In a past appearance on CNBC’s On the Money, Tracy Coenen talked about how consumers could protect themselves from business opportunity scams and multi-level marketing (MLM) schemes. MLMs parade themselves around as business opportunities, but they are nothing more than elaborate pyramid schemes that swindle millions of consumers each year.
Despite all the warnings about tax scams, consumers are still falling victim to these types of fraud. Tracy Coenen talks on CNBC about the top five tax scams that consumers should be aware of. Read More
And there is another lawsuit against LuLaRoe. The MLM that sells leggings of questionable taste appears on the verge of collapse. A lawsuit filed in 2018 by Providence, a company that supplied LLR with goods first demanded $49 million. More recently, Providence says it is owed $63 million and it wants the court to seize $34 million in assets since owners Mark and DeAnne Stidham are a flight risk. And then the state of Washington sued LLR, alleging it is a pyramid scheme:
“LuLaRoe tricked consumers into buying into its pyramid scheme with deceptive claims of high profits and refunds for unsold merchandise,” Ferguson said in a news release. “Instead, many Washingtonians lost money and were left with piles of unsold merchandise and broken promises from LuLaRoe. It’s time to hold LuLaRoe accountable for its deception.”
The newest lawsuit was filed this month by plaintiffs Tabitha Sperring, Paislie Marchant, and Sally Poston. The lawsuit sums up the scam (coincidentally or not in language that sounds an awful lot like things I’ve written here): Read More
There is no shortage of allegations of investment fraud since the stock market tanked in 2008. Are there more investment scams occurring, or have market conditions just led to the discovery of more of these schemes? I’ll guess the latter, although no one really knows for sure.
The beauty of fraud is that so much of it goes undetected. Those involved in financial fraud actively conceal their schemes and their involvement, so it’s impossible for fraud investigators to know exactly how much fraud is happening. For example, perpetrators go so far as to pay others to participate in the scheme and cover up phony financials and non-existent promissory notes. This kind of concealment leads to more investors putting money in a scheme, and ultimately creates ever larger financial losses.
In the end, however, it doesn’t necessarily matter if we can put our finger on exactly how many of these investment schemes are out there. What really matters is being able to identify the hallmarks of such schemes so that investors can avoid them like the plague. Read More
Can you believe people actually admit to this stuff? A survey of accounting controllers done by FloQast found that lots of controllers think fraud is a routine part of their jobs.
There are some awfully interesting results. 69% of the participants said their job is that of a risk manager who oversees internal controls. (For those who don’t know, internal controls are the policies and procedures that ensure the numbers are recorded accurately and that prevent fraud.)
64% say they’ve experienced pressure to cook the books. That’s not necessarily surprising. Results are everything in many companies, and I can easily envision executives asking how the numbers can be prettied up. Read More
Divorces between older couples who have been married a long time are sometimes referred to as “grey divorces.” Sources say that while divorce rates overall have been dropping in the United States over the last 20 years, among those age 50 and above, it has been growing.
The financial part of a divorce is often difficult, but for senior citizens, it can be even more painful. Some of the reasons it can be harder for the older crowd:
- One spouse may have little to no financial management experience. How will he or she manage household finances going forward?
- Dividing retirement assets can be tricky. There may have been plenty of money available to retire and support one household, but two households may not be sustainable.
- One or both spouses may be past the age at which they can expect to find reasonable employment.
- Poor money choices during a long marriage may mean that there is not much to split, which can be a huge problem, especially if one spouse has no ability to obtain employment.
- The spouse in charge of the money may have hidden assets, and it could be difficult for the other spouse to uncover them.
- If one spouse has been the primary breadwinner throughout the marriage, he or she might view the retirement assets as belonging to him or her, creating a bigger fight.
With life expectancies increasing, retirement money has to last longer. That will necessarily be harder with two households to support.
Below is a clip of a portion of a video I did on accounting services in divorce and family law cases. I discuss the work that a CPA can do in divorce cases.
What documents must be obtained in a divorce proceeding when your forensic accountant needs to evaluate and investigate the income of the parties? In the below video, Tracy Coenen lists some of the basic documents that are needed to analyze wages, self-employment income, and investment income.