Merge Appoints Interim CEO

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Bill Mortimore, the founder and former chief executive of [tag]Merge Technologies[/tag] Inc., has been named interim chief executive officer. This follows the resignation of CEO Richard Linden, who resigned after problems with the company’s financial statements were found and the company’s stock value dropped significantly.

Merge is seeking a permanent [tag]replacement CEO[/tag], and also is conducting a search to replace the current chief financial officer Scott Veech.

The company is currently conducting an [tag]investigation[/tag] into its accounting and financial matters. Merge found errors in its second and third quarter [tag]financial statements[/tag] from 2005. The company is also in violation of National Association of Securities Dealers ([tag]NASD[/tag]) rules because it has not yet filed its 2005 [tag]annual report[/tag].

The Defense Gives Closing Arguments In Enron Trial

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Daniel Petrocelli, the lead defense attorney for former Enron president Jeffrey Skilling, tried to convince the jury on Tuesday to acquit Skilling and Kenneth Lay of all charges stemming from the company’s failure and alleged accounting fraud. He claims that the prosecution relied on coerced witnesses and misinterpretations of events and documents. Petrocelli argued that the government did not prove its case beyond a reasonable doubt, and did not show criminal intent or a lack of good faith. Continue reading

The AICPA lost my personally identifying information

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Lucky me! My social security number, along with my name and address, have been compromised by the [tag]American Institute of Certified Public Accountants[/tag] ([tag]AICPA[/tag]).

They say that a computer of theirs failed, and someone sent out the hard drive for repair “in direct violation of the Institute’s [tag]internal control[/tag] policies and procedures.” The hard drive has been lost. The social security numbers of all members were on the hard drive.

They don’t know if anyone has accessed the information on the hard drive. (Notice that they don’t mention whether or not the information was encrypted to help in situations such as these.)

The AICPA is offering a free year of [tag]credit monitoring[/tag] to make up for the [tag]data compromise[/tag]. Yay. Trust me – I’d rather have my personal information safe. Oh. They’ve now decided to delete everyone’s social security number from their database and will not be collecting social security numbers anymore. That doesn’t really help the tens of thousands of us who have our data floating around already, does it?

Oh, and this happens within a week of my [tag]malpractice insurance[/tag] carrier letting a database compromise occur, and now information about my insurance policy with them is floating around out there.

Read my article about recovering from [tag]identity theft[/tag].

The Cost of Mortgage Fraud

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The mortgage industry lost over $1 billion dollars to mortgage fraud last year, with the dollar losses doubling between 2004 and 2005. Contributing to the fraud problem are deceptive sellers, overtaxed buyers, builders who need to unload inventory, dishonest loan officers, and real estate brokers seeking commissions. Continue reading

Closing Arguments in the Enron Trial

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Kathryn Ruemmler, one of the federal prosecutors active in the trial of former Enron executives Kenneth Lay and Jeffrey Skilling, told the jury in closing arguments that the defendants lied “over and over and over again” to investors and employees. She said that they used accounting fraud, misleading statements and outright lies to help keep Enron’s stock price up.

Lay and Skilling counter that no fraud occurred at Enron other than executives skimming millions through secret side deals. Continue reading

Insurance Agent Buys Policies to Win Performance Bonuses

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Nancy Paquette, an insurance agent with American Family Insurance, committed fraud in order to become one of the company’s top agents. She opened policies without the consent of people to boost her sales figures.

A coworker suspected something was wrong because Paquette would have many last-minute policies written during sales campaigns. She would insist that she handle all paperwork for these last-minute sales, and the supposed customers would never contact the agent’s office about their policies. Continue reading

I’ve been invited to present for the Association of Certified Fraud Examiners

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The [tag]Association of Certified Fraud Examiners[/tag] puts on the largest anti-fraud conference in the world each July. This year the meeting is in Las Vegas, and I expect 2,000 attendees.

I’ve been ask to present on marketing a [tag]fraud[/tag] examination practice. This will be great fun for me, as I definitely enjoy marketing my [tag]forensic accounting[/tag] business. But shhhhhhh…. we don’t want to give away too many secrets!

Website for the conference: [tag]Fraud Conference[/tag]

More problems with stock options

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UnitedHealth Group Inc. may have to [tag]restate[/tag] some financial data as a result of [tag]improper accounting[/tag] related to the grant of [tag]stock options[/tag]. All told, the changes and loss of some tax benefits may mean a reduction of $286 million in profits from the last 3 years. The year hit hardest by the changes will be 2005, when the company said net earnings would drop by $150 million.

The SEC has been conducting an informal inquiry into the company’s accounting practices regarding stock options. The inquiries are looking into whether companies have been backdating or timing stock option grants to take advantage of favorable market prices. Executive stock options usually have a “strike price”, equal to the market value on the date of the grant. If the stock rises above the strike price, the executive cashes in the options at a profit.

The stock options at UnitedHealth were issued immediately after steep declines in stock price, but just prior to significant run-ups in share prices. This means that executives received options with extremely low exercise prices, and therefore more profit once they’re cashed in.

Survivors’ Staircase in danger

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The “Survivors’ Staircase”, the only remaining above-ground portion of the Twin Towers, might be demolished to make way for a new office tower. This Vesey Street staircase was the path to survival for many fleeing the World Trade Center on September 11, 2001.

“…. Because it offered a path to safety that allowed many people to escape the blazing [tag]World Trade Center[/tag] on Sept. 11, 2001, this haunting remnant is often called the Survivors’ Staircase. Although it is the only remaining above-ground fragment of the vanished Twin Towers, the staircase is threatened with demolition for construction of a new office tower on the WTC site. “

The National Trust for Historic Preservation calls the staircase one of America’s 11 Most Endangered Historic Places.

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Sentencing in Case of Rhode Island Club Fire

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Daniel Biechele, the former band manager whose pyrotechnics caused the February 2003 Rhode Island nightclub fire that left 100 dead, was sentenced to four years in prison. The families of victims were hoping for more prison time, since the maximum possible sentence was ten years.

The fire at The Station nightclub in West Warwick occurred during a Great White concert. Biechele lit the pyrotechnics display, which ignited a highly flammable soundproofing foam that lined the nightclub’s walls and ceiling. Continue reading