J2 Global Communications (NasdaqGS: JCOM ), better known as eFax, is under fire. Yesterday, Sam Antar tore into the company for an accounting gimmick that the company (and its auditors) had to know was wrong. The issue involves revenue and deferred revenue.

In the 10-Q for the first quarter of 2011, J2 reported an upgrade to its accounting system. The new system gave J2 the ability to properly calculate unearned revenue from annual contracts with customers:

I’ve written previously about Fortune Hi Tech Marketing (FHTM), a multi-level marketing company that is all about recruiting more people into your pyramid, rather than actually selling products.

Fortune Hi-Tech Marketing has previously been the target of legal action by the Attorney General of North Dakota, and has been a target of the North Carolina Attorney General, cracking down on “business opportunities”:

Today’s Compliance Week article, “SEC Pursues Small Company Over Lax Internal Controls,” [subscription required] discusses the SEC settlement with Koss Corp over the $34 million embezzlement by former Vice President of Finance Sujata (Sue) Sachdeva.

The article explains the settlement, which is essentially a clawback of some of Michael Koss’s compensation:

Guest Post by Brian Mahany

Here is a new twist. A hedge fund sues an accounting firm for its failure to uncover a Ponzi scheme operated by one of the hedge fund’s traders. That might sound farfetched, but its not. New York accounting firm Rothstein Kass was sued by two hedge fund managers in San Francisco Superior Court after the fund lost millions of dollars to one of its traders who was allegedly running a Ponzi scheme.

The plaintiffs in the case, two hedge fund managers from Nevada based Paron Capital, claim that Rothstein Kass was hired to verify the trading results from one of their traders. They claim the accountants were specifically hired to perform due diligence and insure the trader was not a fraudster. The accountants, however, say they did nothing wrong and were never asked to verify the trader’s alleged 20% rate of return.

What is a company to do when it wants to hide losses? Manipulation of the financial statements is the obvious first choice. It’s not hard. Sure companies have “internal controls,” which are supposed to include policies and procedures which ensure that financial information is properly recorded. But companies of all sizes have problems with their internal controls, such that it’s not terribly difficult to issue fraudulent financial statements.

Michael Woodford was dismissed in October as CEO of Olympus, and subsequently disclosed that he was fired because he raised questions about some acquisitions by the company. He alleges that Olympus paid incredibly high prices for companies it acquired, and also paid huge “advisory fees” to agents who supposedly represented Olympus in the transactions. The purpose behind these transactions? To cover up investment losses that were decades old without drawing any attention to the issue.

From my Thought Leadership series at Securities Docket:

When a whistleblower goes to a government agency with allegations of fraud and corruption, no one knows whether the government will act. The more detailed and credible the allegations, the more likely the government will ask questions.  The company may even have the great “fortune” of being subject to a full-blown government investigation.

Guest Post by David Quinones, Executive Director, International Association for Asset Recovery

While it was just a brief comment during a lengthy speech, United States Assistant Attorney General Lanny Breuer’s mention of impending guidance on the resurgent Foreign Corrupt Practices Act (FCPA) from the Justice Department

Amendments made to the 1977 Act in 1988 said that consultations between regulators, department heads and legislators should be held to devise guidance and ensure “the business community would be assisted by further clarification.” But the clarification never came. Starting in 2009, FCPA enforcement increased in size and scope, and businesses snared in controversy over what had been business-as-usual chirped that the goal posts had moved.

Guest Post by David Quinones, Executive Director, International Association for Asset Recovery

After 55 percent of the loans it wrote went to foreclosure, Allied Mortgage Capital is in the government’s crosshairs thanks in part to a whistleblower lawsuit brought on behalf of a former branch manager by IAAR Advisory Board member Brian Mahany, Joe Bird and their firm, Mahany & Ertl.

A massive fraud case developing in New York threatens to bring down the largest privately held mortgage company in the nation, and early indications are that asset recovery will play a large role in sifting through the wreckage.

Guest Post by Michael Volkov

In-House counsel and corporate compliance officers dodge bullets everyday as they stare down the barrels of aggressive prosecutors, regulators, civil litigants, whistleblowers, disgruntled employees and shareholders prodded by trial attorneys to file derivative suits at the drop of a hat. In the face of all of these risks, internal investigations have become commonplace and a standard defensive tactic for a company to regain some leverage, learn the scope of a potential problem and then develop a plan for resolving a particular issue.

All too often, companies follow the rote formula developed in the Sarbanes-Oxley era of the early 2000s. Those same formulas are being applied in the Foreign Corrupt Practices Act, and in more discrete global anti-corruption, money laundering, export compliance and antitrust enforcement matters.