is no longer needed, and I suggest that we get rid of this drain on tax dollars.

I’ve been ranting publicly and privately for the last week about Facebook’s new “privacy” options that went into effect last week. I put privacy in quotes because the way things were set up, many Facebook users had information out in the public domain, and they didn’t even know it.

The biggest issue for me was that even if you hid your friends list, it was still available publicly. So hiding it really did nothing to stop people from seeing it. Sure, your friends couldn’t see your friends list on your profile, but anyone on Facebook could see it if they knew the right URL to use.

Facebook even acknowledged the lists were public, while trying to tell users that they could hide their friends list. Notice the clever language they used in a blog post which told you that you could hide your friends list, but then turned around and said “not really.” (Important text highlighted in bold by me):

UPDATE on Thursday, Dec. 10: In response to your feedback, we’ve improved the Friend List visibility option described below. Now when you uncheck the “Show my friends on my profile” option in the Friends box on your profile, your Friend List won’t appear on your profile regardless of whether people are viewing it while logged into Facebook or logged out. This information is still publicly available, however, and can be accessed by applications. Thanks again for your comments and suggestions.

Today the Electronic Privacy Information Center and nine other privacy groups filed a complaint with the FTC about Facebook. They want the FTC to investigate the privacy changes, and they’re saying that Facebook didn’t do enough to protect users’ privacy when they rolled out the changes last week. What was touted as an “improvement’ to privacy options really destroyed a lot of privacy for most Facebook users. The full complaint is posted at Mashable.

And yes, I personally think Facebook was deceptive about all this and tried to trick users into opening up their data to prying eyes. How better for Facebook to open up their platform to more advertising revenues than to get users to expose more data about themselves?

Yes, the whole purpose of social networking is to connect with others and share information. However, I think providers of these services owe it to users to be forthcoming about exactly what is private and what is not. Consumers should have the right to decide about their own privacy based on getting the whole story from the networks, not just public relations spin about “new and improved” privacy options which are really less private than ever before.

Press release issued by Fraud Discovery Institute.

FDI demonstrates that InterOil (NYSE:IOC) selectively excludes certain issued press releases from regulatory filing

Susuve Laumaea, Senior Manager for Media Relations at InterOil (NYSE:IOC) in Papua New Guinea has issued at least two press releases on behalf of InterOil Corporation dealing with material exploration operations in PNG, but neither of these official company press releases were filed with the Securities and Exchange Commission, nor do they appear on the company website. In addition, at least one other item appearing to be a press release regarding InterOil and authored by Laumaea has been published on a Papua New Guinea blogger’s website.

My most popular post on this blog is Mary Kay Cosmetics: Destroying half a million women a year, and with good reason. Each day, thousands of women are searching for information on the Mary Kay “opportunity.” Until a few years ago, the only information they could find was produced by the Mary Kay Spin Machine.

Almost five years ago, women started speaking out about Mary Kay on the internet. My site Pink Truth is the most visited “anti-Mary Kay” site around, and each day, we have thousands of visitors to the site.

Press release issued by Fraud Discovery Institute.

InterOil Corp’s investors duped into believing company has discovered and certified resources in Papua New Guinea

In the last three months, the stock price of InterOil (NYSE:IOC) has gone from $30.40 to $70.55 per share. What is responsible for this incredible 132% increase in price? Certainly not the company’s financial performance. As of the end of the third quarter of 2009, revenue is down 31% from the prior year. EBITDA is down 15% and net income is down 11%.