A government-wide analysis of the threat of money laundering in the United States has been released. Sixteen government agencies participated in assembling the data, including the Departments of Treasury, Justice, Homeland Security, the Board of Governors of the Federal Reserve System, and the United States Postal Service.

Government is focusing on money laundering because of the concern that illicit money flowing into the U.S. may facilitate terrorism and other criminal activities. The MLTA outlines traditional methods of money laundering including money transmitters, casinos, and trade-based money laundering. It also highlights emerging industries that are ripe for money laundering, such as online payment systems and stored value cards. The MLTA also includes information on each method as it relates to regulations, known patterns of abuse, and geographic concentrations.

Read the press release.

William Joachim of West Phoenix had been arrested on suspicion of using Brett Favre’s credit card over 40 times. He was arrest on four felony charges related to identity theft. Two other men were also arrested in the case, and have been booked on forgery charges.

The 40 unauthorized charges happened in Maricopa County, and totaled more than $10,000. It is believed that Favre’s card was part of larger compromise of personal information, which has lead to the theft of dozens of identities. The investigation began after the National Football League notified the Attorney General’s office that Favre’s credit card had been used in Maricopa County without authorization.

In the wake of Hurricane Katrina, law enforcement has focused on insurance fraud and charitable fund fraud. However, improper financial reporting by victim companies has been overlooked. Tracy L. Coenen, CPA, MBA, CFE of Sequence Inc. is warning CFOs and auditors of the financial statement fraud risks surrounding companies in the path of Hurricane Katrina.

The motivation is in place for the manipulation of financial statements as companies close out their year-end books. Companies have lost sales, assets, and customers because of Hurricane Katrina, but the greater risk they face is the wrath of investors and lenders if positive financial statements are not released.

Coenen identified the financial statement areas at greatest risk of intentional misstatement, and offers tips for auditors to help detect such schemes. CFOs, investment analysts, and investors want to become familiar with the vulnerable areas of financial statements as well.

With hundreds of corporate fraud investigations under her belt, Coenen is intimately familiar with the methods utilized by financial executives to enhance their financial statements. .While we all wish to be sensitive to the devastation experienced by companies in the path of Hurricane Katrina, auditors cannot let their sympathy supersede an appropriate level of skepticism when evaluating financial statements,. says Coenen.

In the current issue of Fraud Magazine, Coenen discusses her concerns about financial statement fraud related to the hurricane, and provides guidance to financial professionals who may be evaluating balance sheets and income statements.

Full press release

Article from Fraud Magazine

After 10 long years, a small company in New Hampshire has been cleared to continue using the name Charbucks for its coffee. The New York federal court ruled that the market would not be confused between Starbucks and Charbucks, and that Starbucks hadn’t proven that the other name tarnished its brand.

Hmmmm…wonder how their coffee stacks up?

Yesterday it was reported that a man in New Mexico caught a mouse in his house, threw it on a pile of burning leaves, and the flaming mouse ran back into the house. The house completely burned down.

Today it has been reported by WSB-TV in Atlanta that it didn’t really happen that way. The homeowner is quoted as saying that the mouse was actually dead when he threw it on the pile of burning leaves. The house caught fire due to high winds, it seems.

Thomas Coughlin, the former Vice Chairman of Wal-Mart Stores Inc. will plead guilty to federal charges of wire fraud and tax evasion. He was accused of stealing $500,000 through the improper use of gift cards and expense reimbursements. Mr. Coughlin’s compensation was millions of dollars, but was nonetheless caught having the company pay for personal items.

The guilty plea will include five counts of wire fraud and one count of tax evasion. In exchange for the guilty plea, federal prosecutors will not pursue additional charges of money laundering.

Mr. Couglin worked for Wal-Mart for 27 years, and was given a retirement package worth more than $10 million. This agreement has been rescinded and is not the subject of litigation.

Leslie John Hamilton was sentenced to 30 years in prison for masterminding a pyramid scheme that he claimed was an investment in rare coins. The scheme involved over 300 victims, who lost more than $10 million.

Hamilton was convicted by a federal jury on 28 counts of mail fraud and wire fraud, after representing himself as a master coin grader. He claimed that he bought coins below market value, and then resold them for a profit. Investors were promised returns of 8% to 150%. In reality, investors were paid “returns” on their money via collections from new investors, typical of a traditional Ponzi scheme.

The fraudster continues to claim that he is not guilty, and is the target of a government conspiracy.

Read the full story here.

The U.S. Department of Housing and Urban Development (HUD) announced today that over 28,000 home mortgages were approved and federally insured with forged underwriting approvals by lender ABN AMRO Mortgage Group of Ann Arbor, Michgan.

From 2000 to 2003, ABN AMRO pushed through thousands of loans without getting Federal Housing Administration review, as required. Employees signed the names of the company’s underwriters to the loan documents without the underwriters’ consent.

ABN AMRO completed an internal investigation. The company has agreed to a settlement of $41 million, which covers program losses from 229 foreclosures and 783 loans currently in default. The company has also agreed to remediation of the internal problems, which includes discipline and firing of executives and employees.

Last week the Wisconsin Law Journal published an article I wrote about the fraud at Milwaukee-area home builder Bielinski Brothers Inc. The company’s CEO, Robert Brownell, was the mastermind of a fraud that cost the company an estimated $12 million. There were several players charged with federal crimes, along with Brownell, and most have pleaded guilty.

While I did not investigate the case and I did not have any firsthand involvement with anyone from the company, I commented on some of the things that went wrong and what companies can learn from that. There are common mistakes made in businesses, and I highlighted some of them in the article.

Read it here: A Thief Among Us: Lessons From Bielinski Brothers

The Milwaukee office of PriceWaterhouseCoopers has settled a lawsuit over its audits of two collapsed Heartland Advisors Inc. mutual funds for $8.25 million. A judge will still have to approve the settlement, and that is not expected to happen before April.

The matter came to light in 2000 when Heartland Advisors marked down the value of the funds, the Heartland High-Yield Municipal Bond Fund and the Short Duration High-Yield Municipal Fund. The SEC has estimated that shareholders lost about $80 million.

Attorneys fees and costs will be deducted from the settlement prior to the distribution of funds to the 10,000+ former fund shareholders. The shareholders previously got settlements from Heartland Advisors ($14 million), a bond pricing company ($1 million), and liquidation of the funds’ assets ($30 million).

Officials of Heartland Advisors still face trial on a civil complaint filed by the SEC.